A major technology contractor for the Department of Education has been using workers in Turkey and India to service the school system's computer network - and charging taxpayers $110 an hour.
Future Technology Associates paid a Turkish company $3.4 million from 2006 to 2009 to supply 12 programmers from Turkey, Special Commissioner of Investigation Richard Condon has found. An additional three worked from India.
The Turkish firm, Krono Bilgisayar, is owned by the same two men who run Future Technology, records show.
Those execs, Tamer Sevintuna and Jon Krohe, never disclosed their ownership stake in the Turkish company, although city rules require them to list all companies they own or control.
Condon's probe has been underway for more than year.
It first came to light last month, when lawyers for Sevintuna and Krohe persuaded a Manhattan judge to quash subpoenas for the men to be questioned.
Supreme Court Justice Barbara Jaffe labeled the probe a "fishing expedition." Condon's office has appealed.
In an affidavit, Condon deputy Gerald Conroy said the probe centers on possible self-dealing and inflated billings through the use of multiple subcontractors who supplied consultants to one another.
Investigators also want to know if FTA's overseas workers, who had daily access to the school system's computer network, were properly vetted.
FTA has received nearly $100 million in DOE contracts since 2005. From the 10th floor of a DOE building on Court St. in Brooklyn, scores of FTA consultants upgrade systems that track records for vendors, school employees and students.
The firm bills up to $300,000 a year for each consultant. Probers say many of those workers were supplied to FTA by a handful of middleman subcontractors in the U.S. and abroad.
"Our contract prohibits subcontracting without DOE permission, and we never gave FTA permission," DOE spokeswoman Marge Feinberg said.
FTA lawyer Jim Walden denied his clients acted improperly.
"These companies such as Krono [the Turkish firm] are not subcontractors, but rather an employment agency [that] provided temporary consultants," Walden said in a written response to questions from the Daily News.
DOE officials who supervised FTA are well aware that some consultants worked in Turkey and India, Walden said, largely because of the shortage of qualified programmers in the U.S.
Walden accused Condon's office of "harassing" a minority-owned company - Sevintuna is a Turkish national - that provides quality service at a low cost.
Another firm FTA relied on for programmers was Mera Consulting LLC of Jacksonville, Fla., which charged $14 million over a two-year period for workers it provided.
Records show Mera was established in 2008. Its sole owner was Jon Krohe - one of FTA's two executives. Mera listed its headquarters as a mail drop in the same Jacksonville UPS store where FTA was headquartered. Mera stationery listed the same phone and fax number as FTA.
Despite the firms' close connection, Krohe did not include Mera on the list of companies he owned in financial disclosure forms filed with the city in 2009.
Probers questioned him about Mera in May 2010, Conroy's affidavit says. Krohe dissolved Mera two weeks later, then amended his financial disclosure form to include his ownership stake in Mera.
"Mera was dissolved to remove any possible suggestion that it was being used to game DOE," Walden said.
As for his clients' connection to the Turkish company, Walden said: "No FTA principal has any such ownership interest" in Krono Bilgisayar.
The company's registration records in Turkey contradict that assertion. The News obtained a copy of the legal announcement that Krono published in the June 26, 2007, Turkish Trade Registry and had it translated.
It says Sevintuna and Krohe established Krono Bilgisayar in Ankara on June 21, 2007. Sevintuna owned 60% of the shares and Krohe the other 40%.
A second notice in the Turkish Trade Registry listed Krohe and Sevintuna as the firm's owners as recently as September 2010.
Sevintuna and Krohe failed to disclose their ownership interests in Krono Bilgisayar when they filed city financial disclosure forms in 2009 and last year.
Probers say lawyers for Krono in Turkey refused to supply them time sheets to verify work done for the school system, claiming Turkish law prohibits it.
Walden told probers he could "request" the Turkish firm to cooperate, but could not force it to do so.
In other words, Sevintuna and Krohe claim they have no power to get the Turkish company they own to explain where all that money the school system paid for overseas consultants ended up.
Keep digging into this mess and let's see what more there is.
I heard there are contractors working for DOE and DIIT charging over $200 per hour. In addition prior to FTA for the same work previous contractor was charging a rate range from $300 to $150. The hourly price that they are charging sounds very reasonable compared to others. I do think Gonzalez should further investigate other contractors and the rates that they are charging to DOE.
ReplyDelete$300 to $150 is reasonable?
ReplyDeleteWhich world do you stay in, man?
Software development firms charge $80-$100 an hour for developers and project managers for folks in the US and $25-$40 an hour for resources based in India.
At this rate, FTA was really running a racket and decision makers at DoE were either blind-sided or were hand in glove with FTA!