Editorial: A terrible deal for taxpayers – Times Union

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Fact No. 1: Digital Gadgets head Charlie Tebele and his family members have donated nearly $300,000 to Gov. Kathy Hochul’s campaign.

Fact No. 2: The Hochul administration signed two purchase orders to buy $637 million worth of at-home coronavirus tests from Digital Gadgets, even though the distribution company’s per-test price was significantly higher than what was being charged by competitors.

What are we to make of those two facts? Well, if we’re to believe the Hochul administration, one has nothing to do with another. The purchase, it says, was not influenced by the campaign contributions.

“I was not aware that this was a company that had been supportive of me,” the governor, a Democrat, said during a July meeting with reporters. “I don’t keep track of that. My team, they have no idea.”

That, of course, is what politicians almost always say. But there are reasons to be skeptical of the claim — or to find it downright laughable.

As reported by Times Union investigative reporter Chris Bragg, the state paid as much or more than consumers would pay in a retail store for the tests from Digital Gadgets, despite buying 52 million of them. What happened to getting a deal when you buy in bulk?

The administration justifies the purchase by saying Digital Gadgets, a New Jersey-based wholesaler of hoverboards and other electronic devices, was able to deliver the tests when they were otherwise in short supply.

Yet as Bill Hammond of the Empire Center for Public Policy has written, the administration continued paying for significant quantities of the tests from Digital Gadgets after the omicron wave had subsided, and with it the demand for testing. Meanwhile, the state did not try to stop the orders before paying the full $637 million, even though it likely had the ability to do so, and ended up buying more tests than it needed.

As we’ve said before while arguing for campaign finance reform, we believe political contributions influence public policy decisions. If they didn’t, why would companies continue to be so generous? Are we to believe that Mr. Tebele and his family don’t have better uses for nearly $300,000?

But even if we accept Ms. Hochul’s claim, there is cause to be alarmed by the state’s deal with Digital Gadgets. The higher price of the company’s tests — at $12.25 per test, more than double what some other companies were charging — cost New York taxpayers hundreds of millions of dollars. Cort Ruddy, a Department of Health spokesman, declined to say whether the agency had negotiated with Digital Gadgets over the price.

The apparent waste is obscene, and it perhaps could have been avoided had Ms. Hochul not issued a disaster emergency order last November suspending the normal competitive bidding process, which includes oversight from the state comptroller’s office. The order gave her administration unchecked authority over COVID-19 supply purchasing.

The very month of the order, Mr. Tebele and his wife together gave the Hochul campaign $50,000. In the months since, through May, they gave nearly $90,000 more, maxing out what they could legally donate, and an array of other Tebele family members have likewise given large amounts to Ms. Hochul.

A coincidence? It would be naive, at best, to think so.


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