CityTime Fraud Couldn't Have Happened Without Help From Inside City Hall

Al Jazeera has a really good video report on the CityTime scandal:



This is the biggest theft in NYC history - the crooks stole $600 million dollars.

Mayor Bloomberg shrugs over it all, says the money just "slipped through the cracks," and anyway, the project is working now and stopping future fraud by city employees sneaking off early from work, so Bloomberg is thrilled with the results.

And it only cost over $700 million dollars, $600 million of which was stolen!

Amazing.

Just amazing.

And the sad thing is, Bloomberg is getting away with this.

This scandal should tarnish his reputation the way Tea Pot Dome tarnished Harding.

And like the Tea Pot Dome scandal was just one scandal among many in the Harding administration, this one is just the tip of the iceberg for Bloomberg and his outside consultants and tech contracts.

The more they look into the outside consultant contracts handed out by the Bloomberg administration, the more fraud they will uncover.

At the NYCDOE, there are at least two other outside consultant/tech scandals (the Willard Lanham scandal and the Judith Hederman scandal.)

Yet somehow Bloomberg moves on, making believe he's some financial management genius.

Financial genius, my ass.

Warning Harding is more like it.

Bloomberg ought to be forced to resign in disgrace.

Instead, he's still governing like he's got a four million vote mandate.

He's slashing the budget and cutting programs for seniors and laying off thousands of teachers to save hundreds of millions of dollars while the crooked consultants rob the city blind.

It's time to go, old man.

Time to go.

Bermuda is calling.

CityTime Consultant Arrested For Kickbacks, Fraud And Money Laundering

The Bloomberg Consultant Scandals (and I think we can now label them such - there are enough of them) just keep coming and coming.

Another arrest was announced this morning:

A former consulting company executive was charged on Friday with receiving at least $5 million in illegal kickbacks in connection with his work as a project manager on the CityTime automated payroll project, people briefed on the matter said.

The consultant, Gerard Denault, a former executive of Science Applications International Corporation, was also charged with wire fraud conspiracy and money laundering in an indictment unsealed in United States District Court in Manhattan.

Mr. Denault was arrested in Danbury, Conn., on Thursday, and he is expected to be presented in federal court in Manhattan on Friday.
He was charged as a result of an ongoing investigation by the city’s Department of Investigation and the United States attorney’s office in Manhattan.

“It is deeply disturbing that while he was hired to help cut costs and save money, in reality, Gerard Denault was allegedly ripping city taxpayers off to to pad his own pockets,” said Preet Bharara, the United States attorney in Manhattan.

Mr. Denault’s lawyer, Barry A. Bohrer, did not immediately return a phone message or an e-mail on Friday morning.

On Wednesday, Science Applications International said it had fired Mr. Denault for misrepresenting the number of hours he had worked and promised to return to the city $2.4 million, the amount the company had billed for Mr. Denault.

The complaint filed in federal court said that for much of the last decade, the Bloomberg administration has been developing the project, meant to modernize the payroll system for city employees, and working to implement it.

Originally budgeted for $63 million, the CityTime project costs have ballooned to roughly $700 million, with additional expenditures still expected to complete the program.

Mr. Denault’s arrest brings to seven the number of people who have been charged by prosecutors in the CityTime case. One of those charged pleaded guilty in February is cooperating with investigators.

Mr. Bahara said that the investigation was continuing and that “there are more individuals yet to be held accountable.

There are more individuals yet to be held accountable in this mess?

Great - how about Bloomberg?

He is the financial and managerial genius who has overseen this mess.

Accountable Talk points out that Denault was charged with steering $450 million in city money to various subcontractors who paid him at least $5 million in kickbacks for the contracts.

Think about that dollar number for a minute - $450 million.

The mayor is going to lay off 4,278 teachers to save $300 million.

Denault steered $450 million in city money to subcontractors in a project that went $700 million overbudget in order to receive $5 million in kickbacks.

That's an awful lot of money that could have been used to pay teachers and lower class sizes that was doled out by a guy Bloomberg hired who just got arrested for taking kickbacks on city contracts.

When the mayor trots out the layoff card again in a couple of weeks, he must be called to account for this scandal. $700 million over budget, $80 million stolen by four consultants involved in the project, another $5 million in kickbacks taken by another consultant involved in the project and the investigation is still ongoing and the US attorney says more people will be held accountable for this.

So far, one person has managed to skirt accountability for this mess, and that is the Accountability Mayor himself, Bloomberg.

But no longer.

There have been too many consultant scandals, too much money stolen, too many people arrested - both consultants hired by the city and city employees who were supposed to be conducting oversight of these consultants - for Bloomberg to avoid scrutiny and accountability.

And keep in mind - this is just the tip of the iceberg.

The US attorney says more arrests are coming in the CityTime scandal, the Judith Hederman case at the DOE looks like it is going to widen and culminate in some arrests, Comptroller John Liu is investing many other city contracts, especially contracts handed out by the DOE, that look fishy (including anything involving two vendors, IBM and Verizon, who helped another DOE consultant, Willard Lanham, hide $3.6 million in stolen city money.)

The Bloomberg Consultant Scandals are just growing and growing.

Ed Koch had Donald Manes and Mario Biagi and Stanley Friedman and the Parking Bureau scandal to deal with in his third term.

Bloomberg is going to have to deal with the fallout from the Bloomberg Consultant Scandals.

And the amount of money that has disappeared in criminal activity during the Bloomberg years is adding up and making the money stolen in the Koch scandals of the 80's look like peanuts.

So have it, Mr. Mayor. Tell us how fiscally prudent you must be by laying off 4,278 teachers so you can save $300 million in teacher salaries.

Then we can ask you, point blank and on camera, how have you allowed all this money to be stolen by city consultants on your watch and how have you allowed all these city employees at the DOE and elsewhere to engage in so much criminal activity.

I mean, you are the Accountability Mayor, after all.

Misconduct, Crimes and Conflict of Interest At The DOE

Juan Gonzalez exposes more into the Judith Hederman/DOE/outside consultant scandal. Investigators are now aiming at not only the outside consultants who marked up bills to the DOE by as much as 600% but also "DOE officials" connected with the company:

A top Department of Education official who quit after admitting to an affair with a consultant she supervised passed him inside information - and approved a $60,000-a-year raise for him, records show.

Judith Hederman, the $168,000-a-year executive director of the DOE's division of financial operations, resigned May 4.

That was day the Daily News revealed that an unidentified DOE official told the office of Special Commissioner on Investigation Richard Condon she had a "personal relationship" with a top executive of Future Technology Associates, a Florida-based firm she supervised.

DOE officials later confirmed Hederman was the unnamed official.

FTA, which has received nearly $100 million in city contracts, mostly to service the DOE computer system, has been under investigation for more than a year.

In recent weeks, city Controller John Liu has launched an audit of the firm's work.

Condon's probers believe FTA's two owners, Tamer Sevintuna and Jonathan Krohe, used a web of secretly owned subsidiaries in the U.S. and Turkey to supply programmers to themselves.

The two then "profited from enormous markups" on those consultants to the DOE, according to papers Condon's deputies filed in Manhattan Supreme Court last week.

Some programmers employed in Turkey by a Sevintuna and Krohe subsidiary, for example, were paid only $3,000 a month, but FTA billed the DOE more than $22,000 a month for their work.

No criminal charges have been filed against the firm or its owners.

Condon's office has had to reveal details of the ongoing probe in a civil court case, where Sevintuna and Krohe tried to quash a subpoena for them to be questioned under oath.

The latest court papers, filed by Condon's deputy Gerald Conroy last Friday, claim SCI's probe is "focused on misconduct, crimes and conflict of interest ... not only by persons affiliated with FTA, but by DOE officials."

"On Jan. 20, 2008, the DOE official used proprietary DOE information to warn the person [in FTA] with whom the official was involved about a DOE deputy chancellor's inquiry into FTA's increased expenditures charged to the DOE," the papers say.

Two DOE sources familiar with FTA said Hederman's relationship was with Krohe, who owns 40% of the company. Sevintuna owns the other 60%.

Neither Krohe nor Hederman, whose husband also works for the DOE, returned calls for comment.

Krohe's lawyer Gordon Mehler said he has advised his client against any interviews.

In court papers Mehler filed last week, he withdrew any objections to his client speaking to Condon's investigators.

Krohe and Sevintuna have also received hefty individual salaries from the DOE for years.

Under a previous no-bid contract that began in 2006, Krohe was paid $245,000 annually.

In September 2009, the DOE's Panel for Educational Policy approved a new $43 million contract for FTA.

Krohe's salary in the new contract jumped to $306,250 - a $61,000 hike, DOE records show.

Hederman was the official who submitted that contract for approval and praised FTA's performance.

"One of the many unanswered questions about the [personal] relationship is whether it affected the DOE's purported pleasure with FTA performance," Conroy wrote.

So far, Hederman seems to be the only DOE official connected to the case and under investigation.

But the court papers filed last Friday say the Special Commissioner of Investigation's probe is "focused on misconduct, crimes and conflict of interest ... not only by persons affiliated with FTA, but by DOE officials" which seems to indicate there may be at least one additional DOE official involved.