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As Prosecutors Unseal Indictments in CityTime Scandal, Will Bloomberg Officials Be Next?

StoryJune 23, 2011
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Guests
Juan González

Democracy Now! co-host and New York Daily News columnist who won a 2010 Polk Award for exposing the scandal behind Mayor Michael Bloomberg’s attempt to create a new computerized payroll system called CityTime. Gonzalez’s reporting helped lead to the federal indictment of four consultants and two associates on charges that they orchestrated a fraud that cost city taxpayers more than $80 million.


Prosecutors have unsealed indictments against the company TechnoDyne and its founders in the CityTime payroll scandal in New York City, which was first exposed by Democracy Now!’s co-host Juan Gonzalez in his column for the New York Daily News. TechnoDyne executives face charges of paying millions in kickbacks to get CityTime work, and money laundering. Meanwhile, the founders of the company, Reddy Allen and his wife Padma, are now fugitives after fleeing to India. Prosecutors described CityTime as "one of the largest and most brazen frauds ever committed against the city." Following the indictments, Gonzalez says the question remains whether top officials in the administration of New York City Mayor Michael Bloomberg will also be charged. [includes rush transcript]


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

AMY GOODMAN: Juan, the story that you broke, for which you won the George Polk Award, about CityTime in New York City is only ever-expanding.

JUAN GONZALEZ: Yes, it continues to grow. This week, the U.S. attorney for the Southern District of New York announced the indictments of three more people. It now brings it to 11 people who have been indicted over the last few months. Two of them have already pled guilty and are now cooperating, and another one has died of a heart attack. But the investigation expands. The U.S. attorney called it this week the largest fraud against government, not only in the history of the Bloomberg administration, but in the history of New York City. And he said that as much as $600 million of taxpayer dollars that was spent is tainted by fraud.

And one company alone that received $450 million for this payroll project—it was basically a computerized payroll project to track New York City workers—the heads of that company and the company itself were indicted. The two heads of the company, Reddy Allen and Padma Allen, a husband-and-wife team, fled to India, their native India, shortly after being subpoenaed to appear at a grand jury. But according to the indictment, they have already, over the past few years, wired $46 million of the money that they got on the contract to India, and out of that they used about $14 million to pay kickbacks to other contractors who were providing them jobs. So it’s a massive scandal that continues to grow.

Big question is, will the federal authorities actually indict members of the Bloomberg administration? Were any of them — how is it possible that over six or seven years this massive theft of government money went on, and the officials in charge of the project did not know anything about it? One of them, of course, has already resigned, the head of the city’s Payroll Administration. But we’re still waiting to see whether any actual government officials will also be indicted in this continuing and spreading scandal.

AMY GOODMAN: Well, we continue to look forward to your reports, Juan.

JUAN GONZALEZ: Yeah, well, it’s been now since 2009 I’ve been writing about this, and finally, in late 2010, the government began to move.

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