Gavin Newsom’s no-bid contracts to campaign donors raise troubling ethics questions

No-bid government contracts inevitably raise questions. Chief among them: Are the juicy contracts going to companies that donate generously to the politician holding the purse strings?

In the case of Gov. Gavin Newsom, the answer is yes. Using the governor’s COVID-19 emergency powers, the Newsom administration has awarded massive no-bid contracts to health care companies that have also written six-figure checks to his campaigns.

Take, for example, UnitedHealth.

“The state awarded over $221 million in no-bid contracts this year alone for UnitedHealth subsidiary OptumServe to help with vaccine delivery,” reports Scott Rodd of Capital Public Radio. “Another no-bid agreement from last year — this one for testing — was extended by $61 million.”

How do Newsom and UnitedHealth know each other?

“The company has contributed hundreds of thousands of dollars to Newsom’s reelection campaign and ballot measure committee since 2018,” Rodd wrote. “That includes $131,000 in December 2020, sandwiched between the state awarding various no-bid deals worth hundreds of millions of dollars.”

Neither UnitedHealth nor the Newsom administration responded to Rodd’s request for comment.

UnitedHealth is just one of several major Newsom donors to reap big contracts during the coronavirus pandemic. Others include Blue Shield of California, Bloom Energy and BYD.

“A CapRadio investigation found an overlap of at least a half-dozen companies that made substantial contributions to Newsom and received no-bid contracts from the state, influential appointments, or other opportunities related to the state’s pandemic response,” wrote Rodd in February. “The contributions range from tens of thousands to hundreds of thousands of dollars. The contracts range from $2 million to over $1 billion — including the one awarded to Blue Shield for vaccine distribution ... worth up to $15 million.”

The COVID-19 pandemic provides one logical explanation for these lucrative no-bid deals.

Governing during this global health emergency has required urgent and unprecedented action to procure equipment, manage testing sites and distribute vaccines. It makes sense that California would partner with big private sector companies and move as quickly as possible to solve potential problems.

In a political system based on legalized bribery in the form of campaign contributions, it’s not surprising to see large companies cutting campaign checks to the sitting California governor. Unlike Newsom, however, most California governors didn’t have blanket authority to return the favor with gargantuan no-bid contracts. While it’s entirely possible Newsom has only the state’s best interests in mind, how can taxpayers be certain?

“The public’s confidence in these contracts has to be maintained,” Bob Stern, co-author of the state’s Political Reform Act, told Rodd. “We have to be sure these contracts are being given because the company can do the job better than anybody else.”

Stern said Newsom seemed to have a “tin ear” when it comes to perceiving how handing out lucrative no-bid contracts to his political donors might look to the public.

Newsom, who paid a heavy political price for his shocking decision to attend a lobbyist’s pandemic birthday party at the French Laundry in November, should heed the warning. Unfortunately, this governor excels at handing ammunition to his opponents. As he fends off a recall campaign, the billions of dollars in no-bid contracts will likely draw scrutiny.

If Newsom were a Republican, Democratic politicians and voters would surely scream in protest if he appeared to be rewarding his donors. In a deep blue state like California, however, it’s too easy to become complacent about situations that should set off alarm bells.

That’s why Newsom would be wise to set a noble precedent and sidestep any hint of possible corruption. He can do this by returning all recent political donations from companies receiving no-bid contracts from his administration and barring these companies from contributing to his upcoming campaigns.

This story was originally published April 1, 2021 at 5:00 AM with the headline "Gavin Newsom’s no-bid contracts to campaign donors raise troubling ethics questions."