Inside Job for a Fixer
The city's social services agency awarded contracts worth more than $72,000 to a crooked buildings consultanttwo years after his arrest amid a wide-ranging corruption probe, city finance records show.
Human Resources Administration officials said they hired Ronald Lattanzio's firm, A&E Consultants of NY, Ltd., last August as an expediter to win new permits from another city agencythe Department of Buildings.
The contracts "were for architectural services for the purpose of modifying certificates of occupancy" at HRA facilities, said HRA spokeswoman Debra Sproles.
The giant agency routinely scrutinizes the backgrounds of hundreds of thousands of New Yorkers seeking welfare, Medicaid, and child care, checking for past crimes and potential fraud. But officials told the Voice this week that when they hired Lattanzio they had no idea of his June 1998 arrest for trying to cover up evidence when his office was raided by police detectives and investigators from the Manhattan District Attorney's office. The arrest was reported in the Daily News and The New York Times, which said authorities nabbed Lattanzio as part of a probe into bribery and corruption among building expediters.
No one outside of HRA got a chance to check the contract because agency officials broke the award up into three separate purchase orders. Oversight, including a public hearing and registration by the comptroller's office, is automatically triggered when an award reaches $25,000. Each of the three contracts was for $24,075. As a result, the decision to give Lattanzio the work was kept within the agency. City finance records show that the purchase orders are still in effect, and not due to expire until September 2002.
Lattanzio's hiring was ordered by HRA's Office of General Support Services, which handles construction and facilities management for the agency. Ralph Permahos, the $104,000-a-year deputy administrator who heads the unit, declined to answer questions.
Sproles said HRA followed all of the city's procurement rules in awarding the contract and that other bidders were disqualified because of tax problems. The only reason the award was divided into three parts, she said, was that agency officials wanted to separate the work by borough.
But critics said that agencies often break up contracts as a means to speed them through the system and avoid outside scrutiny.
"This is a classic case of contract splitting," said Councilwoman Kathryn Freed, a Manhattan Democrat who chairs the council's committee on contracts. "The [Giuliani] administration keeps saying it doesn't split up contracts, but our investigations have found they do it all the time," she said. "HRA has been a major violator."
Had they come up for a hearing, Freed said the Lattanzio contracts would have quickly raised questions since they called for paying an outside consultant to handle matters with a sister city agency.
"It was totally inappropriate to hire an outsider. All they had to do was call the buildings commissioner and say we have a problem, or call the deputy mayor. I have never heard of a city agency doing this," said Freed.
Strangely, the work hasn't turned out to be very urgent. Sproles said the agency has yet to pay out any funds under the contract. "We have been busy on other issues that haven't required us to use those contracts," she said.
Law enforcement investigators said they are currently examining the HRA contracts and any possible political influence used to obtain them.
HRA insiders said the agency has made so many structural changes at its buildings around the city that it has had a chronic problem keeping permits in order. Lattanzio, a former assistant buildings commissioner who left the agency in 1986 after he was caught throwing drug parties in his office, advertised himself as an expert in winning permits. But shortly after his arrest, Lattanzio confessed to law enforcement officials that much of his success was due to scams and bribery.
Lattanzio admitted to rigging bids on construction contracts and bribing at least a dozen city officials to get his clients' building projects through the bureaucracy. Among those he said he bribed was Councilman Thomas Ognibene, the influential Queens Republican and political ally of Mayor Giuliani. In addition, Lattanzio acknowledged that he routinely filed plans with the buildings department that had been stamped with the official seal of a retired engineer, even though the engineer never even looked at the plans.
By the time he was hired by HRA, however, Lattanzio was spending more time setting up corrupt officials than expediting building permits.
In an effort to win leniency for his crimes, Lattanzio agreed to cooperate with law enforcement and participate in an undercover sting operation. The sting resulted in indictments last September against eight government officials, including the buildings department's borough commissioner for Queens, who was appointed to his job after Lattanzio and Ognibene recommended him. Ognibene has not been charged, but law enforcement officials said their investigation is continuing. Ognibene did not return calls.
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