New York Gov. Kathy Hochul is defending a decision to buy $637 million in COVID-19 rapid tests from a campaign donor.
Her Republican opponents have seized on the issue, and one government reform group said it merits an investigation.
The controversy centers on her administration’s purchase of more than 50 million in-home COVID tests last December and January. The tests were manufactured by AccessBio, a New Jersey-based company, but the state health department did not buy the tests directly from the company. It instead used an intermediary procurer, a company called Digital Gadgets.
The owner of Digital Gadgets, Charles Tebele, and his family members are donors to Hochul’s election campaign, contributing over $300,000. The bulk of those contributions came after the purchase orders for the tests had been signed.
The transactions were first reported by the Albany Times Union. The paper also found that the state of California also bought COVID tests from AccessBio, but they did not use a middleman to obtain them. That state paid only about half as much money per test.
Hochul said she didn’t know that the owners of Digital Gadgets had contributed to her campaign. She said she tries to keep campaigning and governing separate. But she defended the price paid for the tests, saying it was at a time when the omicron variant was spreading, and she was concerned about having enough tests to keep the schools open.
“My directive to my team was, ‘The only way we’re going to get kids back in schools is to amass as many test kits from wherever you need to get them. Just go do it,’” Hochul said on Sept. 23. “That was my only involvement.”
The governor said “no contribution has ever had an effect on any public policy decision” in her administration. And she said she “follows all the rules.”
John Kaehny with the government reform group Reinvent Albany said there are several troublesome questions surrounding the deal.
“The number of red flags going up here is phenomenal,” Kaehny said.
He said the state had access to lower-priced tests through other companies but chose to buy the bulk of them from Digital Gadgets. The company is not an established medical supplier and had no history selling the tests.
Kaehny said the company also has a history of questionable transactions. Former New York City Mayor Bill de Blasio contracted with Digital Gadgets to supply ventilators earlier in the pandemic. Company owners also gave large donations to de Blasio’s 2020 campaign for the presidency. Some of those contracts were scrapped after the company failed to deliver on the ventilators.
Another warning sign, Kaehny said, is that since Hochul was operating under emergency powers granted to her during the pandemic, she did not need to request bids for the contract, as is normally required under New York state law. The emergency order also stripped away the state comptroller’s powers to review the purchase orders.
“The sad, sad reality about this is that this looks like one of the biggest pay-to-play scandals in New York state history,” said Kaehny, who added the “truth” of what occurred needs to be uncovered.
Kaehny’s group is calling for a federal civil and criminal investigation of the deal. Federal pandemic-related subsidies were used for the purchases.
Hochul’s opponent in the November elections, Long Island Rep. Lee Zeldin, a Republican, is highlighting the issue in a campaign ad.
“Hochul rigged a lucrative COVID testing contract for a large donor at twice the price,” the narrator intones as threatening music plays in the background.
Zeldin, at a recent campaign appearance in Rochester, called it “blatant, pay-to-play corruption.”
“(There’s) no evidence at all of Kathy Hochul trying to negotiate a better price for New York taxpayers,” Zeldin said on Sept. 29. “(There’s) no evidence of Kathy Hochul going to the company that actually manufactured the COVID tests to try to get a better deal directly from them. That’s what California did. And they paid 45% less.”
Despite the criticism, Hochul is not backing down and continues to say that she did nothing wrong.
“I would do that all over again, I needed to get people protected,” Hochul said on Sept. 28. “We achieved the result.”
But Hochul conceded there could be “more safeguards” in place, and she said she’s aware of the importance of public perception.
In a statement, Hochul's press secretary, Hazel Crampton-Hays, offered more context to the issue.
"At a time when the demand for COVID tests so outstripped the supply that New Yorkers spent hours lined up around blocks to try to buy tests before stores went out of stock,” she said, “Governor Hochul sought to meet this enormous need for testing by directing her team to procure as many tests as possible to distribute to nursing homes, senior centers, local governments that could not secure the tests they needed on their own, and to help schools reopen safely after winter break."
Crampton-Hays said the administration worked with "federal and local partners on pop-up testing sites, and stocking mass vaccination sites with tests” and called those efforts successful, noting that in early January, “over 95% of New York's school districts operated completely in person when major school districts across the country conducted remote learning."
She added that Hochul, in public briefings during the winter surge, updated New Yorkers on the state's efforts to procure tests. She also said state officials reached out to vendors to locate tests to buy, and vendors reached out to the administration as well.
Crampton-Hays said Hochul did not oversee the procurement process and “was not involved in the day-to-day procurement decisions."
"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," Crampton-Hays said. " As we have always said, campaign donations do not have any influence on government decisions, and we reject any implication otherwise."