Wednesday, March 14, 2012

CM James Commends SAIC’s Return of $500M In Funds to the City of New York

March 14, 2012

Contact: Aja Worthy-Davis at (212) 788-7081

Council Member Letitia James Commends SAIC’s Return of $500M In Funds to the City of New York
Calls on the Administration to Use Funds To Restore Critical Budget Cuts

New York, NY— As we know, the charges against Citytime were outrageous— on December 15, 2010 four Citytime consultants were charged with embezzling $80 million from the City of New York through steering public funds to consulting firms who funneled the money to shell companies controlled by the consultants and their families. By the time federal investigators and the NYC Department of Investigation began looking into the program’s payroll fraud and abuse, the list of crimes became more unbelievable. By February 2011, three upper-level Citytime officials employed by project contractor, Science Applications International Corporation (SAIC) were dismissed from their positions.

And it soon became clear why such steps were taken— two officials soon plead guilty to criminal charges, and SAIC found one senior projects manager erroneously billed overtime hours. In fact, TechnoDyne, one of the largest subcontractors of Citytime, saw its executives flee the country after receiving federal indictments for their crimes. All this brought the number of people allegedly involved in Citytime corruption since last December to a whopping eleven, with federal prosecutors seizing more than $38 million in stolen funds from over 100 bank accounts hidden in international shell companies.

It is no wonder Mayor Bloomberg— on the eve of the expiration of the SAIC contract— rightfully saw fit to demand a $600 million refund from SAIC on behalf of the City of New York! In fact, today SAIC announced it would return $500.4 million in restitution and penalties in relation to Citytime. The settlement also requires that the United States District Attorney’s Office appoint an independent monitor for three years to review SAIC policies and practices.

“I congratulate the US Attorney and the administration for reclaiming these public funds on behalf of the City of New York,” said Council Member Letitia James. “The four years I have spent bringing attention to the mismanagement and unjustifiable costs of Citytime— and the work that has been done by Comptroller John Liu— has been integral to bringing these matters to light. I once called Citytime a ‘thief’s buffet’. Well today, we see that justice has been served. I furthermore hope the administration considers putting these public funds towards restoring the $53 million in cuts made to early childhood education last fiscal year, and the $60 million made in after-school programs.”

Council Member James has been a long-term opponent of the Citytime project, from her tenure of Chair of the Contracts Committee where she held two hearings on the project in 2008 and 2009, respectively. The Citytime disaster was recently described by United States Attorney Preet Bharara as ‘one of the largest and most brazen frauds ever committed against the City.’


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