Sunday, December 26, 2010

Queens Chronicle Editorial - Bloomberg Not Credible on the CityTime Fiasco

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I wholeheartedly agree with the Chronicle...hopefully this will be Bloomberg's downfall....

Mayor Bloomberg’s blase attitude about the CityTime scandal and his claim that he had no indication of wrongdoing until last week’s federal indictments are insulting to every New Yorker. The idea that he didn’t know there was big trouble surrounding the payroll-modernizing project is laughable for a number of reasons.

First of all, the cost skyrocketed from a little under $70 million when the initiative was launched in 1998 under former Mayor Rudy Giuliani to nearly $750 million this year. Inflation is one thing, but a tenfold jump in the cost of a city contract is a strong indicator that a criminal probe is warranted. Especially when the chief executive responsible for the project is known above all as a financial whiz who made his fortune in information technology.

Bloomberg did not become a billionaire by letting cash fly out the window, and his mayoralty has been marked by a businessman’s attention to the bottom line. Except in the case of CityTime. On that he’s been utterly out to lunch.

Another top city official wasn’t, however, and Bloomberg would have been wise to pay more attention to him. Comptroller John Liu warned the mayor back in March that the project was “hemorrhaging” money and had “ballooned out of control.” It was Liu who pegged the cost through this year at $738 million — more than $100 million above where it was estimated in 2009.

Also, the Daily News has been writing about the cost overruns, conflicts of interest and double dipping among those involved with the project for more than a year.

All of those factors — or really any single one of them — should have set the mayor’s alarm bells ringing long before last week’s arrests.

Variously charged with felony conspiracy to commit wire fraud and money laundering are four of the contractors responsible for the CityTime mess and two close relatives of one of them, Mark Mazer. While innocent until proven guilty, they have a lot of explaining to do and are likely to face significant jail time.

The main defendants — Mazer, Dmitry Aronshtein, Victor Natanzon and Scott Berger — are charged with misappropriating $80 million of the taxpayers’ money. Mazer’s wife and mother are charged with helping to launder the proceeds. The feds have seized $850,000 in cash the defendants allegedly kept in safe deposit boxes.

The prosecutions are in the feds’ hands. But that doesn’t mean the city has no role to play. The City Council should immediately hold hearings to probe the non-criminal aspects of the case, and Bloomberg should be the first person to be called. New Yorkers have a right to hear him say, under oath, what he knew and when he knew it.

Other prime witnesses would be Liu, who can testify about his office’s findings and how they went largely unheeded by the administration, and Joel Bondy, head of the Office of Payroll Administration since 2004, who was finally suspended over the scandal last week.

For the last several years, as the CityTime fiasco was developing, the mayor has been cutting the budgets of every city agency to make ends meet. Teacher layoffs, library closures, reductions in the ranks of the NYPD and FDNY — they’ve all been justified on the basis that the money just isn’t there. But maybe we really didn’t need to close those libraries, let those teachers go or reduce the uniformed services. That’s the even deeper scandal here.

Whether the city could ever recover the lost money is a good question. What other funds are being lost on wasteful projects that haven’t made news yet is another one.