It always seems the projects that are supposed to save the city money, or increase city employee productivity are the ones that end up in major scandal.
And these corruption scandals always seem to happen to NYC mayors in their third term.
This scam, known as CityTime — was supposed to save money by consolidating and automating hours clocked by city workers — but just the opposite happened. Skyrocketing cost overruns went from an initially budget in the range of $63 million when it was launched in 1998.
The cost of the project is now more than $600 million, and counting.
City Councilwoman Letitia James who held hearings on the system last year, put it very simple, "$80 million just disappeared and no one from the administration raised a question."
Comptroller John Liu said, "It doesn't take a rocket scientist to believe there's a problem when a contract is years late and over budget by a factor of 10."
The project to replace paper timesheets with hand scanners for city workers was supposed to cost $68 million when proposed in 1998, but is still only one-third finished, and the scandal only really came to light with federal indictments in the case. It’s Liu’s audit this year that highlighted some of the issues that eventually surfaced in the federal indictment.
Six people face federal fraud and money laundering charges.
That brings me to an interesting point.
In general It’s easy to attack Municipal unions, with critics often pointing to a bloated city workforce. But sometimes the city unions are exactly on point.
Unions like DC 37 for years have been telling anyone that would listen to slow down on privatizing jobs. To stop pushing forward with outside contractors. In this case, outside contractors looking at the work of outside contractors. The scheme involved phony timesheets, payments to dummy shell companies and money laundering through banks.
City Councilwoman Leticia James proposes that the city modernize its payroll system using in-house employees, instead of outside contractors. "The reality is that we should look at all of these private consultant contracts in the city of New York. We should not privatize municipal work, particularly at these challenging times. We should better use municipal workers and employees and avert all of the layoffs," she said.
Speaking on his weekly radio show on WOR on Friday, the mayor said the city should have detected the fraud earlier. But he added that the CityTime project involved many layers of contracts, and was difficult to police. Still, he expects the city to get the money back. "Rose Gill Hearn, our commissioner of the Department of Investigations, thinks that we'll recover virtually all the money," he said. But it certainly doesn't recover our reputation."
And the administration’s reputation is taking a further hit. Now it has surfaced someone blew the whistle several years ago when the former head of the Office of Payroll Administration wrote a letter in 2003 criticizing the skyrocketing costs and nonexistent deliverables in the CityTime project.
Mr. Bloomberg also said the other day: “We just have zero tolerance, absolutely zero tolerance, for any kind of corruption whatsoever. And going forward, we’ve taken some steps to ensure this doesn’t happen again.”
A Deputy Mayor will now look at some of these types of contracts, but we will be hearing about CityTime for a while.
The latest information. State Comptroller Tom DiNapoli has rejected a $118 million transit contract with Science Applications International Corporation, the designer of the CityTime payroll system.