Saturday, July 27, 2013

NYC Does Not Need Billy Thompson As Mayor

Billy Thompson should not, cannot, must not, Win another Election and Hold Public Office. He has a shady past which rivals other shady pasts, and I mean big names like Weiner and Spitzer, if not in sex scandal, financial scandal.

Hank Sheinkopf is working hard on his campaign. I will say no more, but re-post a prior post on my blog

Mayoral candidate Bill Thompson failed repeatedly as controller to intervene as payroll system CityTime ballooned in costs

The initial cost was $73 million, but that became more than $700 million as Thompson declined to audit the suspicious effort.

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Federal prosecutors called it a “fraudsters’ field day that lasted seven years.”

The effort to modernize the city’s payroll system — a project called CityTime — began with high hopes: a promise of huge savings by bringing the pen-and-paper timekeeping systems for city workers into the 21st century.

But from an initial price of $73 million, city spending ballooned to more than $700 million. Some $500 million of that money disappeared into a vast network of overseas bank accounts. Ten people would be indicted.

In his campaign for mayor, Democrat Bill Thompson touts his eight years as “the city’s top financial watchdog.” But a Daily News investigation has found that Thompson repeatedly failed to intervene as the CityTime scandal unfolded on his watch as controller.

His top lieutenants were told repeatedly about the soaring costs — and were warned that CityTime consultants had racked up tens of thousands of dollars in paychecks for work they didn’t perform.

Yet, of the 626 audits Thompson’s office conducted in his eight years as controller, none looked at CityTime.

“We just kept giving (CityTime) increases, and there was no limit to it. It was so obvious it was a runaway train,” a former auditor in the controller's office, who asked not to be identified, told The News.


“What needed to happen was that somebody needed to do an overall assessment to see where the money is going.”

Thompson spokesman John Collins acknowledged that Thompson could have done more — but Collins said that others, including the mayor, City Council and Budget Director Mark Page, bear responsibility, too.

Collins noted that Thompson met with Page “more than once to warn the administration about possible problems in this contract, and had assurances that those issues would be addressed."

The Office of Payroll Administration, a hybrid agency of the mayor’s and controller’s offices, oversaw the CityTime project. The OPA, in turn, was overseen by a two-person board — one representing the mayor, the other the controller.

In 2002, when Thompson took office as controller, OPA expected CityTime would cost $73 million.

But it soon became clear that the project’s software couldn’t handle the myriad payroll practices used by 81 city agencies, and costs began to rise.
Within a year, OPA requested a contract modification to $100 million

  Reddy and Padma Allen


The controller must sign off on all modifications, and the insider said Thompson was warned to reject the price hike until he got a clear idea of where the project was going.
Yet, Thompson signed off on that amendment.
As costs grew, Thompson’s top deputies were continuously briefed on the issue, through the controller’s representative on the OPA board.

The insider said OPA would always win approval to “modify” the contract from the controller without explaining the escalating costs.

“The (OPA) guy would come in. He didn’t know what the overall price was. He would just ask for increases that would get him six months down the road,” the insider said.

OPA’s former director, Joel Bondy, acknowledged in testimony to the City Council that Thompson’s office privately had “concerns” about the project as far back as 2005.

“There was concern about the fact that this program had gone on for years and that the costs were going up, and they wanted to know what was it really going to cost and how long was it really going to take?”


Yet, within a year, Thompson approved another amendment, hiking the cost to $244 million, then another in 2007, to bring it to $349 million. In all, the controller signed off on seven such authorizations.
In July 2008, evidence of fraud emerged. OPA audited the time sheets of 31 consultants who had been terminated the previous year.

The audit — which has never been released — found nine instances of consultants drawing paychecks weeks after they stopped working.

City investigators later calculated the city was ripped off for $145,000 in the scheme.

Thompson’s office knew of this audit but did not commit to taking a look at the troubled project, a move that might have uncovered what would emerge as corruption on a grand scale.

Instead, the evidence of fraud discovered by the internal OPA audit remained secret.

A union leader, Jon Forster, of the Civil Service Technical Guild Local 375, met with two Thompson deputies in the controller’s office to voice his alarm. Forster brought reams of documents to argue that millions of taxpayer dollars spent on CityTime were disappearing, he recalled.

Former Executive Director of the Office of Payroll Administration Joel Bondy admitted in testimony that Thompson's office privately had concerns about CityTime as far back as 2005.


He said he was told, “It’s a very huge and complicated issue, so if I could narrow it down for them and just take a chunk of that, they would be open to that.”

Mike Bloomberg

“In the end,” he said, “there was no audit.”

The lack of oversight became an issue at a Council hearing on CityTime on Dec. 18, 2009. Councilwoman Letitia James (D-Brooklyn) asked Bondy, “Has the controller performed any audits?”

When Bondy said, “No,” James asked, “No audits at all? . . . So, basically, the only assessment was done internally, by the administration?”

Bondy replied, “Yes.”

Thompson left office 13 days later after losing the 2009 mayoral race. His successor as controller, John Liu, began investigating CityTime.

In September 2010, Liu’s audit revealed that a stunning lack of oversight allowed the CityTime contract to careen out of control. Liu called it a “money pit.”


Three months later, U.S. Attorney Preet Bharara announced criminal charges against CityTime consultants who were hired to oversee putting the project into effect. They were accused of manipulating the city into paying out contracts to businesses that they controlled and siphoning off some of that money for themselves.

Prosecutors noted the smoking gun that could have halted the fiasco two years earlier — the 2008 OPA audit that Thompson had seen, but the public had not.

The audit said flatly:

“This situation should not have occurred.”

A look at the CityTime scandal:

Jan. 1, 2002 William Thompson’s first day as controller. CityTime’s cost: $73 million


December 2002 Thompson approves CityTime contract amendment, price rises to $100M.

February 2004 CityTime amendment approved by Thompson — now it’s $114M.

2006 Thompson approves CityTime amendment, hiking price to $244M.

2007 Thompson approves CityTime amendment, rising price to $349M.

July 1, 2009 Thompson approves another amendment. Price now $628M.

Dec. 31, 2009 Thompson’s last day as controller. No audit of CityTime completed during his tenure.

Sept. 28, 2010 Thompson’s successor, John Liu, audits CityTime, finds OPA’s “mismanagement” of oversight likely resulted in CityTime’s bloated costs.

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