Liu Cuts Through the Cant

The WSJ reports on Comptroller John Liu's caustic criticism of Mayor Bloomberg's handling of the CityTime scandal-and he isn't buying the mayor culpas: "Comptroller John Liu stepped up his criticism of Mayor Michael Bloomberg's financial stewardship in light of the burgeoning scandal surrounding New York City's long-delayed computerized payroll system, reproaching the mayor for suggesting there's little that can be done to prevent high-tech projects from ballooning over budget. In a letter to the mayor and in an interview with The Wall Street Journal, the comptroller outlined how he believes the Bloomberg administration has failed to do enough to safeguard the city's finances against wasteful spending and potential fraud. Information-technology projects, in particular, lack sufficient oversight, he said."

The comptroller's critique comes on top of more discoveries about the wayward life of Mark Mazer, CityTime's consultant extraordinaire: "The accused mastermind of an $80 million taxpayer ripoff was twice probed for fraud and sued for sexual harassment when he worked for the city, a Daily News investigation found. Despite his checkered history, Mark Mazer was hired as a highly paid consultant on the sprawling CityTime project - a job prosecutors said allowed him to orchestrate the massive scam."

All of which has the mayor backpedaling but, as the Journal story highlights, Liu is on the attack: "The comptroller, a potential candidate for mayor in 2013, is the highest-ranking city official to take the mayor to task, offering another view of the mayor's carefully choreographed image as a top-flight fiscal expert. "I must respectfully disagree with your comments from Friday suggesting that big software projects can be expected to go over budget," Mr. Liu wrote. "With all our budget challenges we cannot afford to equivocate on the need for strong management and budgetary compliance." In an interview, Mr. Liu questioned Mr. Bloomberg's commitment to a "zero-tolerance" policy on abuse, charging the mayor "backtracked" on that pledge during his weekly radio show last week. "His words on Friday almost conveyed a sense of inevitability of cost overruns on these types of projects," he said. "That doesn't sound like zero-tolerance to me."

Liu also dramatizes the fact that CityTime is just one-although an egregious example-of the way in which the Bloombergistas have relied on outside consultants: "The CityTime scandal makes it abundantly clear that the city must have a system in place that properly tracks and assesses sub-contracts as well as prime-contracts, including invoices, timesheets and explanations of work performed, in order to seriously reign-in the potential for waste, fraud, abuse and certainly embezzlement," the comptroller wrote in his letter to Mr. Bloomberg. He said billions of dollars have been spent on outside consultants over the years, and that a "significant portion" of that money has been wasted." (emphasis added)

And we know of a perfect illustration of the comptroller's point-the defrauders hired by EDC to weigh the environmental and traffic impacts of Willets Point/Van Wyck ramps. AKRF and its subcontractors-Eng Won Taub and URS-was hired without any competitive bidding and when they submitted a deficient ramp (AMR) report, Willets Point United and its own consultant Brian Ketcham blew it out of the water. Because of this, EDC and crew have been busy redoing the AMR to the tune of, as yet undocumented, tens of millions of dollars.

In our view, once the original report was sh*t canned, EDC should have put the revised AMR work out to bid-why reward the consultants for their shoddy work? But, because there are no controls or system of checks and balances any where in this administration-but especially at EDC-the agency has carte blanche to spend money with little actual accountability.

Clearly, the reputation of Mike Bloomberg as a shrewd fiscal manager is in tatters: "Last year, Mr. Bloomberg told voters he deserved a third four-year term because the city needed his financial acumen to help shepherd New Yorkers through the global economic crisis. Some of the mayor's critics have pointed to last week's federal charges as evidence that the mayor isn't living up to what he promised."

With the controversy swirling, Howard Wolfson was sent out to play defense: "Deputy Mayor Howard Wolfson said Mr. Bloomberg "takes accountability for anything" that happens in his administration. "I would put this mayor's record of fiscal responsibility over the last nine years with any chief executive in the country," he said. "The reason why we are not here in New York City in the same budget mess that they are in Albany is because this mayor has consistently safeguarded the city's finances."

Not really Howard. The reason the city is in better shape is because of the mayor's tax and regulate policies that-along with the trusty Wall Street economic engine-have created a better budget environment than Albany. And, as an aside, saying that one is doing better than Albany is not a robust defense Howard-and it elides the core issues of the scandal itself.

Absent all of the money lost and stolen, how would the current retrenchment of city services actually look today? Would we need to be cutting fire service? The final accounting is yet to be done, but were pleased that we finally have, in the person of the comptroller, a true fiscal watchdog in place to do this needed oversight work