Disturbing findings that a respected nonprofit falsified employment data it provided to the city led to a flare-up between two of Mayor Bloomberg’s top aides, The Post has learned.
Sources said Deputy Mayors Robert Steel and Linda Gibbs clashed over whether to immediately yank the contracts of SEEDCO, a well-established and highly regarded provider, after a searing report by the Department of Investigation determined that as many as 1,400 of 6,500 job placements claimed by the agency were fraudulent.
“Steel wanted them gone — he felt pretty strongly about this,” said one source. “Gibbs argued this was an aberration.”
The source said voices were raised during the discussion, which ended with SEEDCO summarily losing $22.2 million worth of Department of Small Business Services contracts that were found to be tainted.
Other contracts valued at more than $20 million with the Human Resources Administration and the mayor’s Center for Economic Opportunity weren’t touched.
Steel said his discussion with Gibbs, who was honored at a SEEDCO event last year, was cordial and he dismissed one source’s account of it as heated.
“I’m not a heated guy,” he said in a brief conversation at a Midtown conference. “You’ve never seen me heated.”
When asked about his run-in with Gibbs, he said he was focused on continuing the services that had been provided by SEEDCO so the city could achieve another record number of jobs for its residents.
Steel also said he had no problem with the HRA and CEO contracts, which are part of Gibbs’ portfolio and weren’t included in the investigation.
Mayoral spokeswoman Julie Wood said the city examined SEEDCO’s remaining contracts closely “and found that since they involved entirely different work and different personnel, they should continue delivering these important services for the length of the contracts.”
That won’t be long.
The CEO deal ended last month; the one with HRA is up in June.