In December, Gov. Hochul's administration gave Digital Gadgets a $637 million contract to purchase 52 million at-home rapid coronavirus tests.
In reality, Digital Gadgets founder Charlie Tebele and his family are among the biggest financial supporters of Hochul's campaign. Tebele has hosted several fundraisers to support Hochul.
A fundraiser on November 22 was held just a month after Hochul signed the agreement in conjunction with Digital Gadgets. In addition, Hochul's agreement was approved under emergency circumstances which may have helped facilitate an agreement.
The Times Union reported:
The transaction was made possible by Hochul's renewed suspension of the rules for competitive bidding in the purchase by administration of COVID-19 products — a policy shift which was also implemented in the past by the then-Gov. Andrew M. Cuomo. In an executive order of emergency, Hochul suspended those rules on November 26, just four days following the Tebele fundraising event.
It is interesting to note that Tebele's son James began an internship with Hochul's campaign in the month of November 2021, at the beginning of his Digital Gadgets contract, before eventually securing a job as an election “finance associate” in May 2022.
Tebele, along with his wife and family members, have donated around $300,000 to the campaign of Hochul, with $70,000 of the funds being given prior to the Digital Gadgets contract being made. Additionally, Tebele hosted another fundraiser for Hochul in April, about 2 weeks after New York made the final payment of the contract worth $637 million.
New York also reportedly paid 45 percent more than California for the same speedy coronavirus testing by using third party supplier Digital Gadgets.
The Times Union explained:
When it came time to sell the antigen test to New York, Tebele's company was able to charge a higher price in comparison to other sellers the state employed last winter. California purchased identical tests Tebele offered at the same price, but at 45 percent lower per unit.
In contrast to California who bought Access Bios “Carestart” test directly from the manufacturer, the Hochul administration purchased the tests via Digital Gadgets, a third-party distributor who received an undetermined cut.
New York taxpayers could have saved $286 million had the state had paid the same amount in California for the speedy tests.
John Kaehny, executive director of Reinvent Albany, told the New York Post there's a “dark cloud of pay-to-play” that surrounds Hochul's agreement with Digital Gadgets.
“The more we know about this, the worse it is. This is an important issue,” 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 gap in the polls, is urging New York law enforcement to look into Hochul's agreement in partnership 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 that the donor offered to serve as the middleman for COVID tests, Hochul agreed to pay double the cost. Where is the AG, DA, & Comptroller?”
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,” as well as insisting on an investigation of Hochul.
But the two, Hochul and Tebele, are both denying any wrongdoing.
“Mr. Tebele has not ever had a discussion about (Department of Health) business with the governor — never,” Tebele's attorney stated at the time of 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 stated. “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.”