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.

In January of last year, Gonzalez reported that a tech consultant who used to work for the city got millions from CityTime while running a full-time lobbying firm.

Public pressure began to take hold, and the story started to move forward rapidly.

In February, Liu rejected an $8 million Spherion contract, and launched an audit of CityTime. The budget was now $722 million. He called on the mayor to freeze all contracts, calling it a "money pit."

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

In March, Bloomberg made his admission that the project was a "disaster," but insisted such projects were rarely successful. A few days later, he said he wished he had "focused on it more."

On March 26, Gonzalez reported that the CityTime project manager made $650,000 in 2009, and there were 39 other people making at least $500,000 a year. He noted that the city laid off 510 public school aides to save $12 million, while earmarking $24 million to pay CityTime consultants.

"How can anyone justify firing $18,000-a-year school aides while hiring half-a-million-dollar computer geeks who can't even deliver a good product?" Gonzalez wondered.

But Bloomberg's people continued to defend the need for the project and granted it an extension through September.

In June, the DOI investigation began, with that complaint from the consultant paid by a company not approved to work on the project.

By last August, Bloomberg and Liu were sparring over the contract. Liu didn't want to approve another $176 million in spending; Bloomberg was threatening to withhold paychecks.

The city Independent Budget Office reported then that $641 million in capital funds were either spent or planned, along with $232 million in spent and planned operating funds. That added up to more than $873 million.

Last September, Liu refused to pay $32 million to SAIC until next June unless the company finished the project by then. Finally, there was a penalty attached to missing a deadline: $3 million per month.

The indictments came down on December 15. The six defendants were released on bail. Authorities seized some $850,000 from safety deposit boxes.

Bondy was suspended the following day and resigned three days before Christmas. The Spherion contract was suspended. The Department of Education suspended a separate Spherion contract. Bloomberg ordered a review of technology projects.

The state comptroller jumped on the bandwagon, rejecting an SAIC contract. And now, with the federal and city investigations still ongoing, more indictments could be coming. But taxpayers have already paid for everyone else's mistakes, inattention, and misbehavior.

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