Public Employee Press

What happens without civil service?
CityTime consultants charged in $80 million heist


By GREGORY N. HEIRES

The $80 million CityTime scandal offers a stark warning against contracting out.

"CityTime demonstrates the folly of the Bloomberg administration's plan to dismantle the civil service system, which protects taxpayers from corruption," said DC 37 Executive Director Lillian Roberts, who had earlier called for an investigation of the runaway costs.

The price of the overdue and incomplete project had mushroomed from $63 million to $760 million by September, when Comptroller John Liu forced Mayor Bloomberg to agree to end the contract and let city employees take over the work by June 30.

In December, the U.S. Justice Dept. arrested four consultants on the computerized payroll project for allegedly stealing $80 million. The federal prosecutor charged the consultants - whose ringleader, Mark Mazer, was hired despite his arrest record and tainted history at the Administration for Children's Services - with submitting false time sheets, giving the city phony vendor information and kicking back $25 million through shell companies.

The mayor appeared almost cavalier as he remarked that the glaring problems with the project had just "slipped through the cracks."

"What is really remarkable is that the administration cast a blind eye on CityTime for years despite the many red flags that were raised by the union and others," DC 37 Assistant Associate Director Henry Garrido said. Garrido heads the union's white paper project, which is studying waste in the city's $10.5 billion procurement budget.

In 2003, former Office of Payroll Administration Director Richard Valcich charged Science Applications International Corp., the Virginia-based company that oversees CityTime with an "almost nonexistent commitment to quality."

After the arrests, Bloomberg suspended OPA director Joel Bondy, who quickly quit. Bondy was Mazer's buddy and supervisor at ACS, where the fraud scheme mastermind was investigated twice and charged with sexual harassment.

After the FBI looked into foster-care checks issued by Mazer's unit, the city settled for $49 million and cut his pay. According to his attorney, Gerald Shargel, he was not charged in another case involving 200 missing laptop computers. Mazer pleaded guilty, according to press reports, to shoplifting in 2000 and resigned from his position as a Computer Specialist, a title represented by Local 2627, whose members will soon take over daily operations of CityTime.

Former Local 2627 President Edward Hysyk recalled advising the two members who reported sexual harassment by Mazer. The city paid $260,000 to settle their lawsuits.

"Civil servants go through background checks before they are hired," said Local 2627 President Robert Ajaye. "Apparently safeguards aren't so rigorous when it comes to hiring consultants."

CityTime 2?

In January, Comptroller Liu rejected Bloomberg's request for an additional $286 million for another troubled contracted-out project, the Emergency Communications Transformation Program, saying the city should review the operation to "prevent CityTime 2."

As its cost ballooned from $1.3 billion to $2 billion, Roberts said a year ago that federal and local law enforcement officials should look into the ECTP project to integrate the Police, Fire and EMS communications systems.

The consolidated emergency system will have two call centers. The main center in Brooklyn is a year behind schedule and still not fully operational.

The comptroller is holding up a $286 million contract with Northrop Grumman for work on the Bronx backup center, whose cost has jumped from $380 million to $666 million.

The original ECTP contract went to a company that New York State identifies as a "non-responsible vendor," Hewlett-Packard, which should have been a red flag for the city.

"How can an administration that claims to bring sound business practices to government be so willing to keep opening its checkbook while these contracted-out projects get out of control?" Garrido asked.