California Gov. Gavin Newsom's administration posted the full contract for its controversial "Golden State Start" diaper program late on a Friday night, the classic government move for burying bad news, after months of refusing to hand it over in response to public records requests. The $6.2 million no-bid deal with the nonprofit Baby2Baby is now drawing formal demands for a state ethics investigation.
The contract, posted to the California Department of Health Care Access and Information website, lays out the spending breakdown for a program that provides 400 free diapers to every newborn delivered at participating California hospitals. More than half of the $6.2 million, roughly $3.89 million, goes toward purchasing "Golden State Start"-branded diapers. Another $750,000 covers shipping, $610,000 goes to warehousing, $35,000 to communications, and $917,000 to labor spread across just 12 employees, averaging over $78,000 per worker.
The state estimates each diaper will cost up to 12.5 cents. Critics say that figure doesn't add up once you account for the overhead funneled through a politically connected middleman.
Newsom has repeatedly described the deal as having gone through a "competitive bidding process." But a CBS California investigation found the contract is labeled "NON-COMPETITIVELY BID" in the state's own contract database. The state issued only a Request for Information, explicitly marked "Not a Solicitation", to 15 organizations. An RFI, by its own terms, cannot be used to award a binding contract through competitive bidding.
Several applicants who responded to that RFI told CBS they either never received interviews or did not believe they were seriously considered for the work. The gap between Newsom's public characterization and what the state's own records show is difficult to square.
The Newsom administration has faced growing questions about how this arrangement came together, part of a broader pattern of resistance to press scrutiny that has drawn bipartisan frustration in Sacramento.
Making the arrangement more politically awkward: Baby2Baby's CEO sits on the board of a charity founded by Jennifer Siebel Newsom, the governor's wife. That connection has fueled accusations that the contract was steered toward an organization with personal ties to the Newsom family rather than awarded on merit.
The contract didn't just bypass competitive bidding by accident. Lawmakers tucked a single provision into California's nearly 900-page state budget that explicitly exempted the diaper program from competitive bidding laws, Department of General Services oversight, and public posting requirements for no-bid contracts.
That provision effectively stripped away the normal safeguards that exist to protect taxpayers when the state hands millions of dollars to a private organization. Without DGS oversight, the contract faced no independent review of its terms, pricing, or vendor selection.
State Sen. Roger Niello questioned why the state chose to route the program through a nonprofit at all, rather than allowing hospitals or government agencies to purchase diapers directly. As Niello put it:
"They're going through a middleman, a nonprofit, and that's going to have administrative expenses."
It's a fair question. When the state estimates each diaper costs up to 12.5 cents, and nearly $2.3 million of the $6.2 million contract goes to shipping, warehousing, labor, and communications rather than actual diapers, the overhead demands an explanation. A separate push by California Republicans to investigate Newsom for alleged misuse of state resources has only intensified pressure on the governor's office to justify these arrangements.
The Foundation for Accountability and Civic Trust, a Washington, D.C.-based government ethics organization, has called for a formal investigation. Executive Director Kendra Arnold did not hold back:
"The Newsom administration has been misleading about whether the contract was awarded in a competitive process and has mired the entire situation with a complete lack of transparency."
Arnold's organization has formally requested that California's state auditor investigate the deal, citing allegations of political favoritism, lack of transparency, and potential taxpayer waste. That request noted a $12 million contract extension tucked into Newsom's budget proposal, which would bring the total potential value of the Baby2Baby arrangement to more than $18 million.
The concerns are not coming from Republicans alone. Democratic State Sen. Caroline Menjivar told the New York Post that "the optics of this vendor is not good at all", a notable concession from a member of Newsom's own party.
The broader cloud hanging over Newsom's administration extends well beyond diapers. Federal investigators have been looking into the governor's political circle, with one Newsom ally revealed to have secretly worn an FBI wire during a federal corruption probe.
The price tag has drawn its own line of attack. Republican gubernatorial candidate Melissa Bailey accused Newsom of enriching connected insiders at taxpayer expense. As Fox News reported, Bailey stated:
"Gavin Newsom is stealing taxpayer money, laundering it to a nonprofit run by his wife's friend, to buy diapers at $.50 a pop. Diapers cost less than half that at major retailers. Connected insiders win. Taxpayers lose."
Fox News host Steve Hilton echoed the criticism, arguing that Newsom chose to route the money through "some total nonsense nonprofit, which the cronies of his are going to make money." The broader diaper initiative allocates up to $20 million in taxpayer funds, with $7.4 million already approved and $12.5 million more proposed.
Newsom's office has disputed the cost calculations offered by critics. The HCAI defended its selection of Baby2Baby by saying the nonprofit had the statewide distribution network, procurement capacity, and partnerships needed to launch the program quickly. Officials said they used the same evaluation process for all respondents to the RFI.
But that defense runs into a basic problem: the RFI itself was labeled "Not a Solicitation." Applicants who responded say they were never seriously considered. And the contract database calls the deal what it plainly was, non-competitively bid.
Meanwhile, Newsom has been raising money at a rapid clip from donors even as legal and ethical scrutiny of his administration intensifies. The combination of aggressive fundraising and aggressive secrecy around public contracts sends a message, just not the one a governor facing an ethics probe should want to send.
The contract release, while overdue, still leaves significant questions on the table. The administration has not explained why it chose to post the document late on a Friday night rather than during business hours. The exact date the contract was signed, as opposed to publicly posted, remains unclear. The names of the 15 organizations that received the RFI, and which ones responded, have not been disclosed.
Nor has the administration addressed what oversight mechanism, if any, applies to this contract now that the budget provision stripped away DGS review. The full term and duration of the deal remain unspecified in public reporting. And the precise nature of the relationship between Baby2Baby's CEO and Jennifer Siebel Newsom's charity, beyond board membership, has not been detailed by the governor's office.
These are not academic questions. They are the basic facts any taxpayer would expect to see before $6.2 million in public money flows to a single nonprofit, let alone $18 million if the extension goes through.
When a governor calls a no-bid contract "competitive," buries the paperwork on a Friday night, and relies on a budget loophole to dodge oversight, the diapers aren't the thing that stinks.
