State Comptroller Thomas DiNapoli rejected a $27 million no-bid contract between the state education department and an education technology company owned by Rupert Murdoch's News Corp.
DiNapoli's office cited "ongoing investigations and continuing revelations" with respect to News Corporation, which has been under scrutiny because of a phone hacking scandal involving one of its British tabloids.
Its letter to the state education department also said the record remains incomplete with respect to "vendor responsibilities involving the parent company of Wireless Generation."
Murdoch purchased Wireless Generation late last year. The Brooklyn-based company helped New York City build ARIS, a data system for tracking student achievement, and it was to create a similar system for the rest of the state with federal Race to the Top funds.
A state education department spokesman accused the comptroller of allowing "political pressure" to get in the way of vital technology. Teachers unions had filed a complaint to DiNapoli about the contract and Murdoch's ownership of Wireless Generation. But the state said it chose Wireless because of its experience building data systems, specifically in New York City.
The comptroller invited the state to pursue a new round of competitive bidding and the state says it's reviewing its options. A spokeswoman for Wireless Generation indicated the company would be willing to try again.
"Viewed on its merits, we strongly believe Wireless Generation's bid was the best choice for the State," said spokeswoman Joan Lebow. She cited the company's "long track record of success and more than a decade of experience partnering with municipalities and districts in 50 states by providing tools and services that help teachers improve student learning."
Murdoch also hired former Schools Chancellor Joel Klein as a vice president of educational technology last fall. There are conflict of interest rules preventing him from dealing with the city schools. But critics have suggested that his involvement with Wireless Generation as chancellor gave the company an edge when the state wanted a new data system. The state has said it began looking into a partnership with Wireless Generation a couple of years ago, long before he went to work for Murdoch.