Perdido 03

Perdido 03

Thursday, December 23, 2010

CityTime Kickbacks

The NY Post details more criminal activity in the CityTime case and looks more and more damaging to Bloomberg:

The firm hired to do oversight on The firm hired to do oversig embattled CityTime project -- in which four consultants have been charged with embezzling $80 million of taxpayer funds -- inked a suspicious deal with a subcontractor that included a 20 percent "kickback" for its own coffers, officials said.

Amazingly, the city allowed the oversight consultant firm, Spherion, to select its own watchdog, The Post has learned.

And the city's Office of Payroll Administration -- whose executive director Joel Bondy was suspended without pay last week as part of the mushrooming CityTime scandal -- signed off on the deal that brought in an extra $22,000 for Spherion, according to a July 2005 letter obtained by The Post.

"We can now add kickbacks to the list of criminal offenses that appear to have been commonplace in connection to IT contracts within OPA, despite numerous warnings," said Councilwoman Letitia James (D-Brooklyn), an early critic of major cost overruns in the CityTime project.

Spherion was in charge of "the day-to-day quality-assurance coordinator" for the project, according to one city official.

It in turn selected Gartner, a consultant firm, to do an overview of the $722 million project.

Although both did oversight, the city official insisted they did separate jobs with Gartner providing "more of an overview assessment."

Part of Gartner's role was to make sure that Spherion was doing a good job, a source close to the investigation said. A City Hall source, however, disputes that claim.

In the $132,000 contract -- approved by the OPA -- Spherion got 20 percent of Gartner's fee.

"The contract agreement that Spherion is in the course of establishing with Gartner . . . will be inclusive of any travel-related expenses incurred by Gartner. Spherion will mark up the Gartner fixed price by 20 percent to reflect administrative-overhead costs," according to the letter now-suspended OPA head Bondy wrote to Spherion five years ago.

Four consultants working on the long-overdue project -- the cost of which jumped from $63 million in 1998 to an estimated $722 million -- were arrested last week and charged with stealing more than $80 million.

Cheryl Hilpert, a spokeswoman for Spherion, defended the company, but declined to comment on specific questions about the kickback.

"[Spherion] has been cooperating with the US attorney's investigation regarding the alleged fraud within New York City's Office of Payroll Administration's CityTime program, and intends to continue doing so," she said.

"To date, we have no reason to believe that [Spherion] is itself a target of the investigation and will make any additional comments as appropriate," she said.

Both the city and state comptrollers continue to probe contracts involving firms with a role in CityTime.

The last sentence is quite damning for Bloomberg.

The more investigators look into the CityTime mess, the more criminal activity they find.

How much do you want to bet that the more they look into other city business done by these same companies, the more crookery they find as well?

Bloomberg thinks he's running for president in 2012.

But CityTime is going to be one helluva of an albatross.

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