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2010-12-23

Juan Gonzalez: NYC CityTime Fraud Scheme "Biggest Scandal of Entire Bloomberg Era"

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Four consultants hired to eliminate waste and fraud in New York City’s municipal payroll were arrested last week on charges of stealing $80 million from city coffers. Democracy Now! co-host and New York Daily News columnist Juan Gonzalez, who covered the story for the past year, calls it "the biggest scandal of the Bloomberg era." [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Before we move on to our next segment, Juan, congratulations for your groundbreaking work — Juan Gonzalez, writing for the New York Daily News. You really broke the big scandal of the Bloomberg administration story over the last year.

JUAN GONZALEZ: Yes, well, I’ve been working on it now for about a year, from last December to now, on this huge problem of the increasing computerization of government under Bloomberg, but especially one particular project that ballooned from $60 million to $700 million during his administration to computerize the payroll system of the city government. And it’s now exploded into the biggest scandal of the entire Bloomberg era, with — last week, as we reported here, there were — the FBI arrested six people, four of them computer consultants for the city. The following day, Bloomberg was forced to remove the director of the payroll administration. Investigations are continuing. There could be other arrests. A massive theft involving a huge criminal conspiracy to launder money and bilk the city out of the least $80 million and possibly even more money.

And then, just this week, the major defense contractor who was working on this project, Scientific Applications International Corp., SAIC — the MTA, the Transit Authority, canceled a $118 million contract they were about to get, and then the city canceled another $40 million contract that they were about to get. And there are more investigations going into what SAIC did, involved in this contract, as well.

AMY GOODMAN: And Juan, describe the scene last Thursday. This is after a number of the indictments had come down in Queens.

JUAN GONZALEZ: Well, what happened is, the criminal group —- the alleged criminal group, because they’ve all pleaded "not guilty" at this point -—

AMY GOODMAN: These are the consultants who were making the internet system more secure in the city?

JUAN GONZALEZ: Well, they were making the payroll system and the timekeeping system. They were supposed to make sure that the average city worker did not steal time on their time sheets, when they were doing all the stealing themselves, according to federal prosecutors.

But after several people had been arrested and released on bail, the investigators began seizing bank accounts across the city, because they had many phantom companies. And they went to one bank where they seized a safe deposit box with — where they found $850,000 in cash in the safe deposit box. And as they were there in the bank, one of the people they had arrested the day before came to the bank with a dufflebag, apparently trying to take the cash before the prosecutors got to it, but the person got there a little late, as they had already seized the money.

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