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It’s about time.
Mayor Bloomberg launched a frontal assault yesterday on the prime contractor of the CityTime payroll system, demanding the return of the entire $600 million it received over the past decade on a project prosecutors charge was rife with corruption on an epic scale.
“While we have received a working system that will advance our management ability . . . because the project was apparently tainted by fraud and kickback schemes, the city must be made whole,” Bloomberg notified Walter Havenstein, CEO of Science Applications International Corp.
He called for a full refund — plus “the cost of investigating and remediating this matter.”
The mayor pointed out that SAIC, as early as 2005, received a whistleblower complaint about possible mismanagement and alleged kickbacks to its lead project manager, Gerard Denault, who has since been indicted for fraud, conspiracy and obstruction of justice.
“It is unclear what SAIC did at that time to investigate these serious allegations,” the mayor said.
The end of Bloomberg’s blunt, four-paragraph letter gave SAIC something more to think about.
“I am forwarding this correspondence to the United States Attorney so that the city’s position as a victim can be taken into consideration,” the mayor said.
US Attorney Preet Bharara has indicted 11 individuals and one corporation in the scandal, which involves hundreds of contractors, systemic overbilling and an international money-laundering conspiracy. He has seized more than $38 million from 100 bank accounts.
One of the nation’s largest defense contractors, SAIC immediately offered to discuss an “appropriate resolution.”
“SAIC understands and shares the outrage expressed by the city at the fraud alleged on the part of our employees and subcontractors on the CityTime program,” a company statement read.
City Councilwoman Letitia James (D-Brooklyn), one of the earliest critics of CityTime, applauded Bloomberg for making “the right decision demanding a refunding for this thief’s buffet.”
“I regret that he did not move to address CityTime corruption when it first became apparent,” she said.
When James held hearings in 2008 and 2009, administration officials vigorously defended the mounting bills for CityTime that could reach $760 million.
Even after the first wave of indictments last December, the mayor emphasized that the system — unlike some other major software overhauls — actually worked and would put 163,000 of the city’s 300,000 employees on computerized time sheets.
Last Friday, on his radio show, Bloomberg noted that one reason costs escalated was “mission creep,” a reference to agencies that kept asking for upgrades along the way.
Comptroller John Liu, another early critic, was conciliatory.
“The mayor is spot on this time,” he said. “It’s time to recoup the money for our taxpayers.”
Management of the completed system is being transferred from outside consultants to city employees.