Monday, December 20, 2010

Bloomberg Mayoralty Falling Through the Cracks

This CityTime scandal will we believe, prove to be the gift that keeps on giving-at least for those of us who didn't genuflect to the myth of Mike. We were definitely amused on Friday when the mayor opined that sometimes these kinds of things just slip through the cracks-the NY Post reports: "Somehow $80 million in alleged fraud just slipped through the cracks, Mayor Bloomberg said yesterday, when asked about the mind-blowing CityTime payroll scandal. "If you want to know how big projects have things that slip through the cracks, this is as good an example as you need," Bloomberg said on his weekly WABC radio show. His comments came on the heels of the arrest of six people charged with defrauding the massively over-budget CityTime project that was supposed to digitize worker time cards a decade ago."

Comptroller John Liu thought this was as funny as we did, and retorted that under this definition the Grand Canyon was also just a crack. All of which calls to mind one of our favorite lawyer jokes. A lawyer dies and goes to heaven. He complains to St. Peter that he is only fifty years old, and is too young to die. St, Peter looks down at his sheet of paper (perhaps a time sheet) and responds: "But it says here that you billed for eighty."

This is a gut wrenching scandal for the mayor because it goes to the heart of what should be Mike Bloomberg's strength-information systems. This is one area where he should have all the expertise in the world-but if he failed to give proper oversight to this initiative, what does that say of all his other claims to excellence?

In our view, CityTime will be the beginning of the end of the Bloomberg era of omnipotence. The critics, emboldened by this demystification of Mike will start to peck away at his legitimacy-and search for other areas to question his authority. The erosion appears to  be inevitable-and will be advanced further as the details of how this scandal was allowed to fester become more fully known.

The NY Daily News begins this process yesterday, with a lengthy evaluation of the makings of the City Times scandal-it is not a pretty picture: "In March 2008, a veteran city consultant working on a complicated project called CityTime complained to the Department of Investigation. His letter had a bold title: "Fraudulent Timesheet submitted for time not worked. The complaint said "two senior level managers (Mr. Mark Mazer - consultant - and Mr. Scott Berger - consultant) sign weekly timesheets of [a senior manager] having full knowledge" the woman was absent or on vacation. As far as the whistleblower could tell, nothing happened."

This is what is known as a smoking gun-and if it had been taken seriously then, the entire scam would have been immediately shut down while an investigation was initiated-and not allowed to rot for another two and a half years: "More than 2-1/2 years later, the allegations exploded into the Bloomberg administration's biggest scandal, exposing years of slack oversight, bungled management and missed opportunities."

And the overseers at the Office of Payroll Administration were incompetent-at best: "Prosecutors say OPA did an internal audit in July 2008 of 31 consultants who were fired the previous year. Nine of them were paid for 890 hours even after they stopped working. "This situation should not have occurred," OPA's audit said - but never probed how or why it did."

And then there are the deaf, dumb and blind folks at DOI: "The whistleblower, who says he will testify under oath, knows of "three other people who went to DOI before I did with complaints of CityTime corruption." He met with two DOI investigators in June 2008, but said they gave him the brush-off. "They were two young girls who were right out of college and knew nothing," the whistleblower said. "They let me talk, but I got the distinct impression they weren't going to do anything." He finally heard from DOI a few months ago, which called him back for an interview that made clear they were probing CityTime."

That's two and one half years later-but DOI defends its crack investigation: "DOI spokesman Diane Struzzi denied the agency ignored the allegations. "No one walked into DOI's offices and laid out this $80 million fraud scheme ... That is preposterous," Struzzi said. "This case was made by determined DOI investigators and auditors who followed the money, uncovering the shell companies, the kickbacks, and the money laundering."

We'll see how this plays out, but we believe that the record will eventually show that the investigation was mounted in a less than expeditious fashion-and that it was slowed by a reticence to blow up CityTime-one of the mayor's signature projects. When it became impossible to ignore, we got the following instructive anecdote: "Bloomberg admitted CityTime was "a disaster" in March 2010, but mistakenly said then-Deputy Mayor Ed Skyler was in charge of fixing it - prompting a shocked look from Skyler."

In reality, the mayor was out to lunch, making his weekly golf outings to Bermuda no longer indulgent chuckling matters-examples of his rich eccentricity. In the hindsight of CityTime, Bermuda excursions can be seen as examples of Bloomberg's laxity in matters of management-raising questions that will no doubt be pursued in a number of other policy areas.

Once the curtain is pulled away, and the great wizard is exposed as simply a little man with an expensive megaphone, no area of this mayoralty will be considered sacrosanct. This is, therefore, the beginning of the end of the Era of Mike Bloomberg.