ALBANY — A powerful lawmaker on Tuesday called allegations that Gov. Kathy Hochul’s campaign unfairly profited from a treasury deal with a state vendor “alarming,” but said the Senate investigation is not looking into the crime charges.
Sen. James Skoufis, D-Orange County, was pressured by GOP lawmakers to use the investigative committee’s subpoena power to conduct an investigation into the state’s decision to pay $637 million to a New Jersey-based vendor, Digital Gadgets, to pay for about 52 million COVID-19 rapid antigen test kits.
The Digital Gadgets contracts were approved by state officials without a tender at a time when Hochul had granted itself special emergency powers to deal with the pandemic. These emergency powers allowed contracts to be entered into by the Hochul administration without review by the State Audit Office.
According to published reports, Hochul’s campaign has received around $330,000 in donations over the past few months from Digital Gadgets owner Charles Tebele and others associated with the company.
The state contracts involving digital gadgets were first spotlighted by the Albany Times Union newspaper.
Said Skoufis: “The reports I have read in the Times Union and elsewhere are alarming and there is no doubt about that.”
But he said the committee of inquiry was set up to “investigate legislative issues and try to develop legislative solutions.
“But we’re not finding any crime, and pay-to-play is a criminal charge,” Skoufis added. He said Sen. Thomas O’Mara, R-Big Flats, who has urged Democrats to use subpoenas to review the contracts, misunderstands the parameters the committee must work within.
“It’s just typical political cockiness,” Skoufis said of Republican calls for a Senate investigation. He said the proper place for such an investigation is the attorney general or local district attorneys.
The Hochul administration denies any wrongdoing in connection with the Digital Gadgets deal. The pay-to-play allegations swirl at a time when Hochul and GOP rival Lee Zeldin, a Long Island congressman, face each other in a gubernatorial election set to be decided on Nov. 8.
A spokeswoman for the governor, Hazel Crampton-Hays, said in a statement: “Governor Hochul did not oversee the procurement process and was not involved in day-to-day procurement decisions. She simply directed her team to purchase as many available tests as possible to meet the tremendous need across the state, and they did just that to keep New Yorkers safe.”
O’Mara, Republican senior member of the investigative committee, said a Senate investigation was warranted given the circumstances. “I think that pay-to-play aspect may not be a direct bribe, but it certainly has aspects that should be looked into.”
O’Mara added, “I will not hold my breath while awaiting an inquest. One of the problems with Albany’s one-party rule is that the legislature, which is the same party as the governor, is completely absent from any realm of oversight and control of the other branches of government.”
Tebele, O’Mara said, held a fundraiser for Hochul a week before the state approved the contract with his company. Citing newspaper reports, the senator said Hochul avoided the usual bidding process and Office of the Comptroller oversight by declaring a state of emergency across the country
Because Democrats have large majorities in both the Senate and Assembly, the committees are Democrat-led, and if the Senate Inquiry Committee is to open an investigation, Skoufis, as chairman, would have a significant say in any decision.
Skoufis said he plans to work with the Senate Procurement Committee to investigate issues affecting government contractors with campaign donors.
The Hochul government’s approval of the Digital Gadgets contracts also raised questions, as the state ended up paying far more for the COVID tests than the state of California, noted Bill Hammond, a researcher with the Empire Center for Public Policy
Hammond suggested the controversy over the $637 million payments to Digital Gadgets could be a “first test case” to see if a newly appointed government oversight body, the Commission on Ethics and Lobbying in Government, would act executive oversight can be effective state government.
“That’s exactly the sort of thing this commission should be looking at,” Hammond said.
He pointed out that the company that signed the contracts and those in charge of the company had not made any political donations in New York until last year. The state, he said, ended up acquiring far more test kits from Digital Gadgets than it distributed. “When you add up all the details, it’s hard to explain,” he said.
State officials noted that as Omicron infection surged in December 2021, they moved to increase home testing capacity to ensure schools can reopen and nursing homes can operate safely.
“The supply of tests available at the time — and at lower prices — was not sufficient to meet demand,” said state health department spokesman Cort Ruddy.
“The state has been working to provide New Yorkers with the best cost while addressing delivery availability and delivery schedule requirements,” he added.
The more than $330,000 in donations from Charles Tebele and his wife Nancy include payments to the campaigns of Hochul, Lt. gov. Antonio Delgado and former Lt. gov. Brian Benjamin, who vacated the office earlier this year after his arrest in an unrelated campaign corruption scandal, according to state campaign finance records.
O’Mara argued that a state Senate investigation should include a review of the Hochul campaign’s decision to hire the Tebeles’ son, James Tebele, as a paid campaign aide. The son was identified as an enrolled student.
In May, James Tebele shared a tweet indicating that the Hochul campaign had raised a total of $31.7 million in donations.
The Times Union reported that the state paid the $637 million to Digital Gadgets in 239 payments from Dec. 30 to March 25.
