A New Jersey company tied to an alleged $637 million pay-to-play scheme involving Gov. Hochul is now suing her administration — accusing Albany of wrongfully denying it additional business.
Dayton, NJ-based Digital Gadgets claims the Department of Health violated its own contract rules by negotiating a deal for rapid COVID-19 tests last spring before opening up the bidding to other businesses who could not offer goods of the same quality.
“Digital Gadgets brought this lawsuit to ensure the state consistently complies with the rules they established along with the bid process,” company spokesman John Gallagher told The Post after the suit was filed in the Albany County state Supreme Court.
According to the lawsuit, state officials blocked repeated requests for an explanation of why Digital Gadgets did not get concessions to supply more rapid tests after delivering millions between December 2021 and March of this year, as New York battled an Omicron variant-fueled spike in cases .
The company also alleges the state tweaked bidding requirements to benefit other companies.
“The DOH is blocking Digital Gadgets’ ability to demonstrate that the winning bidders do not meet the specifications issued by the department and to prove that they are the only bidder that satisfies what was asked for in the invitation to bid,” Gallagher said.
“Digital Gadgets is going through the same recourse process that any other bidder would be relegated to.”
Spokespeople for the department and state Comptroller Thomas DiNapoli, who is also named in the suit, declined to comment Thursday about the pending litigation, first reported by WSKG radio in Binghamton.
Digital Gadgets wants the court to declare the state violated its own rules and award it court costs and “further relief as the court deems just and proper,” according to the lawsuit.
The lawsuit marks an ironic turn for the company, which got $637 million in no-bid business after Hochul suspended normal contract rules in late 2021 while declaring a state of emergency as COVID-19 cases spiked.
Meanwhile, company founder Charlie Tebele and his family funneled roughly $300,000 to Hochul’s reflection campaign while Digital Gadgets charged New York nearly twice as much as states like California for the same tests.
“This was a disastrous deal from the beginning. But even by Albany standards, it’s quite a plot twist. The Hochul Administration being sued by the same people who benefitted from a no-bid contract. It would be comical if it didn’t demonstrate how dysfunctional this entire situation is,” Assembly Minority Leader William Barclay (R-Fulton) said Thursday.
“Awarding a $637 million contract to a major campaign donor screams ‘pay-to-play’. Of course the Democrats swept it under the rug, but it will be interesting to see what comes out of court.”
The alleged pay-to-play scheme – Tebele and Hochul have denied wrongdoing – was one of a series of donor controversies that weighed down Hochul’s campaign against Republican Rep. Lee Zeldin (R-Suffolk), who came closer to winning a statewide race than any GOP nominee in two decades.
“Looking forward to the discovery in this case,” Assemblyman and Congressman-elect Michael Lawler quit on Twitter Thursday, “starting with any communications between Digital Gadgets and the Hochul campaign.”