Boss Tweed Would Be Proud of Current Fraudster Field Day

Boss Tweed would be proud
The New York Daily News by Juan Gonzalez  -  March 14, 2012

In a city where Boss Tweed, Mayor Jimmy Walker, and Stanley Friedman all brazenly pilfered public money during eras gone by, no government scandal compares to the size and scope of CityTime.
It was "the single biggest fraud ever perpetrated on the city of New York," U.S. Attorney Preet Bharara said Wednesday.  But thanks to a dogged joint investigation by Bharara and Rose Gill Hearn, the commissioner for the city's Department of Investigation, the crooks are paying back most of what they stole.  Science Applications International Corp., the main contractor on the CityTime project - and one of the country's biggest defense giants - has agreed to return to taxpayers the astonishing sum of half a billion dollars by close of business Thursday.  Of that money, $466 million will go directly to the city treasury and the rest to the federal government. SAIC also agreed to forgo another $40 million in bills it had previously submitted to the city.  No local or state government in the country has ever recouped so much money from a single fraud, Bharara said.  The money represents a huge chunk of the nearly $700 million taxpayers shelled out for an automated timekeeping and payroll system that mushroomed over a decade to 10 times its original pricetag of $63 million.  More than two years ago, this column repeatedly questioned the ballooning costs of CityTime and the huge salaries being paid to hundreds of outside consultants on the project. The consultants made an average of $400,000 a year.  Several consultants mentioned by name in those columns - Mark Mazer of Spherion Inc., and Gerard Denault and Carl Bell of SAIC - were subsequently arrested. All were charged with being part of a massive scheme of kickbacks and inflated billings, with at least 11 individuals involved in what Bharara has described as a "fraudster field day that lasted seven years."  They're accused of using scores of shell companies and overseas bank accounts to siphon off hundreds of millions of dollars.  Bell and one other have since pleaded guilty and are cooperating. Two others fled to their native India before they could be arrested, and the feds have frozen or seized banks accounts and property worth another $52 million.  SAIC paid all that money and agreed to have the government appoint an outside monitor, to avoid a criminal prosecution. Think of that $500 million as a giant "get out of jail free" card.  Mayor Bloomberg, who stood next to Bharara at a press conference Wednesday, called this "a major victory for taxpayers...for justice and public integrity."  But for a guy about to receive a $500,000 settlement, the mayor did not seem all that elated.  Bloomberg has not yet explained how such a massive theft - the biggest stain on his administration - could occur for so long without any of his aides noticing.  Only one city official, former Payroll Administration director Joel Bondy, has lost his job because of CityTime.  Maybe when the criminal trial of the CityTime crooks finally begins, we'll learn what our own officials knew and didn't know.