The city awarded a $175 million contract to Verizon, just nine days before the communications giant was cited by special schools investigator Richard Condon for "facilitating" a $3.6 million fraud by a technology consultant.
City officials insist the timing was coincidental, noting the two-year deal for phone and data services approved on April 19 was actually retroactive to Jan. 1.
On April 28, Condon issued a scathing report that accused both Verizon and IBM of playing roles in an alleged six-year swindle by consultant Willard Lanham, who was accused of shielding his thievery through layers of contractors and subcontractors in a project to wire public schools for the Internet.
Condon charged that Lanham was able to pull off his scheme by hiding the consultants as workers for Verizon and IBM, which billed the Education Department for their services at marked-up rates.
Nick Sbordone, spokesman for the Department of Information Technology and Telecommunications, defended the deal with Verizon.
"We will evaluate Verizon proposals in the future with knowledge that it was mentioned in the special investigator's report, but not implicated in the criminal case," he said.