As Gotham Gazette noted today:
The Times is reporting that a former Department of Education consultant has been charged with stealing $3.6 million from the city. Federal prosecutors say Willard Lanham persuaded subcontractors to overbill the city for their work and then kept the difference for himself.
Fernanda Santos writes, “Verizon and I.B.M., the largest of the vendors involved in the projects, played a role in the scheme and profited from it, according to the city’s special commissioner of investigation, Richard J. Condon.” Verizon said it would “return any inappropriate profits.”
Lanham, who reportedly already made $200,000 a year, supposedly used the money to buy fancy cars and Long Island real estate. He has denied any wrongdoing. The crime allegedly occurred between 2002 and 2008.
The projects involved were supposed to provide internet access in city schools. The case — assuming the charges are true — involves a number of issues that continue to prove extremely nettlesome for the Bloomberg administration.
First, of course, is its ongoing problem with tech contracts: most notably, the City Time computerized payroll system and the efforts to upgrade the 911 announced he would conduct audits of two Department of Education tech projects: the Achievement Reporting and Innovation System, popularly known as ARIS, which tracks student performance, and the Innovation Zone or iZone, the department’s initiative to reshape city schools using on line learning and other technology, among other techniques.
In another echo of the Lanham case, the concerns about ARIS also involve IBM. In the latest case, Condon has said, IBM shifted consultant among subs-contractors in an effort to hide Lanham’s scam from the education department.
As for ARIS, the Department of Education hired IBM to develop the system to track student achievement in 2007, spending some $80 million on it. Despite the investment, many schools don’t like it and have opted to buy another system. The city, however, is sticking with ARIS and plans on testing a new version of it, Gotham Schools has reported.
In the meantime, IBM hired a subcontractor, Wireless Generation, to develop the ARIS system. Wireless Generation continue to work on ARIS> Now, though, it is owned by News Corp. News Corp. now employs Joel Klein, who championed ARIS’ development during his tenure as schools chancellor. Klein, of course, also was chancellor during the time that Lanham allegedly was ripping off the city.
Despite Klein’s departure, the department’s penchant for technology remains. Facing spending cutbacks in other areas, this department’s capital budget seeks to boost spending for technology in general — wireless, hardware, cables — and for the iZone, the department’s initiative to reshape city schools using on line learning and other technology, among other techniques
Liu also has launched an audit of the Zone. Some critics have questioned whether, during a time of proposed layoffs and cutbacks, the city should be moving ahead on iZone when, they say, little evidence exists that such tech initiative actually help children learn.
The disclosure today is likely to fuel doubts about any increased tech spending by the department.
Less tech spending, no layoffs, but more purchasing of handcuffs - because the more investigators look into these contracts, the contractors themselves and just how the money is being doled out and what it is being used for, the more crookedness that is being revealed.
No one has seriously looked at Klein and Wireless Generation yet, but just how did the former schools chancellor get to sign all these contracts with Wireless Generation, then get to run the online K-12 for-profit education division of News Corp. after Rupert Murdoch bought the company?
Holy cow, that deal sounds so fishy on the face of it that it begs investigation.
And so does Klein's role in all of this.
Leaving aside the temerity of the DOE and the mayor to promote all this technology spending in the same year that there are going to be teacher lay offs for the first time in 30+ years (that I will deal with tomorrow in another post), the Wireless Generation contract CANNOT be allowed to stand as is without investigation.