Liu: City Contracts Out Of Control

The Mayor of Money says he has to lay off teachers because the city budget is squeezed and his financial wizardry - the main rationale for his illegal third term, btw - cannot save us from ruin without the layoffs.

But Comptroller John Liu shows why city finances are not as healthy as they should be with this report:

In a scathing critique of the Bloomberg administration’s oversight practices, New York City’s top fiscal watchdog has accused the city’s main agency for economic development of allowing a contract with a construction company to balloon by tenfold in three years to nearly $74 million, and authorizing over $3 million in dubious payments.

The accusations, leveled against the New York City Economic Development Corporation, are detailed in an audit that is scheduled to be released on Thursday by John C. Liu, the comptroller.

The audit is the latest in an increasingly hostile battle between the agency, which has become a vital vehicle for Mayor Michael R. Bloomberg’s aggressive development agenda, and Mr. Liu, whose office must approve the corporation’s contract with the city every year.

According to the audit, the agency approved 21 changes between July 2008 and January 2010 to a contract with Turner Construction Company, which was asked to provide facility management and construction management services at the Brooklyn Army Terminal, Essex Street Market building and other sites. As a result, the contract’s value jumped to $73.5 million, from $7.5 million.

The audit says the agency authorized $3.3 million in “inappropriate and questionable payments” to Turner. They include improper reimbursements for unsubstantiated expenses and unnecessary costs for loading, storing and transporting contaminated soil from the Brooklyn Army Terminal site.

Referring to an alarming “lack of involvement,” the audit says the agency demonstrated a “total reliance” on the construction company and “relinquished far too much control and supervision in reviewing and overseeing the work carried out by Turner.”

Mr. Liu said, “Given the ongoing economic and budget uncertainties, we can neither tolerate nor afford business as usual at the E.D.C.”

...

The agency is one of New York’s most powerful entities. With a mission of encouraging economic growth through redevelopment programs and other efforts, it is now managing roughly 600 capital projects valued at $1.6 billion, including planned redevelopments in Coney Island in Brooklyn and Willets Point in Queens.

But Mr. Liu, a former member of the City Council, has long questioned the agency’s transparency. In one audit that he released last April, Mr. Liu accused the agency of failing to turn over to the city more than $125 million in payments, taxes and fees through leases on buildings in Times Square and the sale of city properties. Bloomberg administration officials strongly took issue with the audit, but agreed in July to hand over more than $120 million in rental payments by 2014.

In another audit, released in February, Mr. Liu said the agency was doing a poor job overseeing the Water Club restaurant on the East River between 30th and 32nd Streets. Auditors had a hard time tracking down cash receipts for the restaurant — something that “shortchanges the city,” the audit said.

This time, the audit, which was actually initiated under Mr. Liu’s predecessor, William C. Thompson Jr., focuses on the agency’s dealings with Turner, which has worked on numerous projects in the city.

One of the most controversial was its work on the new Yankee Stadium, which the current audit did not mention. Even though a contract to do some of the work was awarded to a company called Central Excavators, the Yankees and Turner acknowledged that the work was performed by Interstate Industrial, a company that city investigators have long said had connections to organized crime, and that had been prohibited from doing city work since 2004. As a result, the Yankees said they had hired an independent construction monitor to oversee the stadium project, including the hiring of subcontractors by Turner.

How's that for Bloomberg's financial wizardry?

Contracts handed to organized crime, lax oversight, companies given contracts get to run oversight on themselves, questionable payments to contractors - that's what Bloomberg has brought us these past ten years.

The UFT needs to tie Liu's audits to Bloomberg's city management and start a new round of commercials called BLOOMBERG'S NEW YORK: MISMANAGED FINANCES, CRONYISM, AND CORRUPTION.

Because John Liu has laid the groundwork for this with all his audits showing just how much money is being stolen or wasted by Bloomberg.