ALBANY, NY — Joseph Hernandez, Republican candidate for New York State Comptroller, today responded to a 55-page lawsuit filed by the U.S. Department of Justice accusing Governor Kathy Hochul’s administration of rigging the bids on an $11 billion Medicaid homecare program and allowing a hand-picked company to siphon millions of taxpayer dollars out of the system.
The complaint names State Health Commissioner James McDonald and State Medicaid Director Amir Bassiri as defendants. According to the Justice Department, the administration pushed for the consolidation of payroll services for nearly 250,000 home care recipients to a single favored vendor named Public Partnerships LLC (PPL).
Allegedly, State Senator James Skoufis produced draft budget language naming PPL before any bid existed, and her office didn’t deny writing it. FOIL’d emails show the Health Department courting PPL early, with the company noting “our lobbyist is starting to hear chatter.”
Hochul forced a chaotic transition despite clear warnings it would fail. A senior Justice Department official said the state’s failure to police a favored vendor that unlawfully siphoned Medicaid dollars “betrays the public trust.”
“This is theft from New Yorkers, plain and simple. Millions of taxpayer dollars have been funneled out of Medicaid through a rigged contract,” explained Hernandez. ” Hochul sold this scheme as a way to fight Medicaid fraud. The federal government is now telling New Yorkers that the so-called reform was the fraud.”
The lawsuit points directly at the Governor’s own office. In a September 2024 exchange cited in the complaint, state officials scrambling to size up rival bidders said they were acting under “pressure from our Governor’s Office.” When PPL itself asked the state to extend the rollout from three months to nine because it could not hire staff fast enough, Hochul’s office refused and demanded the transition be finished on its own political timeline.
“The pressure on the transition came from the Governor’s office, the bid was wired for a favored vendor, and New Yorkers and their caregivers paid the price,” Hernandez continued. “This is corruption, and it runs straight to the top. Albany has been looting the people of this state for years, and it has to end now.”
The multibillion-dollar contract at the center of the case was steered around the independent pre-payment review of State Comptroller Tom DiNapoli. His office holds the power to catch rigged and wasteful contracts before a dollar goes out the door. For more than a year, as lawmakers, home care providers, and now federal prosecutors sounded alarm after alarm, DiNapoli said nothing.
“It took the federal government to do the job New York’s own Comptroller refused to do,” Hernandez said. “After nineteen years in Albany, DiNapoli has become a rubber stamp who protects the politicians who keep him in office instead of the taxpayers who pay the bills. An $11 billion program was rigged right under his nose, and DiNapoli was asleep at the wheel.”
Hernandez called for a full, independent investigation, the public release of every contract and communication tied to the PPL deal, legislative hearings under oath, and a top-to-bottom forensic audit of New York’s Medicaid contracting and payment systems.
“New Yorkers are entitled to the truth: who knew, when they knew it, and why warnings were buried to protect a politically connected vendor,” Hernandez added. “Where billions of dollars flow, audits must follow. As Comptroller, I will follow the money wherever it leads, restore real pre-audit oversight, and make sure no insider deal like this ever escapes scrutiny again. When I’m elected, the corruption ends day one, and New Yorkers will finally have a real watchdog in Albany.”