Gov. Hochul’s administration seeks investigation of $10M ad blitz against her

Gov. Kathy Hochul’s administration wants an official investigation into the organizations behind a $10 million advertising blitz blasting her for changes to a home health care program for the elderly and disabled.

In a referral letter sent Friday to Attorney General Letitia James and the head of the state ethics board, State Health Commissioner James McDonald requested a formal inquiry into the Alliance to Protect Home Care and two other nonprofits tied to the expensive ad campaign accusing the governor of “gutting” the care program and allowing a Georgia-based company to “hijack” it.

McDonald, the state’s top health regulator and a Hochul appointee, accused the groups of “flouting the state’s ethics and charitable registration laws” in part by failing to disclose the true identity of the people or organizations funding the television, radio and online ads blanketing the state in recent months.

The move marks the Hochul administration’s strongest effort to date to push back against the ongoing, increasingly heated campaign against her administrative overhaul of the Consumer Directed Personal Assistance Program, which helps provide home care for roughly 250,000 New Yorkers.

But McDonald’s request faces a significant legal hurdle, since James is already representing Hochul’s administration in multiple lawsuits challenging the changes in some way. A spokesperson for James said the attorney general’s office is “not in a position to undertake an investigation as the [health] commissioner requested in his letter at this time” because of the potential conflict.

The state Health Department is in the midst of reducing the roughly 600 companies that handle payroll, timesheets and similar responsibilities for CDPAP to one. The Hochul administration said the current setup is ripe for fraud and abuse; it estimates the new setup will save $500 million a year and says it will have no effect on home care.

That’s angered groups like the Alliance to Protect Home Care, which represents advocates for the elderly and disabled and some of the companies being cut out of the program. Several companies have filed lawsuits against the state challenging the move. They claim Hochul and legislative leaders are setting the program up for failure and handing it over to a large company backed by private equity.

“We want accountability, we want regulation,” Brian O’Malley, who leads the Alliance, told reporters Monday. “We don't want tens of thousands of people losing their services come April 1.”

The Alliance’s multimillion-dollar campaign includes television ads where a handful of New Yorkers who rely on the home care program, including several in wheelchairs, speak straight to the camera and claim Hochul’s plan puts “lives like mine at risk.”

Last week, online news outlet New York Focus reported the true donors bankrolling the campaign were kept from public view. State lobbying records show the Alliance’s $10 million campaign was largely paid for with money from a second, little-known nonprofit known as United CDPAP — which has not revealed its donors.

In his letter, McDonald pointed to the New York Focus report and claimed the ad campaign is designed to “scare CDPAP consumers about the impacts of the new CDPAP structure” and dissuade them from cooperating with the transition. He accused United CDPAP of potentially violating state law by not disclosing its funders and failing to register with the state Charities Bureau, which is overseen by the Attorney General’s Office.

“By creating multiple layers of organizations and failing to provide the required reports, it is impossible for the public to know the source of funding for an eight-figure lobbying campaign — and an effort that is seeding the public sphere with harmful lies,” he wrote.

United CDPAP’s registered contact person is David Lobl, a former aide to Gov. Andrew Cuomo who is now a consultant. Late Monday, the nonprofit issued an unsigned statement saying it has “duly registered” with the Charities Bureau and has complied with all of the required lobbying disclosures.

The state requires lobbying organizations to disclose each donor that contributed more than $2,500 toward the lobbying effort.

O’Malley said United CDPAP supports the Alliance’s mission, but he stressed they are two different organizations.

“Our understanding is they've followed all the appropriate reporting and disclosure rules,” he told reporters Monday. “And that's really where it is. I can't say anything more about a separate organization.”

McDonald also questioned whether the Alliance and a related group — Consumer Directed Action of New York — have an illegal conflict of interest, since O’Malley serves as executive director of the former group and a lobbyist for the latter while effectively controlling both.

The commissioner sent his letter via email to James and Sanford Berland, executive director of the state Commission on Ethics and Lobbying in Government, or COELIG, which regulates lobbyists.

While James’ office shot down a potential investigation, a spokesperson for COELIG said the commission can’t comment on “the existence or pendency of any investigative matter.”

McDonald, meanwhile, is slated to testify at a state budget hearing in Albany on Tuesday, where lawmakers are likely to press him on the state of the program’s transition.