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Hochul donor got bigger bucks than competitors in COVID test deal

Gov. Kathy Hochul had New Yorkers pay twice as much for COVID tests from a company tied to nearly $300,000 in donations to her campaign compared to other state vendors, a new report details, raising fresh concerns of alleged pay-to-play behavior ahead of the Nov. 8 election.

“Whether it was pay-to-play or total incompetence – New York taxpayers and then the federal taxpayers got massively ripped off,” John Kaehny, of the good-government group Reinvent Albany, said of the Digital Gadgets deal funded by New York taxpayers with the help of federal relief aid.

While some companies charged the state just $5 for rapid tests, the N.J.-based Digital Gadgets got as much as $13 per unit in a total of $637 million worth of no-bid deals for millions of tests as Hochul pushed schools to stay open amid the omicron wave last year, according to the Times Union

The deal was made under suspended procurement rules enabled by a state of emergency that Hochul has renewed every month since late last year.

Some Republicans are now calling for Hochul to come clean about the questionable purchases.

A picture of NY Gov. Kathy Hochul.
NY Gov. Kathy Hochul had New York residents pay twice as much for at-home COVID tests from one of her campaign donors.
Matthew McDermott

“At the very least, the public deserves a hearing to address how this deal was arranged, why it lacked a formal contract, and the seemingly questionable timing of relevant communications,” Republican Assembly Minority Leader William Barclay said in a statement Friday.

Government watchdogs say the test purchases stick out even compared to other alleged instances of her administration helping donors tied to causes as diverse as rapid tests, the Medicaid transportation services, and overhauling Manhattan’s Penn Station.

Hochul raised eyebrows for backing a Penn Station overhaul that would potentially direct more than $1 billion in tax breaks to Vornado Realty Trust after its head, Steve Roth, gave the maximum $68,700 to her campaign in December.

A company called Medical Answering Services has landed millions in state Medicaid business under Hochul’s watch after its president and his wife gave $52,600 stretching back to last September when she was still lieutenant governor under Cuomo.

Hochul also got slammed for backing $600 million in public money for a new stadium for the Buffalo Bills, who do business with a company employing her husband Bill Hochul, who has officially recused himself from the matter.

“This deal looks to be the dirtiest,” Kaehny said of the business Hochul did with Digital Gadgets on rapid tests in late 2021 and early 2022.

The incumbent Democrat – who has raised more than $34 million in campaign cash at a rapid rate over the past year – has denied that campaign cash has anything to do with official decision-making on government contracts.

Digital Gadgets founder and CEO Charlie Tebele.
New Jersey-based Digital Gadgets founder and CEO, Charlie Tebele charged $13 per COVID test, a total worth of $637 million of no-bid deals.

“At a time when at-home tests were nearly impossible to find in stores and the Omicron variant caused a spike in COVID-19 cases, state agencies worked diligently to secure a large number of tests to allow kids across New York to safely return to in-person learning and protect residents and visitors in nursing homes,” Hochul spokesman Avi Small said in a statement.

A campaign spokesman told The Post Friday that “high ethical standards” mean donors have “no influence” over government decision-making despite concerns about the timing of the Digital Gadgets deal.

The company offered to sell the state rapid tests last December shortly after Hochul declared a state of emergency suspending purchasing rules requiring state Comptroller Thomas DiNapoli to sign off before state contracts get finalized.

It remains unclear to what extent the Hochul administration sought to negotiate down the price for 52 million tests delivered on time through two purchase orders that charged $13 and $11.50 per unit, according to documents obtained by the Times Union.

Two other companies charged the state at least several dollars less per unit though the administration has claimed those bought through Digital Gadgets are of a higher quality than those offered by other companies, which could only provide a limited volume in time for the reopening of schools amid the omicron wave.

“Because of the reliability of the tests themselves and the assurances around delivery, comparing US-made AccessBio tests to inferior quality tests that were manufactured in China is not valid,” John Gallagher, a spokesman for Digital Gadgets, said in a statement.

Gov. Kathy Hochul receiving a vaccination.
A campaign spokesman told The Post Friday that “high ethical standards” mean donors have “no influence” over government decision-making.
Matthew McDermott

The Department of Health paid Digital Gadgets on Dec. 29, 2021, and March 25, 2022, for the tests, which were being distributed throughout the winter and spring, according to a DOH spokesman, who added that no new orders were made after January.

Company honcho Charlie Tebele – whose family has given roughly $300,000 to Hochul’s campaign – and his wife gave the maximum $69,700 each to her run for governor in May, state records show.

With COVID-19 caseloads steadily dropping since then, the state still has about 7 million tests bought through Digital Gadgets slated to be distributed through the end of the year, according to the Times Union.

“They way over-bought at a very high price – using these emergency powers – from a major donor. I mean, it’s just – the whole thing looks very bad,” said Bill Hammond, a senior health care fellow at the Empire Center for Public Policy.

The suspect pay-to-play situations are transforming Hochul’s prolific fundraising into a political liability in her race against Republican Rep. Lee Zeldin, whose mid-July campaign filings show he had $1.57 million on hand compared to $11.7 million for Hochul.

The GOP standard-bearer has campaigned heavily on the notion that Hochul sold out to campaign donors after replacing disgraced ex-Gov. Andrew Cuomo last August following his resignation amid a multitude of sex-harassment and COVID-handling scandals.

“Kathy Hochul loves declaring health emergencies, because that’s how she hoards extra self-claimed powers that allow her to award MASSIVE no-bid, ridiculously priced government contracts to her top campaign donors, going around the state’s competitive bidding laws,” Zeldin tweeted Friday afternoon about the Digital Gadgets deal.

Gallagher said Tebele “never” spoke to Hochul about anything related to COVID-19 tests while claiming the seemingly outlandish price was fair to taxpayers given the timing of the deals.

“Digital Gadgets provided 52 million high-quality AccessBio tests at a price that was very competitive at the time, and because the tests were manufactured in New Jersey, were able to provide a level of certainty around delivery and shipping that the State needed,” Gallagher said in the statement.

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