Why do diabetics have a higher risk of a baby with a congenital abnormality?

Free oxygen radicals. Oxidative stress showers the conceptus with free/reactive oxygen species that can kill cells of the rapidly developing embryonic pole and cause lethality or specific anatomical defects. That's why pregestational diabetic mothers have higher risk for pregnancy loss and 2-3-fold increased risk for congenital anomalies compared to non-diabetic controls.