NYC's Computer-System Cash-Dump Disaster

New York City threw away a mountain of cash over a new computer system. Now, finally, someone is going to pay.

NYC's Computer-System Cash-Dump Disaster
Photo-Illustration by Andrea Levy

In January 2009, a tantalizing and disturbing comment materialized on an Internet bulletin board about an expensive and controversial Bloomberg administration project to automate the city's payroll system, known as CityTime.

The anonymous author alleged that the project was hopelessly corrupt and out of control and had been for years. The writer, who claimed to have been employed on the project, went on to name three people he alleged were responsible for that corruption.

The commenter accused a consultant, Mark Mazer, of being "the most crooked person on the team," and said consultant Scott Berger was building a home in Florida at city expense.

Living the good life: CityTime’s
former overseer, Joel Bondy
Photo from Bondy’s Facebook page
Living the good life: CityTime’s former overseer, Joel Bondy

"Mark Mazer and Scott had ONLY one main intent . . . to pocket the $/hr for themselves for as long as possible @ taxpayer expense," the commenter wrote. Referring to the former consultant later appointed to oversee the project, the commenter added, "The project in its 5th year was a failure and should have been canned, but Joel Bondy for some reason or another decided it must go on for another 5 yrs."

The comment went on to lay out in more or less clear terms exactly what was taking place in the CityTime project.

That posting appears to have disappeared into the depths of the Internet, but it turned out to be prescient.

Berger, who worked for a CityTime consultant called Spherion, Mazer, and four other people were indicted last month for defrauding the city of $80 million—a theft that made the Mafia's $6 million Lufthansa heist in 1978 look like a bodega stickup job.

Supposedly acting as "quality assurance" consultants, Mazer, Berger, and their accomplices are instead accused of falsifying payments to shell companies, pocketing the proceeds, and making up phony time cards for work they never performed. The defendants have pleaded not guilty.

Bondy, meanwhile, was suspended without pay following the indictments and forced to resign as the head of Bloomberg's Office of Payroll Administration. He could face indictment as well. Bondy, it emerged, not only was a former CityTime consultant, but had also worked with Mazer in the past, yet he didn't disclose those ties until years later.

Originally slated in 1998 to cost $63 million over five years, CityTime has cost the city more than $760 million over its 12 beleaguered years of existence. Despite all that expense, the system is operating in only about a third of all city agencies.

The cost overruns were caused by the vast complexity of the project and changes to the plans, claim Bloomberg officials and the company responsible for building the system, Virginia-based Science Applications International Corp.

Nonsense, says a union official who represents city architects and engineers, and has closely tracked the project.

"There's no way that any problems or changes they had could justify a cost increase of more than 10 times," says Local 375 vice president Jon Forster, who believes SAIC should face criminal investigation. "In 12 years, we haven't changed the number of agencies or the number of employees. My sense is that someone saw a gravy train here, and they said, 'Let's go for it.' "

Last week, federal prosecutors issued subpoenas to SAIC for documents related to the project—presumably to determine just what happened to all that money. There are, records show, a couple hundred other consultants on the project, and you have to wonder what they were doing.

But even after a year of revelations about CityTime, a lot of questions remain unanswered: How much money was wasted or stolen? How did this happen, in spite of red flags dating back to at least early 2003? And how did the city miss it for so long?

Mayor Bloomberg's comments on the scandal have been less than satisfying. Over the years, for one, his administration lowballed the true total cost of the project. And so far he has yet to offer a coherent explanation of how CityTime went bad. It didn't happen by accident, as the mayor appeared to suggest in some of his comments, especially when he called it a "disaster."

The definition of "disaster" generally includes a component of misfortune—as if the project was beset with bad luck. But in this case, there was intent. The indictment makes that clear enough.

In saying he wished he spent more time with the project, Bloomberg appeared out of touch, which is fairly disturbing for a man who cloaks himself as a great manager and technology expert.

He also suggested that the city's trust had been "misplaced." It was almost as if he was characterizing city government as a lover shocked to find out his spouse had cheated on him. The credo "Trust, but verify" comes to mind.

In December, once again seeking to minimize the scandal, he said, "Nothing goes without some problems, whether it's in your family, your company, your government, [or] the world."

Moreover, throughout his administration, Bloomberg repeatedly cut agencies, shrunk city staff, and recited this mantra: "We have to do more with less." But on the CityTime project, he or his aides appeared to have decided it was OK to do less with more.

And for that matter, what does it say about the city comptroller's office, which also had an oversight role on the payroll agency?

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