His Lips Were Sealed

Thompson Failed to Warn Council of Board of Ed Overruns

The media-bullets fired at the Board of Education (BOE) in recent weeks have miraculously missed Bill Thompson, the agency's former president. The fact is, Thompson, who is running for city comptroller, had plenty of warning about the board's mushrooming $2.8 billion construction cost overruns. While still the agency's head, he even ignored a damning report issued by a commission expressly formed to scrutinize the BOE. Despite all these red flags, Thompson simply chose not to act.

In addition to Chancellor Harold Levy and former chancellor Rudy Crew, Thompson was in a key position to alert the City Council and the public to the soaring cost overruns. But during his five years at the helm, there is no indication that Thompson ever took action either to staunch the fiscal hemorrhaging or inform the council.

The Moreland Act Commission—established in January 1999 by Governor George Pataki—warned the board of the rising cost overruns in a May 2000 report. "Thompson, without addressing any of the issues raised, immediately dismissed" their audit, according to the commission's latest report. "Over and over again, beginning literally within minutes of the Report's release, he publicly characterized it as 'bizarre,' 'politically motivated,' and 'a waste of government dollars,' " said the commission. Due to Thompson's negligence, last month the commission took the position that the BOE is "incapable of competently managing the billions of dollars in taxpayer funds it receives for school construction."

Indeed, it is a long-standing problem. The BOE amassed nearly $4 billion in cost overruns under Thompson's leadership. The man hoping to manage all of New York City's finances let $1.1 billion from the previous capital budget slip through his fingers, and topped it off with nearly $3 billion more in spending.

Others at the Board of Ed—including Levy and current president Ninfa Segarra—weren't nearly so nonchalant when the initial report was released. They both publicly acknowledged it and said "many of its findings were troubling and deserved serious consideration," according to the commission. Terri Thomson, who chairs the BOE budget committee, wrote a letter to Levy and Thompson stating that she had "a number of questions and serious concerns" about the Moreland warnings. Though Thomson wrote that "to pass a plan and then not comply with it is very troubling to me," Bill Thompson kept silent.

Not only did he and fellow board members fail to act on these warnings, the BOE admits they already knew of the rising costs in December. Yet the Board of Ed did nothing to inform the council about the deficit during the remaining four months of Thompson's presidency, even during preliminary budget hearings earlier this year. At a July 19 City Council hearing—called specifically to address the overruns in the wake of media outrage—BOE members conceded that neither they nor Thompson ever fessed up. Lamenting the "lack of communication," Council Chairwoman Priscilla Wooten said, "This should never have happened. It's really kind of inexcusable."

Because the BOE locks in a capital budget only once every five years, the City Council relies on them to report projected shortfalls. Speaking before the council, Deputy Chancellor Anthony Shorris excused himself for making a "trade-off" by reporting only the board's operating budget problems, because the capital plan is "a long-term issue, with three years to deal with that problem ahead of us." Yet he confesses, "We probably should have raised [the issue of overruns] earlier."

In an August 3 New York Times column, Edward Wyatt fingered both Thompson and his opponent, Herb Berman, the City Council finance chair, for the budget shortfalls, claiming each "had some responsibility for the board's capital spending and plenty of opportunity to spot problems in it." Still Wyatt and the entire New York media have overlooked the crucial July 19 hearing, which showed that Berman and the entire council were deliberately kept in the dark about the BOE's budgetary woes.

To some, Thompson at least gave the appearance of concern about the cost overruns. At the council meeting, School Construction Authority President Milo Riverso described how Thompson, in early 1998, had "raked [him] over the coals pretty hard [the BOE] claiming that the SCA did not give them good information." So Riverso ordered that two computers be installed in Thompson's suite to provide information on the SCA's progress, with accurate financial data on a project-by-project basis. Yet more than three years later, the computers "were never accessed" by Thompson or any other staffer, Riverso testified.

Thompson's spokeswoman told the New York Post last month that "the modem never worked properly." But according to SCA spokesman Dan McCormack, Caroline Peoples, executive assistant to the Board of Ed secretary, and Director of Operations Melissa Michalski "signed a work ticket that they had successfully accessed the data before the contractor who installed them left." And the SCA received "no work forms from that date for any help." There was simply "no indication anyone ever logged in," said McCormack.

 
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