Want to Work for Mike Bloomberg? What's Your Batting Average?

Softball, campaign promises, and the miserable minority-contracting record of the Bloomberg administration

Mayor Michael Bloomberg's most remarkable political achievement was winning half of the black vote and a third of the Hispanic vote in 2005 as a white Republican running against Fernando Ferrer, the first Latino ever nominated by a major party for any citywide office.

Nothing like it had ever happened before in a town where race and party are as linked as Bloomberg and bucks, and the mayor spent millions chasing what the media kept calling "minorities"—though, for the first time in that election, whites were less than half of the city electorate. As Congressman Charlie Rangel put it the day after the election, Bloomberg "breaks all the rules" and "appears to be able to appeal to people regardless of their color."

Rangel never formally endorsed the mayor, but he did appear at two pre-election press conferences with him, boosting a new City Hall program designed to recruit black and Hispanic apprentices into the construction trades. Bloomberg's Commission of Construction Opportunity was one of two ballyhooed initiatives targeting minorities that were announced in the glare of the re-election campaign. The other one was an executive order creating a new Minority and Women Business Enterprise (MWBE) program, which Bloomberg signed with black endorsers like Queens Borough President Helen Marshall and State Senator Malcolm Smith at his side.

Robert Walsh, who has run SBS since Bloomberg took office, hasn’t had a single meeting with the mayor to discuss the MWBE program since the new law went into effect in late 2005.
Frances M. Roberts
Robert Walsh, who has run SBS since Bloomberg took office, hasn’t had a single meeting with the mayor to discuss the MWBE program since the new law went into effect in late 2005.
Brooklyn councilwoman Letitia James calls the mayor’s minority-contracting initiative nothing but “a press release.”
Richard B. Levine
Brooklyn councilwoman Letitia James calls the mayor’s minority-contracting initiative nothing but “a press release.”

These signature programs—touted in the campaign's radio and television ads—have since disappeared from both the public's consciousness and the mayor's agenda. Bloomberg issued a "Campaign Accountability Report" last year, claiming success in 96 of the 100 promises he'd made in 2005. That list of campaign pledges did not include the MWBE or construction- apprenticeship initiatives. Stu Loeser, the mayor's press secretary, tells the Voice that both programs, though announced in the closing weeks of the campaign, were "government" initiatives unveiled at City Hall, "not campaign promises." Ironically, the one element of the mayor's 10-point construction plan that has been fully achieved—the creation of the new High School for Construction Trades, Engineering and Architectureis listed as a promise in the accountability report. Loeser says that's because the mayor had separately referred to the school at a campaign event a week after the overall construction plan was announced.

While Bloomberg's sensitive handling of the Sean Bell shooting and other police-abuse cases are commendable milestones in his two-term tenure, the meager results of his minority hiring and contracting initiatives suggest that, with just a year and a half to go, his legacy on racial-justice issues will be tough to square with the record-setting minority vote that re-elected him.

After election day, the implementation of both initiatives was immediately relegated to an obscure city agency called the Department of Small Business Services (SBS)—which had, surprisingly, more blacks at the top under Rudy Giuliani than it does today under Mike Bloomberg. Once run by a series of four consecutive black commissioners and other minority deputies, its table of organization now lists white employees in virtually every top position; the sole exception is Larry Scott Blackmon, a former aide to Rangel who worked in the 2005 Bloomberg campaign. Though the SBS website says that Blackmon, a 33-year-old political operative who once ran the MWBE program for the planned New York Jets stadium, "is responsible for overseeing" the construction-opportunity commission and "works closely" with another deputy on MWBE, he doesn't supervise either. In fact, except for noticeable growth in both construction apprenticeships and city contracts for non-minority women, it's not clear that anyone at SBS has been actively making good on these campaign promises.


Ferrer, who dropped out of politics and now works for a private public-relations firm, tells the Voice that these programs "are only successful in the eyes of the initiator." The former Bronx borough president insists that "if it were anyone else, there would be much more accountability on these promises," and he also decries the media "quiescence" that has selectively protected the Bloomberg administration. "I have never seen it so still," he says, contrasting the media's lack of penetrating questions about Bloomberg's second-term record with the coverage of his three immediate predecessors: Giuliani, David Dinkins, and Ed Koch.

Councilman James Sanders, who crossed party lines to endorse Bloomberg in 2005 after discussions with the mayor's aides about an MWBE program "with teeth," says he feels betrayed. "We should all cry about the impact of the executive order," he tells the Voice. "I'm growing to believe that there wasn't an honest spirit."

Sanders says he raised the issue of minority contracting in the first conversation he ever had with the mayor, in 2002, as well as several times since then. As chair of the City Council's economic-development committee, he became the prime sponsor of the council's MWBE bill, Local Law 129, "because a minority company could do better in Selma, Alabama, than in New York City." But Sanders now believes that "we are further segmenting the city" by failing to use the law he drafted—and which Bloomberg signed, a few weeks after the 2005 election—to integrate the city's business community. (Bloomberg, who also endorsed Sanders, carried his black middle-class district in Queens by thousands of votes.)

Letitia James, the Brooklyn councilwoman who chairs the contracts committee that oversees SBS, offered a similar critique of the apprenticeship initiative: "I don't know what it's about. It's not real. It was a press release."

Robert Walsh, who has run SBS since Bloomberg took office, conceded during a three-hour Voice interview that he hasn't had a single meeting with the mayor to discuss the MWBE program since the new law went into effect in late 2005. He also acknowledged that, from the beginning of the administration, his conversations with Bloomberg about aiding small businesses "had not been focused on gender or race." Asked if they'd ever had a conversation in which Bloomberg gave him "a sense of how important an MWBE program was to him," Walsh replied: "I don't want to put words in anybody's mouth. I can't remember a conversation like that."

Bloomberg also never asked about the progress in finding minority construction apprentices. Not that anyone would've had answers—Walsh and his first deputy, Andrew Schwartz, couldn't answer any of the Voice's questions about minority apprentices, jobs, or work sites during the interview. "I didn't design the program . . . the first year, we didn't hit our goals . . . I don't know the breakdown," Walsh stammered, though he'd been told weeks before the interview that it was a focus of our story. "There is a lot we need to do on improving it." Pitched as a program for minorities when it was first unveiled during the campaign, the actual terms of the race-neutral and gender-conscious program require setting aside 10 percent of the apprentice slots for women, 5 percent for the "economically disadvantaged," other slots for veterans and public-housing residents, and none explicitly for minorities.


Two weeks after the Voice interview, SBS finally came up with the embarrassing numbers: 72 of the "economically disadvantaged" apprentices who entered the program over the course of nearly three years and are still working today are black. (SBS said it had no data on the number of black apprentices retained for "a comparable time period" before the program was launched.) According to what the administration told a City Council committee, over the three-year period ending this month, up to 1,500 of the 3,900 apprentice slots in the city would have been set aside for underrepresented workers of various kinds, and SBS now admits that it was counting on many more economically disadvantaged blacks in that mix.

A knowledgeable SBS source told the Voice that the construction trades had, at one point, offered 100 open slots, and the city couldn't identify apprentices to fill them. David Jones, whose Community Service Society analysis of the city's exclusionary construction trades prompted Rangel "to pick up the phone and call the mayor directly about this," sits on the mayor's commission, but concedes that "we have rather modest movement." Contrasting Bloomberg's program with a more successful one in Washington, D.C., Jones said: "There is some question about the exercise of will here. I start frothing at the mouth—there's nothing like this anywhere else in the country. This is appalling."

It should have come as no surprise to Bloomberg that a country-club agency like SBS hasn't proven a nurturing home for these minority-assistance programs. SBS, which has a $145 million budget and 265-member staff, is largely devoted to what it calls "business-driven" workforce and financial-bridging initiatives for small and large firms. Walsh, who co-founded the city's first Business Improvement District years ago, has expanded BID services—which consume another $78 million—since taking over as head of SBS. He's also been preoccupied with jump-starting a host of new corporate-welfare programs touted by the Harvard Business School. Tied to the city's quasi-private Economic Development Corporation, Walsh's SBS has even found rationales for subsidizing companies like Tiffany's (to retrain a handful of employees), and has taken credit for placing 50,000 people in jobs with employers from IHOP to Whole Foods—jobs that those employers would've had no trouble filling on their own.

Walsh's other fixation—highlighted in a glossy, full-color tabloid called Spotlight—is the agency's softball team, for which he's the starting pitcher. A dozen current and former staffers, many of whom asked not to be identified, say that hiring and promotions can depend as much on batting average and after-hours schmoozing as on job performance. Walsh is even said to scan the Internet for local college stars to recruit to the agency, and has asked job applicants about their ball-playing skills. He has also reported on the team in his biweekly memos to Bloomberg, describing his decision to join a league that includes Standard & Poor's, the FBI, and other New York City agencies as "taking a page" from the section on "teamwork and getting employees out of the office" in Bloomberg by Bloomberg, the mayor's memoir.

With the agency now packed at the top with young Ivy Leaguers in the preliminary stages of their corporate careers, the executives setting the agenda can't see a future for themselves either in placing a city furniture order with a Latino vendor or installing a black apprentice at the Yankee Stadium construction site. But other city agencies have been known to quake in their cleats at the prospect of facing SBS on the diamond.

Bloomberg has been anything but a champion of inclusion at the top levels of his own government. As Councilwoman James observes: "But for Deputy Mayor Dennis Walcott, what other person of black or Hispanic ancestry is there on the executive level?"


In 2006 (the latest full year for which statistics are available), only 8 percent of the 203 administrators and managers in the mayor's office—the two top ranks in the city's Equal Employment Opportunity filings—were black. Even Rudy Giuliani managed 10 percent. (Bloomberg's Hispanic hires, however, are slightly ahead of Giuliani's.)

Ironically, SBS was the only black- majority Giuliani agency (59 percent) when Bloomberg and Walsh took over; by 2006, it had dropped to 39 percent. Black administrators and managers at SBS have dipped from 37 percent at the end of Giuliani's term to 26 percent in 2006. Merged in 2004 with the Department of Employment—a Hispanic-run agency under Giuliani—SBS had only four Hispanics among its 68 top-tier employees in 2006, and half as many as Asians. (Walsh has recently hired an MWBE deputy who is half-Mexican.)

Several current and former black staffers have told the Voice about Walsh's insensitivity, as well as his "exclusive comfort level with highly educated white professionals." Donald Jackson, a 20-year city professional with a deep human-resources résumé, was hired by Walsh in 2004 as his HR director. He says that the merger with DOE—a very unionized city agency—forced Walsh to look for someone familiar with civil-service and union rules. Jackson left in 2007, after suffering through what he called "a daily torment of comments and innuendo—a demeaning, horrible atmosphere." He says that Walsh "wasn't comfortable with me as the face of the agency," and that another top minority manager told him that Walsh referred to him as his "whipping boy"—a charge that Walsh adamantly denies, though a half-dozen sources at the agency told the Voice they'd heard about the alleged comment. SBS acknowledges that Walsh "leaned heavily on his human-resources department" and "pushed his staff hard," but insisted this had "nothing to do with race."

Jackson listed one black employee after another who left the agency, dismayed by "an environment so hostile, they couldn't take it any longer." SBS calls this charge "preposterous," insisting that four black managers who were at the agency when Walsh arrived are still there, though the Voice reached out to 11 others who had come and gone (and even some who are still there) and repeatedly found echoes of Jackson's complaint. Jackson recounted the story—as did many others—of the departure of onetime assistant commissioner Michael Smith, who was berated by Walsh for hanging African-American art in the headquarters lobby for Black History Month. "He totally annihilated the man and told him to go home," recalled Jackson. "He was screaming and yelling that he didn't want more nails in the wall. [Smith] didn't get fired that day, but that was the beginning of the end." Reached by the Voice and asked about the Black History Month art controversy, Smith said: "You guys have really been talking to people." Then he refused to answer any questions.

Smith stayed at the agency for more than a year after the incident, resigning after Walsh identified apparent shortcomings in his handling of the BID program. Councilwoman James was so outraged in 2006 about the simultaneous departure of Smith and another top black manager that she raised the issue at a budget hearing, calling it "alarming" and demanding that Walsh explain why "your two highest- ranking African-Americans are no longer there." (James has since made peace with Walsh.) "Alarming" was also the word that Alfred Milton, an associate director of the MWBE program at SBS, used in a 2007 EEO complaint to describe "the lack of mobility" for black men "under Commissioner Walsh's leadership." (Milton's complaint is now pending before the State Division of Human Rights.) Another leading black official at SBS, Tim Johnson, went to see Deputy Commissioner Schwartz at one point, according to several sources at the agency, and complained that he'd been bypassed for a promotion—and that the job had gone to a younger white employee with far less experience. SBS ultimately agreed to raise his salary to equal that of the white applicant it had hired, but Johnson, too, would soon be gone. Johnson, who is now with the United Way, declined to comment, but SBS didn't deny this chronology, saying only that Johnson did receive other promotions.


For his part, Donald Jackson, the former HR director, was replaced by Spencer Cronk, a 28-year-old white policy analyst without any human-resources experience, as well as a black outside consultant. The consultant was given a six-figure contract but soon departed herself, leaving the entire job to Cronk, who was given a nearly $30,000 raise. Minorities are rankled by the salaries and promotions given to Walsh insiders like Cronk and Michael Borden, a former campaign aide to Andrew Cuomo who jogs with Walsh, house-sits for him, and plays on the softball team. Borden has received $58,000 in salary hikes since joining the agency three years ago, and now is paid $108,414.

Borden and Blackmon aren't the only politically connected hires. David Margalit, a Harvard Business School grad who worked in the Bloomberg campaign, was referred by the mayor's office, Walsh acknowledges, as was Chris Dorrian, the brother-in-law of Tony Carbonetti, Giuliani's mayoral chief of staff, current business partner, and the manager of his recent presidential campaign. Dorrian, whose family owns bars connected to two of the most explosive murder cases in recent decades (the so-called "preppie murder" of Jennifer Levin in 1986 and the slaying of Imette St. Guillen in 2006), is a Walsh favorite who manages the softball team and hosts it occasionally at a family pub. It's this "frat-boy" crew, as some call it, that irritates outsiders—many of them minorities—at the agency.

The Mayor's Office of Contracts has submitted two reports to the City Council tracking the first year and a half of contract awards to MWBEs under SBS's new program. Both reports conceded that "the data does not yet reflect the levels of MWBE participation the City is aiming to achieve."

In fact, the percentage of contracts, by dollar value, going to Hispanic firms hit zero in 10 of 13 categories (such as "construction, $5,000 to $100,000") for the first half of fiscal year 2008, and zero in nine categories for black firms. On the other hand, non-minority women got zero dollars in a single category, and Asians in four. For blacks, the percentage declined in five categories compared with FY 2007, rose in one, and remained the same in seven—hardly an indication of progress. In the first six months of the current year, firms owned by non-minority women won $116 million in total contracts, while blacks won $7.8 million and Hispanics $5.1 million. In the first half of 2008, women-owned firms were awarded contracts valued at twice the amount for all of 2007, while black and Latino firms were on pace to earn just about as much as they did the year before.

There are a series of stark anomalies inside these numbers. Blacks received no prime contracts in construction in FY 2008; Asians got $19 million, women $13 million, and Hispanics $3.2 million. In 2007, women and Asians combined for $53 million in construction contracts; Hispanics received $5.3 million, and blacks got $550,020. Women-owned firms sold $11.4 million in goods to city agencies in the current fiscal year; the number for Hispanics is $987,143, and for blacks, $715,360. Even in the category of "micropurchases" (i.e., less than $5,000), women-owned companies received almost as much business as the combined totals for black- and Hispanic-owned firms. Hispanic firms got no subcontracts in construction and professional services, while blacks did a minuscule $2.6 million.


Walsh prefers to talk about how many more MWBE firms have been certified, though that's no measure of a program that's supposed to deliver contracts. He's also claimed in memos to the mayor that $152 million in MWBE contracts have been awarded, but women- and Asian-owned firms are reaping the overwhelming majority of those contracts. And very few of the contracts that Walsh is citing were actually awarded as part of the city's MWBE program, which is limited by LL 129 to contracts of $1 million or less. But the mayor's contract office cites these larger contracts—like a recent $83.2 million service contract—in its reports to the council anyway, though the new law has nothing to do with them. Without these giant awards, the MWBE numbers would be too dreadful to disclose.

But even those big MWBE wins went from a paltry 1.2 percent of all contracts above $1 million to a still-paltry 2.4 percent. As quick as the administration has been to note that rise in its reports to the City Council, it cites no figure for the growth of contracts below $1 million, which is the only real measure of whether the city is moving toward the contracting goals established under the law that Bloomberg actually signed. That's why, when asked in a separate phone interview if Bloomberg might be out of office before a goal-based MWBE program is "fully up and running," Walsh said matter-of-factly: "Yes, we will be." A few days after that interview, at a May 12 council hearing, Walsh announced a renewed determination to get the MWBE effort going, declaring that "over the next year and a half, my focus will be on helping MWBE firms be better prepared to bid on and win more contracts," and sounding as if the failings so far were attributable to the minority companies themselves.

The snail's pace of MWBE progress is partly a result of the Bloomberg administration's failure to complete a court-mandated study to determine whether a disparity exists between the number of available minority vendors and the city contracts they receive. The City Council released its own disparity study in 2005, and it was the council's San Francisco–based consultant who limited the provable discriminatory impact to contracts under $1 million. The study found that while many minority-owned firms might not have the capacity to perform on larger contracts, they could perform on smaller ones—and yet they still weren't getting their fair share. Walsh dismissed this study as "flawed" in a Voice interview, claiming that it contained sections from an earlier study done for another city, and also that it low-balled the impact on Asian and Latino firms. This is why the administration insisted on an updated study—and when Local Law 129 passed in 2005, it called for two more, one in 2007 and another in 2009.

However, SBS took almost a year to award the contract for the studies, leaving too little time for the research firm that it hired to complete the first phase by the April 2007 deadline. Walsh's deputy, Andrew Schwartz, acknowledges that the study "has been delayed on our side." And so SBS has decided to move on to the Phase II report, which is due a few months before Bloomberg's departure—virtually guaranteeing that the establishment of an enforceable program will be a challenge waiting for the next mayor. Candidates to replace Bloomberg may wind up making the same promises he did.

The new law gives SBS numerous enforcement powers to compel other agencies to increase minority contracting, but SBS hasn't taken advantage of them. However, the agency doesn't blame the lack of a disparity study for that reluctance. If it needed to, SBS says, it could defend a crackdown on the basis of the council's disparity findings. But those are the same findings that Walsh, the head of SBS, has publicly criticized— and any company that's denied a city contract in favor of a minority contractor will no doubt zero in on that contradiction in litigation. So whom is SBS trying to kid?

Sanders, who negotiated the bill with several offices of Bloomberg's administration, insists that Walsh "had trouble" with the new law "before he even saw it" and "was pushed into this by the administration." He contends that the failure of SBS "to enforce the rule of law and economic justice as far as MWBEs are concerned is at best a dereliction of duty, and at worst a failure of character." James is kinder to Walsh, saying only that "there was a period where SBS had to ramp up, and I don't know if they are there yet completely, and we've given them some leeway to come into compliance with this law." Both are dismayed by the administration's handling of the new disparity study, with James noting that it was "the administration that decided it was necessary," adding that the failure to produce a "timely" second one "is a concern."


But the Bloomberg administration hasn't only failed at the tough question of enforcement; even its simple promotional efforts have flopped. James has been doing a five-borough tour with SBS to try to get minority contractors and procurement officers from city agencies together for the last six months, but she says that seven or eight of the biggest contracting agencies have never attended, forcing her to complain to City Hall. The program has had two directors since 2005—the first was allowed to run it from Westchester while on partial leave for seven months, and the second has no background in minority contracting.

In fact, Walsh has been so disinterested in the program that when Public Advocate Betsy Gotbaum produced a damaging 26-page report on "Problems with the City's MWBE Program" last July, he didn't even bother to respond. The report concluded that SBS was "not effective in certifying MWBEs or helping them gain more opportunities to compete for city contracts," noting that it was "nowhere close" to the goals set forth in the council's law. Walsh did refer to the report in his August 9, 2007, memo to the mayor, branding it "distorted" and claiming that he'd "drafted a point by point rebuttal." But he didn't send a response for nine months. When the Voice began inquiring about it and Gotbaum personally wrote a follow-up letter, Walsh finally answered her, citing several agency actions that, as Susie Han, the author of the Public Advocate's study, put it, "were already done" before the study was released. Reminded that he'd told the mayor that he'd drafted a "point by point rebuttal" of the study months earlier, Walsh sheepishly conceded, "Apparently I did," referring to the memo to the mayor, and "I guess I did not," on the question of whether he ever did send that rebuttal.

Though Walsh has struck out on these minority-contracting initiatives, he loves to pitch SBS's business-service programs—even if they appear to fly in the face of Bloomberg's repeated boasts that he has "essentially ended corporate welfare as we know it." Having branded the tax incentives long offered to city businesses as "bribes," Bloomberg claimed twice in his campaign accountability report for the 2001 mayoral race that, as mayor, he'd instituted policies to put the squeeze on corporate giveaways.

Yet SBS has awarded nearly $5 million in "Business Solutions Training Funds" since 2005—giving, for example, Tiffany's $9,350 to educate 10 retail clerks in English as a second language. Walsh concedes that the agency doesn't consider profit margins or labor conditions when it makes these grants. As a result, highly profitable companies that service the rich—and that can presumably afford to train their own workers—have collected subsidies far grander than Tiffany's.


Georgina Bloomberg, the mayor's 25-year-old daughter—described as "one of the most successful equestrians currently competing on the Grand Prix circuit"—buys her riding boots at Der-Dau Custom-Made Boots & Shoes, a Brooklyn company that received a $105,635 SBS grant. Der-Dau president Joseph Der recalls fitting Georgina at horse shows in which she competed, and tells the Voice that she has some of the company's boots in her riding wardrobe. Also a sponsor of major equestrian events, Der says he's met the mayor at some of Georgina's competitions, but both he and the mayor's office agree that Bloomberg did not refer them to SBS. (Bloomberg doesn't remember meeting Der.) Der and SBS both said that a consultant working for the company suggested that it apply for the grant, but neither could identify the consultant. SBS admitted that Der-Dau's per-trainee cost—$10,564 for each of the 10 trainees—was at the "high end" of the applications it had approved, and that only seven of 121 recent applicants got grants. (In addition to its equestrian specialty, Der-Dau sells "Platinum Hip Hop" boots for $5,000, and offers shoes in French calf, ostrich, alligator, sharkskin, and iguana.)

Another company, Renovations by My Home Inc., collected $61,200 from SBS, although it only refurbishes apartments worth more than half a million dollars, specializes in $40,000 bathrooms, and was recently listed among the country's 500 fastest-growing companies. Net-A-Porter, the online fashion company that sells $4,000 Bottega Veneta handbags, $500 Dolce & Gabbana sunglasses, $860 Jade Jagger booty shorts, and once filled a $40,000 dress order, received $78,750 from SBS. (The SBS approval form noted that Net-A-Porter had achieved "100 percent revenue growth over the last year.") Similarly, Ricoh—a $10 billion company providing major automated equipment and electronics—was granted $100,837 to upgrade staff skills before a new multimillion-dollar Oracle software system was installed. (Margalit, who oversees the SBS Business Solutions unit, came to the agency from Oracle.) The Fitch Group, which operates a state-of-the-art reproduction facility for top law firms, collected $21,440. The Pierre Hotel and Les Halles, the French restaurant on Park Avenue, were approved for grants of $11,000 and $55,000, respectively, but decided not to go forward with their projects.

Mana Products, a Queens cosmetics company that manufactures Erno Laszlo mascara and sells a variety of "prestige beauty products" to Saks and Neiman Marcus, got $164,790. Though the Times reported in 1999 that 65 percent of the company's largely Latin and female workforce had signed union cards, Teamster 804 business manager Frank Laquidara tells the Voice that "the owners and management intimidated the hell out of the people that worked there" and blocked unionization. Mana's application projected profitability gains of up to 15 percent due to the training.

Online grocery store FreshDirect, which was awarded a $253,125 grant, last year earned the ire of Comptroller Bill Thompson and Congresswoman Nydia Velázquez, who accused the company of anti-union tactics that created "an environment of fear." FreshDirect notified employees about a federal audit of immigration documents just as they were about to vote on unionization, causing a hundred employees to flee. SBS said it had approved the grant in part because it would "increase profit margins."

Walsh boasted about this "proactive approach to training" in his recent budget presentation at the City Council, claiming that it helped employers to "grow and remain competitive." In fact, there's no requirement that the companies receiving these grants "grow" or hire new workers; there's not even a requirement that they "project wage gains" for more than "half of all trainees." Employers who do promise new hires and promotions, according to SBS records, are reluctant to commit to them even "within a six-month to one-year time frame."

When the program started in 2005, employers had to split the cost of training with the city—but when employers complained about that 50 percent contribution last summer, the agency lowered it to as little as 30 percent. SBS insists that it verifies that employers actually pay their share and deliver whatever salary increases have been promised, but the agency refused to disclose the details to the Voice. Some recipients, like Der-Dau, do their training in-house rather than retain an outside contractor, making it very difficult to calculate the employer's actual contribution. Incredibly, Bloomberg is using city funds he set aside for anti-poverty projects to cover part of the cost of this program.


Another unusual program puts SBS in the role of an employment agency, pre-screening job applicants for new positions that major employers—including JetBlue, Banana Republic, FreshDirect, Whole Foods, Applebee's, and others—are planning to fill. When SBS placed 80 of IHOP's 111 new hires for a downtown Brooklyn pancake house, Walsh boasted in a memo to Bloomberg that the agency had "saved the company time and money," which apparently has become a governmental purpose in Mike Bloomberg's New York. According to Walsh, SBS was also responsible for 350 placements ("the largest-scale recruitment effort ever," as Walsh described it in a 2007 memo to the mayor) at the Whole Foods on the Lower East Side—but only eight of 36 workers at the store randomly interviewed by Voice said they went to SBS centers.

In other words, Walsh is financing career centers all over the city whose primary function is to funnel one person instead of another into a job that an employer is already offering, simply because the first person came to SBS and the second one didn't. Walsh says that his streamlined applicant pool has "made it easier for companies to do business in New York." It has also made it easier for Walsh and Bloomberg to boast that they've placed 50,000 New Yorkers in jobs—a success ratio that SBS loves to compare with the paltry placement numbers the city achieved when it actually tried to train the difficult-to-employ and match them with jobs.

David Fischer of the Center for an Urban Future critiqued this approach at a council hearing this year, calling it a "creaming model" that takes "the people who are most job-ready" and connects them to employers with a "Help Wanted" sign on the door. Julie Shapiro, the senior vice president for a contractor that runs an SBS Workforce Center, testified that "we are serving people who would end up finding jobs on their own." Fischer blames much of this on the federal workforce-funding formula's "crooked game," which demands numbers. And Walsh told the Voice that he agrees: "Fischer is right. You have me thinking about this cherry-picking conversation. Fischer is right that for the longest time, we've ended up chasing numbers. We did it."

These numbers, ironically enough, have been regaled in a course celebrating Bloomberg's economic-development policies at the Harvard Business School, where SBS official David Margalit was once a student of the very same professor who later conducted the case study of SBS. Walsh and a deputy mayor both appeared before the class in April. David Zipper, another former Harvard Business School student, was retained as an SBS consultant while still at Harvard and then hired to run the training-grant project.

Donald Jackson, the former HR director, vividly recalls being summoned by Walsh and told to look for ballplayers: "When it came time to select summer interns, he would go on the Internet and look for college players—and he wanted people based on their baseball stats, not their ability to do the work of the agency," he says. "I would have to call coaches and arrange to schedule information sessions for the kids. He was only looking for one or two players to improve the team's record for that summer. We got several interns that way over the years. Rob was never very subtle about why he hired someone: 'This person is a great outfielder.' "


SBS insists that "Jackson was never instructed to call a coach or recruit players," though it doesn't deny that he did, or that Walsh searched the Internet for players. While insisting that interns were recruited on merit and that only three played ball (the Voice identified five), SBS concedes that Walsh did call one coach. Walsh's message to intern applicants on the SBS website notes how much the agency values "the energy interns bring to the office, be it on an important project or as a great second baseman."

Virtually every one of the dozen agency sources that the Voice spoke to had a softball story similar to Jackson's. One recalled being asked about playing for the team during the entry interview. Another acknowledged the influence of softball, but insisted that it was just one of the social determinants of status and salary within the agency. "Happy hours" were another: Walsh took the current director of the MWBE program (who now plays on the team) to a nearby bar for her first interview. SBS acknowledges that Walsh "often discusses volunteer work, sports, and hobbies as a way of evaluating candidates' communications and interpersonal skills."

That's the most dysfunctional thing about fiefdoms: They create their own values. A bored second-term mayor, flirting with national ambitions, has never understood that integrating the business community and building trades are indispensable prerequisites to truly integrating the city. Handing off these re-election hoaxes to the same agency he relies on for imaginary job-development boasts is the way to get exactly what he wants in both cases: pretense.

The mayor who took his oath of office several months after 9/11 and steered the city deftly through its darkest days is on automatic pilot now, cruising into blessed history. Once a neophyte at politics, these days he is just one more pro­—smugly turning valleys into mountaintops, counting on the faintness of collective memory, and all too certain of his own not entirely deserved acclaim.

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