Perdido 03

Perdido 03

Friday, May 27, 2011

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.


  1. Coming Soon: CSI:DOE

  2. From your mouth to the reporters who treat Bloomberg with kid gloves. You are so right and I hope someone holds him responsible on camera. I can just see his implosion it will be second to his attack awhile back against the man in the wheelchair who had his cell phone I think go off and then mount Bloomberg erupted. Lets hope.