Sunday, March 27, 2011

Bloomberg, Outsourcing Scandals, and Willets Point

According to Adam Lisberg at the NY Daily News, Mayor Mike Bloomberg hasn't gotten the memo about the need for the city to reduce its use of outside contractors: "Perhaps Mayor Bloomberg didn't get the memo. Literally. On his Friday radio show, he was asked about a new shift in city policy that had been in the newspaper for two days running - and didn't seem to know it had happened. It's a shift on something that had been a sore point for Bloomberg's critics - outside contractors paid six-figure salaries for tech projects that blow deadlines and budgets, like the scandal-ridden CityTime system."

, still operating on Bermuda time, went on to regal the John Gambling audience of about three people about the wonderful benefits of outsourcing: "On the radio, WOR-AM host John Gambling tossed Bloomberg a softball about it. But instead of explaining the new company line on insourcing, the mayor defended outsourcing. "People say, 'Oh, you're spending too much money on outsiders.' If you didn't do that one contract outside, you'd have to have those people permanently on your staff," the mayor said. "The consultants, they say, 'Oh, they charge a lot more.' Well, because that's the business," he continued. "They don't work all the time, so they have to get paid more. And sometimes they have expertise you don't have in-house."

Can this man really be serious? Hasn't he seen how unsupervised outsiders can rip the city off? Lisberg feels that it could be the result of inattention: "Or perhaps it's a sign of something more worrisome, of a third-term mayor who has delegated the nuts and bolts of government to new aides like Goldsmith but isn't paying enough attention to what they're doing. Those who work closely with City Hall - even Bloomberg's allies - have seen signs of third-term drift. His attention is on national and world issues, not day-to-day business like plowing snow or rewriting tech contracts."

In our view, the CityTime scandal indicates that there is great danger in unsupervised outsourcing-and that the reliance on outside consultants when the city lacks the expertise to monitor the quality of their work, can lead to disastrous, and expensively disastrous, results. Case in point: AKRF and its traffic subcontractors URS and Eng Wong Taub.

For years, AKRF has exercised a virtual monopoly over the environmental work in this city-and as we saw with Columbia, often has found itself on both sides of an issue. This is not in the public interest, primarily because the consultant cabal is singing in the Big Real Estate choir-and when they aren't, they are seen busily tailoring their data to the interest of city economic planners. Which, when we come to think of it, is virtually interchangeable with their first allegiance. So, who gets hurt? Why all of the communities and small businesses that aren't given a fair analysis of what kind of impacts a project will have on their quality of life or ability to survive and prosper.

Occasionally the city council wakes up from its narcolepsy-as it did on the Kingsbridge Armory, or with Wal-Mart at Gateway-and asks an honest broker like Brian Ketcham for a second opinion. When that happens, we get a rare glimpse of just how dishonest the monopolists at AKRF really are.

Of course, the severe consequences of the city's reliance on this team of self servers at AKRF has been revealed in the ongoing fiasco over Van Wyck ramps at our own Iron Triangle home. Crain's honed in on the situation early last year: "The original environmental impact statement, or EIS, showed the massive Willets Point project would generate heavy traffic, but a recent report on the proposed ramps showed a much sunnier picture. The ramp study—an “access modification report,” or AMR, which is technical documentation to support federal and state decisions on whether to approve the ramps—is being redone after Mr. Ketcham used traffic data from the environmental impact statement to demonstrate that the ramps would make a bad situation worse. The entire redevelopment, with 9 million buildable square feet, is projected to generate 80,000 vehicle trips daily."

Simply put, the AKRF team-not expecting any independent review of their work-fudged the data to diminish the projected traffic impact on the Van Wyck. And the two traffic reports-one for the original EIS and the other for the AMR-flatly contradicted each other. How could that happen, other than because of conscious fraud, if the general contractor on both projects was none other than AKRF.

As a result of the fraud, and the curative intervention of WPU's Ketcham to call it out for SDOT, EDC was forced to revise the AMR-and went right back to the fraudsters to do the work!

But check out the comments of EDC on how expeditious this process would be: "“We will be submitting a revised draft in the upcoming weeks that is responsive to the comments and issues raised by state DOT and the Federal Highway Administration, as well as those from Willets Point opponents,” said David Lombino, a spokesman for the Bloomberg administration’s Economic Development Corp., the lead agency on Willets Point...Mr. Lombino says no significant delay is expected."

The Crain's story was in February of last year-indicating that the Lombino observation was a tad optimistic. But what of the millions of dollars of additional expense here because of consultant error-not to mention the potential fraud against the interests of the members of WPU? Shouldn't Comptroller Liu be on top of this outsourcing scandal as well?

And considering that now EDC is trying to avoid ramp review entirely, shouldn't the comptroller be looking to lock arms with the new attorney general and put a halt to all of this malfeasance?

The use of unsupervised and corrupt outsourcing is, therefore, not a simple one time-or CityTime, as it were-occurrence. A pattern of unethical and corrupt behavior is at the core of the entire Willets Point development as well.

, for his part, sees the mayor's legacy as in flux: " On TV, on the radio and in the newspaper, the signs are clear for Bloomberg that his legacy as mayor is still unfinished and the ending is very much in flux." But it is Willets Point that is viewed as the Bloomberg legacy project.

Given all that has gone on here, the illegal lobbying, the corruption of data, and the lying to the city council and the courts, Willets Point is currently the perfect Bloomberg legacy, one that dramatizes the extent to which he has consistently disregarded the public interest in the service of his cohort of billionaire real estate moguls.