A top Department of Education official who supervised a major computer contractor is under investigation for "potential corruption and conflict of interest" with an owner of the firm.
In an April 14 interview under oath with probers for Special Commissioner on Investigation Richard Condon, the school official "denied having a personal relationship" with one of the two principal officers of Future Technology Associates (FTA), a Florida-based consulting firm with a $43 million contract to service the schools' computer system.
Four days after that interview, the DOE official's lawyer called Condon's investigators and retracted the original denial of a personal relationship, an affidavit filed by Condon deputy Gerald Conroy says.
Conroy's affidavit identifies the school official only as a "high-level" executive with "oversight" over the FTA contract.
Condon's office filed the affidavit to try to convince Supreme Court Justice Barbara Jaffe to reconsider her recent decision to quash an SCI subpoena of FTA's co-owners, Tamer Sevintuna and Jonathan Krohe.
Two months ago, Jaffe denied the subpoenas and labeled Condon's investigation a "fishing expedition."
Conroy's new affidavit claims there are new "material facts" Jaffe should take into account. In addition to the retracted statement, Conroy points to an April 13 Daily News column.
That article revealed that Sevintuna and Krohe never told the DOE they owned a Turkish company, Krono Bilgisayar, that received more than $3.6 million between 2006 and 2009 for programmers who worked from Turkey to service DOE computers.
School system spokeswoman Marge Feinberg has said FTA had no authorization, as it was required to have, before it could subcontract its work.
As a result of The News' revelations, SCI has expanded its year-long probe of FTA and wants to know if Sevintuna and Krohe "are using a hidden ownership of Krono to profit egregiously at the expense of DOE," the Conroy affidavit said.
Just how huge those profits were is reflected in Turkish social security records The News obtained this week.
The records show one of the Turkish workers, Cem Arpaci, was paid $3,370 for the month of March 2011 by Krono Bilgisayar. Back here in New York, FTA billed the school system $22,400 for Arpaci's labor.
All told, at least six workers, including Arpaci, were on the DOE payroll in March as full-time consultants.
The wages Krono paid to all six totaled just $16,800, the Turkish records show.
Yet FTA got $110,400 from the DOE for those same six consultants.
That's a markup of more than 600%. The owners of the Turkish firm are receiving $93,600 more than the labor cost of those six workers each month!
On top of that, Krohe and Sevintuna each received more than $300,000 annually from the DOE as senior managers of the FTA project.
Lawyers for the two men did not respond to requests for comment.
Feinberg was also mum.
"We cannot comment on matters relating to FTA until the ... investigation is completed," the DOE spokeswoman said.
The burgeoning troubles with FTA comes on the heels of federal arrests connected to two other computer consulting scandals in the Bloomberg administration.
In December, four top consultants on the CityTime payroll project were charged with stealing more than $80 million through inflated payments and dummy companies.
Last week, DOE consultant Willard (Ross) Lanham was charged with bilking taxpayers of $3.6 million in another contract.
I don't quite understand why a judge would try and quash this investigation as a "fishing expedition" when it seems very likely that a top DOE official lied under oath about a relationship he had with an owner of a computer firm he was supposed to be supervising.
Or when it seems likely that this computer company that is doing consulting work for the DOE is paying its employees thousands of dollars less than they are billing the DOE for that pay.
Actual pay to consultants - $16, 800. Pay billed to DOE - $110, 400. A 600% markup!
Yeah, there's something fishy going on here and it seems to be almost exactly the kind of thing former DOE computer consultant Williard Lanham was doing - overbilling the DOE for services not rendered, then hiding the overbilling with the help of either vendors or, in this case, perhaps a top DOE official.
That last part links this case to CityTime, the scandal that saw crooks stealing money from the city - $85 million, actual - with the help of the city payroll administration director who was supposed to be overseeing them.
Bloomberg is supposed to announce his budget's final numbers this week and get more concrete about teacher layoffs.
Again I ask, how can he get away with layoffs of teachers to save $300 million when the consultants he has hired are robbing the city blind, scandal after scandal is being unearthed that show how the consultants, the city vendors and some of the city officials who are supposed to be doing the oversight are in on the scams, and Bloomberg wants to ratchet up tech spending next year by $550 million even as he pursues layoffs to save money?