No-bid contracts = 🚩Red flags + eroding public trust

A CapRadio investigation found an overlap of at least half-a-dozen companies that made substantial contributions to Gov. Newsom and received no-bid contracts from the state, influential appointments, or other opportunities related to the state’s pandemic.

In 2018, UnitedHealth made two contributions to Newsom for over $58,000. In December 2019, it dropped another $31,000 into his reelection campaign.

During the pandemic, Newsom turned to UnitedHealth to solve some of California’s most vexing challenges: COVID-19 testing and data tracking. The state awarded a no-bid contract worth up to $177 million to a UnitedHealth subsidiary to expand testing. In the months following, the state would award another $315 million in contracts to the company’s subsidiaries through an expedited bidding process.

UnitedHealth

• 2018: Contributed $58,400 to Newsom
• December 2019: Contributed $31,000 to Newsom
• April 2020: Subsidiary OptumServe received $100 million no-bid contract to expand testing in California; later increased to $177 million
• August-October 2020: Subsidiaries received at least $315 million in contracts, through expedited bidding process, for COVID-19 data tracking and testing
• December 2020: Contributed $31,000 to Newsom and $100,000 to Newsom’s ballot measure committee

In April, Newsom touted the state’s partnership with UnitedHealth subsidiary OptumServe, which would set up testing sites in hard-to-reach and underserved communities.

“We know that communities of color are disproportionately affected by COVID-19,” Newsom said in a press release. “We must ensure that we are deploying testing equitably in an effort to reduce the higher death rates we are seeing in African American and Latino communities.”

UnitedHealth and Newsom deny any wrongdoing. And while there’s no evidence to suggest either broke the law, government ethics experts say even the appearance of wrongdoing raises serious red flags and threatens to erode public trust — especially if there’s a pattern.

To improve transparency, the state created a website that lists COVID-19 contracts worth $250,000 or more. Of the 100-plus contracts listed — many awarded with limited or no competitive bidding.

“I really think that the governor has a tin ear in terms of receiving huge campaign contributions and providing sole-source contracts for corporations that were giving him these contributions,” said Bob Stern, a registered Democrat, former general counsel to the California Fair Political Practices Commission and principal co-author of the state’s Political Reform Act.