New York Gov. Kathy Hochul (D) is accused of being under a “dark cloud of pay-to-play” after reports revealed the company her administration awarded a $637 million contract to purchase coronavirus tests was founded by one of Hochul’s prominent campaign donors.
In December, Gov. Hochul’s administration awarded Digital Gadgets a $637 million contract for the purchase of 52 million at-home, rapid coronavirus tests.
However, Digital Gadgets founder Charlie Tebele and his family are major financial backers of Hochul’s campaign, so much so that Tebele held multiple fundraisers for Hochul.
One November 22 fundraiser came less than one month before Hochul authorized the deal with Digital Gadgets. Additionally, Hochul’s deal was made under emergency pretexts that may have made it easier for the agreement to be approved.
As the Times Union reported:
The deal was enabled by Hochul’s revived suspension of competitive bidding rules for the administration’s purchase of COVID-19 supplies — a policy change that had also been been put in place for a time by former Gov. Andrew M. Cuomo. Through an emergency executive order, Hochul suspended those rules on Nov. 26, four days after the Tebele fundraiser.
Interestingly, Tebele’s son James started an internship on Hochul’s campaign in November 2021, around the time of the Digital Gadgets contract, before ultimately landing a paid job as a campaign “finance associate” in May 2022.
Tebele and his family have donated roughly $300,000 to Hochul’s campaign, with $70,000 being donated before the Digital Gadgets contract was made. Further, Tebele hosted another fundraiser for Hochul in April, roughly two weeks after New York made the final payment on the $637 million contract.
New York also reportedly paid 45 percent more than California for the same rapid coronavirus tests by going through the third-party distributor Digital Gadgets.
As the Times Union explained:
In selling the antigen tests to New York, Tebele’s company charged a far higher price per test than other vendors the state used last winter. California bought the same test Tebele was selling for a price of 45 percent less per unit.
Unlike California, which bought the AccessBio “Carestart” test directly from the manufacturer, the Hochul administration bought them through Digital Gadgets, a third-party distributor that took an unspecified cut.
New York taxpayers could have saved close to $286 million if the state paid the same prices as California for the rapid tests.
John Kaehny, executive director of Reinvent Albany, told the New York Post there is a “dark cloud of pay-to-play” surrounding Hochul’s deal with Digital Gadgets.
“The more we know the worse it looks. This is a big deal,” Kaehny said. “There is a lot of money and it looks really, really bad and there is a dark cloud of pay-to-play hanging over this – and it’s not going to go away.”
Rep. Lee Zeldin (R-NY), Hochul’s Republican challenger who is closing the polling gap, called on New York law enforcement to investigate Hochul’s contract with Digital Gadgets.
“Kathy Hochul gave a no-bid $600M+ contract to a top campaign supporter after she unilaterally suspended NY’s competitive bidding law,” Zeldin tweeted. “The same day the donor offered to be the middle man for the COVID tests, Hochul agreed to pay twice the price. Where’s the AG, DA, & Comptroller?”
Kathy Hochul gave a no-bid $600M+ contract to a top campaign supporter after she unilaterally suspended NY’s competitive bidding law. The same day the donor offered to be the middle man for the COVID tests, Hochul agreed to pay twice the price. Where’s the AG, DA, & Comptroller? https://t.co/OTTpeRMqWP
— Lee Zeldin (@leezeldin) September 20, 2022
New York Republican Party chair Nick Langworthy called the payments a “brazenly illegal kickback scheme that defrauded taxpayers to the tune of hundreds of millions of dollars,” while also calling for an investigation into Hochul.
However, both Hochul and Tebele have denied any wrongdoing.
“Mr. Tebele has never had a conversation about (Department of Health) business with the governor — ever,” Tebele’s attorney said in July.
“Governor Hochul did not oversee the procurement process and was not involved in the day-to-day procurement decisions,” Hochul spokeswoman Hazel Crampton-Hays said. “She simply instructed her team to purchase as many available tests as possible to meet the tremendous need across the state, and they did exactly that to keep New Yorkers safe.”