Public Employee Press

Consultant arrested in school rip-off
Contracting OUT
robs children and taxpayers

By GREGORY N. HEIRES

As municipal unions campaign for stricter regulation of contracting out, another computer consultant was arrested in a $3.6 million scam at the Dept. of Education.

"It's privatization run amok," said DC 37 Executive Director Lillian Roberts, who has tirelessly devoted her eight years as head of the city's largest municipal employees union to sounding the alarm about wasteful contracting out by New York City.

"Where is the oversight for the city's $10 billion annual contracting budget and the shadow army of consultants who work for our government? This has to stop," she said.

CityTime: $80 million stolen

Last year, taxpayers were aghast when six consultants and family members were arrested in a scheme that bilked the city of $80 million in the overdue and incomplete CityTime payroll automation project.

Before the arrests and before Daily News columnist Juan Gonzalez blew the CityTime scandal out of the water, DC 37 and Local 375 had denounced the project for years for its waste of money, delays and use of intrusive finger-imaging to take attendance.

But despite suggestions from Deputy Mayor Stephen Goldsmith that cutting contracting out could reduce city costs, the Bloomberg administration never stopped funneling million-dollar projects to unaccountable, corrupt consultants when the work could be done more efficiently by honest civil servants.

School project: $3.6 million lost

On April 28, computer consultant Willard Lanham was charged with ripping off $3.6 million from the school system as he worked on three major projects, including ProjectConnect, which aims to hook up the city's 1,400 public schools to the Internet.

Lanham, who worked closely with IBM and Verizon, charged the department $5.3 million for consulting work that actually only cost his company $1.7 million, according to the indictment.

Lanham, 57, who earned $200,000 a year at DOE, used his ill-gotten tax dollars to live a life of luxury, prosecutors said. He owns a $600,000 fleet of cars that includes a Corvette, Mercedes Benz, Lexus and Cadillac Escalade.

Lanham lives in a two-story $1.1 million mansion on Long Island with his 42-year-old wife, Laura Lanham, who has a salacious blog ("Meet Laura" at cougarlifediaries.com, an online dating service to help older women and younger men establish relationships). The couple is going through a divorce but continuing to live together.

Lanham's scheme involved hiring subcontractors at low hourly rates, billing DOE at higher rates and pocketing the difference. He hired his brother, for example, at $40 an hour and charged the public school system $225 an hour, according to a criminal complaint.

DC 37 warned about scams

"We have been warning about this for years," said DC 37 Associate Director Henry Garrido, who heads the union's white paper project on contracting out. "We have meetings with the Dept. of Education, telling them about how they can save a lot of money by eliminating these subcontracting scams."

Computer workers represented by Electronic Data Processing Personnel Local 2627 could have easily done the project handled by Lanham, Garrido said. Local 2627 President Robert D. Ajaye pointed out that it's not uncommon for the city to pay computer consultants $200,000 to $400,000 a year while Local 2627 members do the same work for $100,000.

Contractor luxury, taxpayer loss

In an effort to prevent wasteful spending on contracting out and to keep work in house, DC 37 is working with the Municipal Labor Committee, the umbrella group representing city unions, to add teeth to Local Law 35.

The law requires the city to do a cost-benefit analysis and allow for a union counterproposal when contracting out will displace city civil service workers. But the city has been able to get around the requirement by simply checking a box that says displacement won't occur.

Meanwhile, with the city exercising inadequate oversight, city residents, workers and business owners should expect to hear about more contracting scandals as consultants use the taxpayers' hard-earned money to live a life of luxury and the Bloomberg administration shuts its eyes.