New & Notes from NYS Senator Joe Addabbo - 15th District

ADDABBO CO-SPONSORS BILL TO HELP SMALL BUSINESSES GET VENTURE CAPITAL FUNDING

NYS Senator Joseph P. Addabbo, Jr., (D-Queens) is pleased to announce that he is a co-sponsor of legislation (S.5587) introduced in the Senate by Senator James Alesi (R-Rochester) that would amend the state’s tax law to authorize the state to license six certified capital companies to raise $150 million in private venture capital from insurance companies in order to assist New York businesses that require funds not available from traditional commercial banks through all stages of development: pre-startup, start-up, expansion, or survival. In exchange for investing in qualified businesses, the insurance companies would get premium tax credits, with such issuance to be delayed four years. While the economic benefits of the program begin almost immediately, the delayed tax credits would have no fiscal impact to New York State until 2015.

In order to qualify for the tax credits, each certified capital company mustsatisfy a number of requirements in its investment portfolio, including:

• Two-thirds of its investment of certified capital must go towards qualified businesses located in under-served areas.
• Ten percent of its investment must be directed towards qualified seed funds, certified as such by the Superintendent of Financial Services.
• Fifty percent of its investments must go towards businesses focused on emerging technology products and services.
• No more than $15 million can be invested towards one individual company.

In addition, a certified capital company under CAPCO-6 would be required to return 15 percent of its net profits on qualified investments to the Department of Financial Services. This legislation also adds to the reporting requirements already present in previous CAPCO programs to ensure compliance with the requirements set forth above.

New York State last renewed its CAPCO program in 2005. The NY CAPCO was created by the Assembly over a decade ago to utilize a premium tax credit incentive to increase investment in venture capital funds focused exclusively on New York businesses. New York insurance companies can earn tax credits by making investments in small companies that have difficulty accessing traditional funding sources. Since 1998, five CAPCO programs have been certified. Through these five programs, $400 million of private capital has been raised, and the investment from these funds has created or retained over 2,000 jobs and will generate $412 million in tax revenue by 2016. Says Addabbo, “It’s a win-win for both small business owners and investors. Our current economic climate makes getting risk capital for small businesses extremely challenging. As elected officials, we must make every effort to help our small businesses.”

The bill has been sent for review to the Senate’s Committee on Investigations and Government Operations. After passage and signature by the Governor, the bill would take effect immediately.

ADDABBO SUPPORTS BILL THAT WOULD MAKE HOME INVASION ROBBERY NEW CRIMINAL OFFENSES

NYS Senator Joseph P. Addabbo, Jr., announced that the Senate has passed a bill (S.3205) that would amend the penal law in order to establish the new criminal offenses of home invasion robbery, which takes place when a robbery occurs, and offenders threaten physical force.

The bill elevates the crime of robbery if the robbery occurs in someone's home, and

1) a person is guilty of home invasion robbery in the 2nd degree (a class C felony) and is aided by another perpetrator; and

2) a person is guilty of home invasion robbery in the 1st degree (a class B felony) when he or she, in the course of such a robbery: a) causes physical injury upon an occupant of the home; b) is armed with a deadly weapon; c) uses or threatens to use a dangerous instrument; or d) displays or appears to display an actual firearm capable of producing death or serious injury.

Explains Addabbo, "Incidents of home invasion robbery have been increasing in New York State and could happen in any community. They are not to be mistaken for burglaries, which usually occur when the homeowner is away. Home invasion robberies feature confronting homeowners as key elements of the perpetrator’s attacks, directly with force, false pretense or impersonation, then restrain the victims to steal the home's contents. This kind of crime needs an increased penalty and enforcement to assist in ensuring the safety of our residents."

This bill is currently being reviewed in the Codes Committee.

ADDABBO STATEMENT ON ETHICS REFORM BILL: THE PUBLIC INTEGRITY REFORM ACT OF 2011

NYS Senator Joseph Addabbo, Jr., (D-Queens) released the following statement on the ethics reform bill passed yesterday:

The Public Integrity Reform Act of 2011 is a step in the right direction for ethics reform in Albany and towards restoring faith and public trust in our government. After advocating for ethics and campaign reform ever since I was elected to the Senate, I believe this is a good initial bill, but I know we can do more in the state legislature. Since the ethics issue is one that has traditionally plagued our state government, I will continue to promote the need for improved campaign finance reform and independent redistricting to create a more transparent and equitable government for the people of this state.

This ethics reform bill only allows for penalizing the state pensions for future elected officials convicted of crimes related to their government role. This bill should have included current elected officials in this category.

Did the desperate need for ethics reform set the standard so low that any bill, no matter how mediocre, would have been an improvement? Only time will tell with the implementation of the this Public Integrity Reform Act of 2011.

NYC Comptroller John C. Liu's Remarks on City Time Scandal

Below are remarks by New York City Comptroller John C. Liu at a news conference on Wednesday, May 25, 4:30 p.m. regarding the CityTime project:

“Earlier this afternoon, my office was provided with a letter written to the Executive Director of the Financial Information Services Agency (FISA) by Science Applications International Corporation (SAIC), the prime contractor on the CityTime project. We were informed that SAIC had terminated their senior project manager who led the CityTime project.

“The name of that employee is Gerard Denault.

“SAIC has determined that Mr. Denault violated SAIC’s policies and standards with respect to timekeeping practices while working on CityTime. He routinely billed hours to the CityTime project that he did not in fact work.

“By their own admission, this latest development now implicates, for the first time in this scandal, SAIC. The very company entrusted by our City to build a timekeeping system for NYC employees has grossly mismanaged their own time keeping, and in the process over charged the city for sums of money – still to be determined.

“SAIC now says they will now refund $2,470,522 to the city coffers for the time Mr. Denault billed to hard working NYC taxpayers.

“A few moments ago I sent a letter to the Mayor because I believe we need to work together.

“I am asking him to join me in calling on the Department of Investigation along with all other relevant authorities to conduct a comprehensive review of other possible violations by SAIC, and I am proposing that the City withhold any future payments to SAIC pending the outcome of the investigations.

“This is a sad day for the New York City taxpayer.

“With the proposed budget cuts looming, we at least need to tightly manage expensive outside consultants.

“The public’s trust in government must be bolstered, and I am committed to working with the Mayor to do just that.”

Below is the full text of the letter sent to Mayor Bloomberg on May 25, 2011.

---

May 25, 2011

Honorable Michael R. Bloomberg

Mayor

City Hall

New York, NY 10007

Re: Science Application International Corporation (SAIC)

Dear Mayor Bloomberg:

Today, we were informed by SAIC that they have terminated their project manager for CityTime. SAIC cited the project manager’s violation of SAIC’s policies and standards, specifically with regard to his time billed to the City of New York. Because SAIC cannot accurately calculate the amount that should have been billed to the City, SAIC will reimburse the City for this individual’s billed services. This repayment amounts to $2,470,522.

To date, the alleged fraud relating to CityTime has only involved subcontractors. This latest development now implicates the prime contractor and compels a comprehensive review of SAIC’s billings to the City, in particular, SAIC employees whose time was billed to the CityTime project.

I am directing my representative on the OPA board to introduce a resolution on the points below, and ask that your representative support the resolution:

• The Department of Investigation, along with all other relevant authorities, conduct a comprehensive review of other possible timekeeping violations; and
• The City withholds any outstanding payments to SAIC pending the outcome of the investigations.

I believe the above actions are necessary and as always, I am available to discuss any of these issues with you. Thank you.

Sincerely,

John C. Liu

View letter from SAIC to FISA: http://www.comptroller.nyc.gov/press/pdfs/SAIC-FISA-5-2011.pdf

Statement by Public Advocate de Blasio on Governor Cuomo's Bill to Bar Convicted Felons from Receiving Public Pensions

“No official who has broken public’s trust should draw another dime from taxpayers. The State Legislature should demonstrate its commitment to reforming Albany’s culture of corruption by passing Governor Cuomo’s bill into law at once. I applaud the Governor for seizing this moment to send a clear message that the State of New York will no longer tolerate the abuse of public office.”

Comptroller Tom DiNapoli Statement on the Sentencing of Alan Hevesi

Today’s sentencing of Alan Hevesi is a welcome and just conclusion to a years-long saga. Mr. Hevesi betrayed the trust of all New Yorkers. His sentence is clear evidence that this type of criminal behavior will not be tolerated.

Since taking office, I have changed the way the pension fund does business so history cannot repeat itself. I have banned placement agents and pay-to-play practices, and I have increased transparency in pension fund transactions. But there is more that can be done.

The punishment for breaking the law while performing a public duty must include pension forfeiture and increased fines and sentencing. The pension forfeiture bill I proposed earlier this year would do just that. No public official who violates the public trust should be allowed to receive a taxpayer-funded pension. Passage of my bill would be a much-needed step in rebuilding the public’s confidence in its government.

Woman Attacked In Forest Park Speaks Out - by Mathewt Hampton Forest Hills, NY Patch

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On Friday, March 25, a Forest Hills woman was savagely attacked in Forest Park, by a man in a black mask. Now the victim is speaking out, in the hope that her attacker can be brought to justice, and other women won’t have to suffer the same fate.

The victim, Patricia, was jogging early in the morning when a man wearing a black ski mask grabbed her from behind and attempted to pull off her running tights.

The victim described her attacker as between five-foot-six and five-foot-ten, wearing a black mask, black jacket, dark shoes and dark pants.

“I was shocked and horrified, I couldn't believe it was happening,” the victim said. “I screamed, but he kept trying to cover my mouth.”

Patricia added that the only reason she was able to escape from her attacker is through a series of strong kicks to the groin she delivered while he wrestled with her on the ground.

Once she fought back, she said, the man backed off and disappeared into the large wooded area from which he had emerged.

The park, which is located almost entirely in the 102 Precinct, is a largely wooded area with plenty of places for would-be attackers to hide. Police said that since the attack, NYPD officers have worked with Parks department patrols to step up the presence in the area.

“I never thought I was an easy target,” Patricia said. “I’ve always felt pretty safe on my own, but not anymore.”

No arrest has been made in the incident.

If anyone has any information contact Crime Stoppers at (800) 577-TIPS (8477). The public can also submit tips by logging onto the Crime Stoppers website at WWW.NYPDCRIMESTOPPERS.COM or by texting tips to 274637 (CRIMES) then entering TIP577.

Senator Joe Addabbo Co-sponsors Bill to Require Hate Crimes Curriculum in All New York State Schools

Responding to last month’s gang-related murder in his district of a young man by five teens now charged with manslaughter, who also are being investigated by the NYPD for hate crimes, NYS Senator Joseph P. Addabbo, Jr.(D-Queens), a member of the Senate’s Education Committee, is co-sponsoring a bill (S.269), which would raise awareness about hate crimes through curriculum in the schools. Addabbo supported this bill in the Education Committee and the bill has been sent to the full Senate for a vote.  

The Hate Crimes Task Force is investigating last month’s murder as to whether the suspects shouted anti-gay slurs at the victim and whether he was chased and bludgeoned to death on a Woodhaven street because he was perceived to be gay.  

The proposed new law requires a course of instruction in the awareness of hate crimes in our schools, so that every child in New York State will become educated on the commission of hate crimes. Hate crimes mean offenses that are committed based upon the race, color, national origin, ancestry, gender, religion, religious practice, age, disability or sexual orientation of the victim. The instruction will include examples of symbols and objects associated with hate crimes and the events and historical significance surrounding such symbols and objects. Such a course will also focus on the moral aspects and legal implications of such offenses and promote attitudes of tolerance and acceptance.

The law requires the board of education, trustees, principal or other person in charge of every public, private and parochial school in New York State to arrange for giving such course of instruction in every school under its/his or her control to every pupil for a period of not less than 45 minutes in each month during which such school is in session. The law will take effect on the first of September following the date on which it becomes a law.  

Explains Addabbo, “This bill offers a valuable course to increase an understanding of the seriousness of hate crimes among all students in New York State.  It is important that our schools teach core values of tolerance, acceptance and knowledge to all children in order to prevent hate crimes.” He believes that students should be taught about the vile nature of hate crimes and that such instruction will directly combat negative language and stereotypes that are prevalent in today’s society. Addabbo is hopeful that this instruction will educate our youth about the implications and dire consequences of hate crimes, and will provide them with a better understanding of the differences in each person. 

Man Who Burned Girlfriend Sentenced to Prison: DA by Anna Gustafson - Queens Chronicle

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An Ozone Park man who pleaded guilty to brutally attacking his girlfriend with a hot iron and slicing her with a razor blade in the same room where their children slept was sentenced to 13 years in prison, according to Queens District Attorney Richard Brown.

Eric Persaud, 36, also made more than 400 phones calls from Rikers Island in an attempt to stop his 27-year-old girlfriend from testifying against him at trial, Brown said.

“His actions were both cruel and sadistic,” Brown said in a prepared statement.

Persaud’s attorney, Judah Maltz, said he had no comment on the sentence handed down by Queens Supreme Court Judge Gregory Lasak on March 16.

According to the charges, Persaud began an argument on April 30, 2009 with his live-in girlfriend, the mother of his two children, over her having called the police a week prior regarding an incident in which he broke her computer and smashed her home phone. During the argument, Persaud held a knife to the woman’s throat and told her if she called the police again he would kill her or their children, according to the charges.

He then led her into the bedroom and told her he would have to scar her for calling the police, Brown said.

Persaud proceeded to tell her to plug in an iron and burn her face with it, the DA said. When his girlfriend refused, Persaud told her he would burn her face and if she screamed and woke the children, who were sleeping in the bedroom, he would scald them too, according to the charges.

After being forced to kneel on the ground, Persaud forced a towel into her mouth and placed the iron on both cheeks three times and used a razor to slash her face twice, Brown said.

The woman was hospitalized for 11 days following the attack, the DA said.

Senator Joe Addabbo & Assemblyman Mike Miller's Speak Out on the Assault in Woodhaven Leading to Death of Teen

Senator Addabbo:”This Kind of Activity Should Not Happen in Woodhaven or Anywhere”

NYS Senator Joseph P. Addabbo, Jr. (D-Queens), released the following statement concerning the weekend’s deplorable criminal violence that occurred among youth gathered inside a Woodhaven abandoned house (within his Senate District 15):

My office staff and I are determined to work with law enforcement to address the issues related to this unacceptable violent crime. I also intend to work with the Department of Buildings and other government agencies to address the growing problem surrounding the rise of incidents involving illegal activity being conducted in abandoned houses. This kind of activity should not be able to occur in the good community of Woodhaven or anywhere.

Assemblyman Miller’s Statement on the Assault in Woodhaven

This weekend, the life of an innocent teenager was cut tragically short in a senseless hate crime. Though the victim was not a member of the LGBT community, several members of the party were, and they were targeted solely for that reason. Over the past several years in Queens, we have seen senseless attacks on the LGBT community from Jackson Heights to Woodhaven. It is a shame, it is unacceptable, and it needs to end now. My heart goes out to the victim and his loved ones. It is time we stand up against hate.

BREAKING NEWS: Ozone Park Shooting Sends One to Hospital; Cops by Anna Gustafson - Queens Chronicle -

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One man was sent to the hospital after a man opened fire on a car on Cross Bay Boulevard in Ozone Park, police said.

Three men were involved in a midday shooting Friday on a busy street packed with pedestrians, sending one elderly person to the hospital and leaving residents shaking, police said.

“I was right next to the man when he started shooting,” said a delivery woman who was unloading goods from her Little Debbie truck outside of C-Town at the intersection of Cross Bay Boulevard and Sutter Avenue when the shots rang out around 12 p.m. “I was so close I saw the smoke from the gun. I was just hoping he wouldn’t turn around and shoot me.”

The shooter, who was described as a man in his early 30s, fired five shots at a car by the intersection of Cross Bay and Sutter, according to the witness. The man in the car was reportedly not hurt, but an elderly man across the street was shot in the hand, police said.

The bystander was taken to Jamaica Hospital Medical Center, where he was in stable condition Friday afternoon, police said.

The shooter and the two men with him, also described as being in their 30s, fled the scene by foot on Sutter Avenue, the witness said. Police said they have not made any arrests.

“I heard one of the guys ask another guy, ‘Is that him? Is that him?’” said the Little Debbie employee, who did not want to give her name for fear of retaliation. “When he says yeah, the guy pulls out a revolver and starts shooting, right there in broad daylight on Cross Bay.”

Other residents who did not witness the shooting but heard about it said they felt nervous allowing their children to walk around the area.

“You think you’re safe when it’s the middle of the day and you’re in a busy place,” said Roberta, a mother of two who did not want to give her last name. “I just want to get my kids in the house and stay there.”

Man Arrested for Aggravated Harassment of Ackerman by Lori Gross - Bayside, NY Patch

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Man made 40 calls “of a rambling nature" to U.S. Reps office, also allegedly threatening law enforcement

A Long Island man was arrested on charges of Aggravated Harassment after allegedly making about 40 phone calls to the Bayside office Rep. Gary Ackerman, according to the Nassau County Police Department.

NCPD’s Special Investigations Detective Squad visited the home of James Guarnaccio, 55, in Hicksville on Thursday after the torrent of calls, allegedly made between Dec. 23 and Jan. 1.

The calls, according to NCPD were, “of a rambling nature and were not threats against the Congressman.”

During the visit, detectives told Guarnaccio to stop phoning Ackerman, or he would be arrested.

That evening through the morning, he made seven more calls to the Congressman’s office, making what NCPD describe as “threats against local and federal law enforcement.”

He was arrested on Friday, and taken to Nassau University Medical Center for evaluation, where he was arraigned at bedside on Saturday.

NYC's Computer-System Cash-Dump Disaster By Graham Rayman - Village Voice

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Photo-Illustration by Andrea Levy

In January 2009, a tantalizing and disturbing comment materialized on an Internet bulletin board about an expensive and controversial Bloomberg administration project to automate the city's payroll system, known as CityTime.


The anonymous author alleged that the project was hopelessly corrupt and out of control and had been for years. The writer, who claimed to have been employed on the project, went on to name three people he alleged were responsible for that corruption.


The commenter accused a consultant, Mark Mazer, of being "the most crooked person on the team," and said consultant Scott Berger was building a home in Florida at city expense.


"Mark Mazer and Scott had ONLY one main intent . . . to pocket the $/hr for themselves for as long as possible @ taxpayer expense," the commenter wrote. Referring to the former consultant later appointed to oversee the project, the commenter added, "The project in its 5th year was a failure and should have been canned, but Joel Bondy for some reason or another decided it must go on for another 5 yrs."


The comment went on to lay out in more or less clear terms exactly what was taking place in the CityTime project.


That posting appears to have disappeared into the depths of the Internet, but it turned out to be prescient.


Berger, who worked for a CityTime consultant called Spherion, Mazer, and four other people were indicted last month for defrauding the city of $80 million—a theft that made the Mafia's $6 million Lufthansa heist in 1978 look like a bodega stickup job.


Supposedly acting as "quality assurance" consultants, Mazer, Berger, and their accomplices are instead accused of falsifying payments to shell companies, pocketing the proceeds, and making up phony time cards for work they never performed. The defendants have pleaded not guilty.


Bondy, meanwhile, was suspended without pay following the indictments and forced to resign as the head of Bloomberg's Office of Payroll Administration. He could face indictment as well. Bondy, it emerged, not only was a former CityTime consultant, but had also worked with Mazer in the past, yet he didn't disclose those ties until years later.


Originally slated in 1998 to cost $63 million over five years, CityTime has cost the city more than $760 million over its 12 beleaguered years of existence. Despite all that expense, the system is operating in only about a third of all city agencies.


The cost overruns were caused by the vast complexity of the project and changes to the plans, claim Bloomberg officials and the company responsible for building the system, Virginia-based Science Applications International Corp.


Nonsense, says a union official who represents city architects and engineers, and has closely tracked the project.


"There's no way that any problems or changes they had could justify a cost increase of more than 10 times," says Local 375 vice president Jon Forster, who believes SAIC should face criminal investigation. "In 12 years, we haven't changed the number of agencies or the number of employees. My sense is that someone saw a gravy train here, and they said, 'Let's go for it.' "


Last week, federal prosecutors issued subpoenas to SAIC for documents related to the project—presumably to determine just what happened to all that money. There are, records show, a couple hundred other consultants on the project, and you have to wonder what they were doing.


But even after a year of revelations about CityTime, a lot of questions remain unanswered: How much money was wasted or stolen? How did this happen, in spite of red flags dating back to at least early 2003? And how did the city miss it for so long?


Mayor Bloomberg's comments on the scandal have been less than satisfying. Over the years, for one, his administration lowballed the true total cost of the project. And so far he has yet to offer a coherent explanation of how CityTime went bad. It didn't happen by accident, as the mayor appeared to suggest in some of his comments, especially when he called it a "disaster."


The definition of "disaster" generally includes a component of misfortune—as if the project was beset with bad luck. But in this case, there was intent. The indictment makes that clear enough.


In saying he wished he spent more time with the project, Bloomberg appeared out of touch, which is fairly disturbing for a man who cloaks himself as a great manager and technology expert.


He also suggested that the city's trust had been "misplaced." It was almost as if he was characterizing city government as a lover shocked to find out his spouse had cheated on him. The credo "Trust, but verify" comes to mind.


In December, once again seeking to minimize the scandal, he said, "Nothing goes without some problems, whether it's in your family, your company, your government, [or] the world."


Moreover, throughout his administration, Bloomberg repeatedly cut agencies, shrunk city staff, and recited this mantra: "We have to do more with less." But on the CityTime project, he or his aides appeared to have decided it was OK to do less with more.


And for that matter, what does it say about the city comptroller's office, which also had an oversight role on the payroll agency?


In fairness, the current comptroller, John Liu, has aggressively raised questions about CityTime. He was the one who persuaded Mayor Bloomberg to stop the open-ended payments to SAIC, and forced them to agree to a real deadline.


That decision magically accelerated the pace of the project. By last September, just 73,000 employees were on the system. By December, the number had shot up to 100,000 employees, proving that there's nothing like a little work incentive to get things done.


But Liu's success only makes one wonder why questions weren't raised much sooner by his predecessor, William Thompson.


Records indicate that along with the mayor's office, the comptroller's office approved all of the contract increases, but didn't audit CityTime until this year. 


That audit found, among other things, that the project was plagued by "poor management decisions." It was so bad, in fact, that there was no way to figure out just how many dollars were wasted, the audit said.


Forster, the Local 375 official, tells the Voice that his people approached Thompson's office in 2007 to request an inquiry on CityTime, but were politely rebuffed.


"It just seemed like they had too much on their plate at the time to take on something so massive," Forster says. "And then there was the election and that was sort of it."


Moreover, an SAIC competitor told the New York Post that he had been raising red flags for years, saying he spoke to both Comptroller Thompson's office and the mayor's office about his concerns.


Comptroller spokeswoman Sharon Lee said she couldn't comment on the Thompson era.


And what does the scandal say about the Department of Investigation?


DOI commissioner Rose Gill Hearn has been aggressive in pursuing CityTime this past year. According to the federal indictment, the investigation began in June 2010, when a former consultant told DOI he was being paid by a company that hadn't been approved to work on the project. The federal case appears to rely heavily on the DOI investigation.


But you have to wonder what, if anything, was done before then. It's hard to believe that not one person approached DOI between 1998 and 2010 to complain about the internal workings of the project.


In fact, in 2007, the Voice has learned, DOI did investigate CityTime, including interviewing several CityTime consultants and a few payroll affairs people.


In addition, the probe examined a Department of Defense Inspector General investigation into a number of former SAIC employees who had formally complained that after they blew the whistle on improper billing practices, SAIC retaliated against them by firing them, records show.


What DOI did with the information that was gathered remains unclear.


DOI spokeswoman Diane Struzzi declined to comment on any specifics because of the current, ongoing investigation into CityTime. "There have been a series of allegations going back several years—some have borne fruit and some have not," she said. "There is not a single complaint that came into this department that laid out the kickbacks, the money laundering, or the shell companies. DOI uncovered those crimes."


And, of course, there's the January 2009 anonymous Internet posting, which should have piqued someone's curiosity. It wasn't all that hard to stumble across it.


And then there's the City Council—the supposed check on the mayor's spending habits. While some Council members—like Letitia James and Joseph Addabbo—have sought answers, where was the council in the years when the project grew out of control? Isn't the council supposed to approve big contract increases?


While the council voted to approve the initial contract, James says that it did not get a chance to approve or disapprove the subsequent and sharp cost increases. In essence, she claims, the Bloomberg administration was able to do an end run around on the council's oversight role. Can it really be true that the council had no idea what was happening in the project?


Jamie McShane, a spokesman for Council Speaker Christine Quinn, did not respond to Voice questions.


In many respects, the local media was also behind the curve. Part of the reason was that the Bloomberg administration kept the true cost of the project under wraps. As a result, there was confusion in the press about just what the project cost. A New York Times article in January 2007, for example, set the project cost at $180 million, when, by then, the true expense was already much higher.


It wasn't until Daily News columnist Juan Gonzalez began in late 2009 what would become a series of probing columns that the story began to emerge from the shadows.


Of course, CityTime isn't the first high-tech city project to go horribly awry—just the most expensive and allegedly the most corrupt.


City Comptroller Liu said in May that there were a series of high-tech city projects with cost overruns, missed deadlines, and incomplete or ineffective systems. A city personnel tracking system, for example, mushroomed from $66 million to $155 million.


Just last week, Liu said that a project to create two new 911 emergency systems for the police and fire departments had swelled from $380 million in 2005 to $666 million with no major alterations of the project plans. The project is one year overdue, and has been troubled by poor management and oversight by the contractor, his office said.


He rejected a new $286 million contract request from the Bloomberg administration and demanded a review. The central issue, he charged, was that, similar to CityTime, the project allows a kind of open-ended spending.


"This type of vague budgeting formula allows outside consultants to bill on an hourly basis and collect exorbitant fees, as in the case of the CityTime project," Liu said. "The program was troubled by findings of poor management and less than satisfactory oversight by the original vendor."


The history of CityTime goes back to 1996 and the Giuliani administration. The goal was to computerize the city's payroll system, which covers close to 160,000 workers. After another bidder dropped out, the contract was awarded to MCI Systemhouse. After two years, Systemhouse came up with a thick, heavily detailed, and comprehensive technical plan, or "scope of work," for the project, and estimated that it would cost $63 million and take five years.


In other words, it wasn't like someone just came up with the $63 million budget on a cocktail napkin. A great deal of thought and work went into it.


The proposal contained detailed deadlines that made clear the contractor felt it was possible to complete the job in five years, plus lists of thousands of pieces of high-tech equipment that needed to be purchased and dozens of deadlines listed in 30-day increments.


Even at $63 million, the contract provided fairly lavish pay rates for the contractors: more than $300 an hour for top managers, more than $200 per hour for mid-level people. Even the word processors would get $80 an hour. (A percentage is, of course, kicked to the company.)


Even taking the cost of inflation into account, if the project took 10 years, the finished product still should have cost only about $84.5 million.


Moreover, the contract contained a key provision that levied money damages for missed deadlines—a standard incentive that was irresponsibly eliminated a few years later.


But Systemhouse was bought by WorldCom and dropped the project, transferring its CityTime unit to a new firm, Paradigm 4.


In 2000, the city decided to add new elements to the plan, chiefly switching to a system with one central Internet server, rather than a separate server in each agency. The second of a dozen contract amendments increased the budget to $73 million.


The following year, the city hired Mazer's firm, Spherion, to do something called "quality assurance"—essentially to keep an eye on the project. That contract started at a cost of $3.4 million. Since then, it has been changed a dozen times and has ballooned to $51 million. As the Mazer indictment suggests, not only were they not watching the contractor, no one was watching the watchers.


For some reason, the contract was changed after five months to drop a requirement that Spherion examine and approve each piece of the project. As a result, the last record of such a review dates back to 2001, the comptroller's audit says.


Spherion was also supposed to supply regular summaries of the project's progress. The comptroller could not find any such summaries after 2001.


About a year later, the role of project manager was added to Spherion's contract. That meant that the auditor was now also involved in managing the project, according to the 2010 comptroller's audit—a clear conflict of interest.


By the time Mayor Bloomberg was elected, Paradigm 4 was out of the picture and SAIC had taken over the project. When the contractors changed, critics have said, the council should have had a chance to review it. There was no such review. SAIC was selected without competitive bidding.


And in a critical, and ultimately unfortunate, move, the contract was changed from one that levied penalties for failure to hit milestones to a more open-ended method of monthly payments based on hours worked. Ironically, the move was supposed to "streamline" the process. It caused the opposite effect, giving the contractor no incentive to make deadlines.


SAIC has won many millions in government contracts over the years, but it has also racked up its share of fines. In 1995, the company paid a $2.5 million fine for defrauding the government over a computer system for jet fighters. In 1998, the company paid a $1.1 million fine to the Defense Department.


A group of former employees accused the firm of retaliating against them for complaining about questionable billing practices on another job.


In January 2002, perhaps true to form, SAIC officials had the brilliant idea of trying to hire the city official overseeing them, Richard Valcich. In a letter uncovered from the city comptroller's office, Valcich expressed his dismay at the overture, published reports said.


Valcich said he was sorry "if I seemed rude and abruptly shortened your discussion on a future post city-employment position with SAIC." He added: "It is inappropriate to discuss any post employment with a company that I do business with."


By November 2002, another amendment made more changes to the project, and the approved cost rose again from $115 million.


Meanwhile, things between Valcich and SAIC weren't going so well. In what should have been an enormous red flag to the comptroller and the mayor, Valcich slammed SAIC's job performance in a February 19, 2003, letter released by the comptroller's office.


Valcich accused the company of cutting the city out of the project, creating needless delays, and wasting time and money. He said key personnel weren't showing up at meetings and records weren't being updated. He said the company repeatedly stopped work to "review" progress. He even questioned SAIC's credibility.


"SAIC's commitment to quality is almost nonexistent and is reflected from the top down," Valcich wrote. "This lack of commitment to quality permeates matters both great and small."


He added, "It appears to the city that SAIC seems to think [it] could take as long as possible to finish an activity. . . . The city of New York has spent approximately $35 million on CityTime and does not have a tangible system to show for it."


Despite the almost angry tone of the letter—written by the city's point man on the sprawling project, the man who had been shepherding the project since 1995—it did not appear to have any impact. No one from either the mayor's or comptroller's offices appeared to have jumped in to light a fire under SAIC.


The system kept becoming more complex, and at some point SAIC began to resist going forward. SAIC hired a consultant, Ariel Partners, who warned that the technology the city had paid for couldn't handle all the things the city wanted it to.


SAIC finally said it would go forward, but only if it was paid on an hourly basis, rather than a flat rate per piece of the element. The city agreed, which meant SAIC now had a kind of green light to spend whatever it wanted to make the system happen.


By 2004, Valcich had retired from the payroll post, to be replaced by Joel Bondy, a former consultant with Spherion, the company supposedly vetting the project for the city. Bondy had also worked with Mazer, the recently indicted Spherion consultant, at the city's foster-care agency.


The effort to redesign the system took two more years. An SAIC spokeswoman was now saying the two sides were "working well together, and approved our personnel, approach, and overall architecture."


In 2005, with the redesign complete, the city had a chance to walk away from the project. The city instead turned to Spherion for advice, and, of course, the conflicted firm said, "Let's keep going," the comptroller's audit said.


With a rough squiggle, Bondy signed off on a contract extension that gave SAIC another three to six years to finish the project. The amendment justified the extension only by saying it was needed because of unspecified "delays."


By February 2006, the official contract cost was now at least $225 million, triple the original project cost. This time the increase was blamed on "a major increase in the cost of deployment."


Meanwhile, the alleged fraud involving the Spherion consultants had already begun, the indictment said.


Mazer awarded big-money contracts to friends, who then kicked back $25 million to him. They billed the city for phantom work and squirreled the money away in shell companies. He and his accomplices allegedly pursued this fraud for the next five years, eventually stealing some $80 million.


Meanwhile, the public focus was on the effect of the payroll system on city employees. From 2006 through 2009, unions mounted a campaign to limit the system, especially palm scanners, which were seen as potential health hazards. They also charged that the system violated civil rights, and imposed unfair demands on employees. They held demonstrations, testified at City Council hearings, and spoke to the media. Forster's union filed an unfair labor complaint.


Also in 2007, a former SAIC employee on a federal contract alleged that he and several colleagues were fired for going to the feds to complain about improper billing practices by the company.


A city Vendex form indicated that in June 2007, the Department of Defense Inspector General began investigating SAIC based on those allegations.


Did that disclosure, now more than three years old, trigger any concern about SAIC in city government? It is unclear.


In May 2008, Bondy testified before the City Council. In his written remarks, tellingly, he expended not a word on the cost of the project. Not one word.


But behind the scenes, he repeatedly gave project contractors high performance evaluations in 2008 and 2009, The New York Times reported.


Over the objections of unions and some council members, Bloomberg kept the project going.


In January 2009, the anonymous letter floated onto that CNN bulletin board. In September 2009, Bloomberg added another $140 million to the CityTime budget—bringing the total to more than $700 million.


And then, columnist Juan Gonzalez started writing articles about the project, reporting on December 4, 2009, that Spherion consultant Mitchell Goldstein made $490,000 that year. The top 11 consultants, he wrote, made an average of $307,000 a year through 2012.

Living the good life: CityTime’s former overseer, Joel Bondy

On December 17, he reported that Bondy convinced Spherion to hire Goldstein—a possible conflict of interest because the two men had been business partners.


Gonzalez quoted a former consultant who said he hardly did any real work, but got paid $120,000 for it. "The unwritten rule was to keep billing for the hours you showed up, not the work you did," this consultant told Gonzalez.


And even after the disclosure that Bondy had close ties to the people he was supposed to be overseeing, Bloomberg left him in office for another year.


In January of last year, Gonzalez reported that a tech consultant who used to work for the city got millions from CityTime while running a full-time lobbying firm.


Public pressure began to take hold, and the story started to move forward rapidly.


In February, Liu rejected an $8 million Spherion contract, and launched an audit of CityTime. The budget was now $722 million. He called on the mayor to freeze all contracts, calling it a "money pit."


In March, Bloomberg made his admission that the project was a "disaster," but insisted such projects were rarely successful. A few days later, he said he wished he had "focused on it more."


On March 26, Gonzalez reported that the CityTime project manager made $650,000 in 2009, and there were 39 other people making at least $500,000 a year. He noted that the city laid off 510 public school aides to save $12 million, while earmarking $24 million to pay CityTime consultants.


"How can anyone justify firing $18,000-a-year school aides while hiring half-a-million-dollar computer geeks who can't even deliver a good product?" Gonzalez wondered.


But Bloomberg's people continued to defend the need for the project and granted it an extension through September.


In June, the DOI investigation began, with that complaint from the consultant paid by a company not approved to work on the project.


By last August, Bloomberg and Liu were sparring over the contract. Liu didn't want to approve another $176 million in spending; Bloomberg was threatening to withhold paychecks.


The city Independent Budget Office reported then that $641 million in capital funds were either spent or planned, along with $232 million in spent and planned operating funds. That added up to more than $873 million.


Last September, Liu refused to pay $32 million to SAIC until next June unless the company finished the project by then. Finally, there was a penalty attached to missing a deadline: $3 million per month.


The indictments came down on December 15. The six defendants were released on bail. Authorities seized some $850,000 from safety deposit boxes.


Bondy was suspended the following day and resigned three days before Christmas. The Spherion contract was suspended. The Department of Education suspended a separate Spherion contract. Bloomberg ordered a review of technology projects.


The state comptroller jumped on the bandwagon, rejecting an SAIC contract. 


And now, with the federal and city investigations still ongoing, more indictments could be coming. But taxpayers have already paid for everyone else's mistakes, inattention, and misbehavior.


grayman@villagevoice.com