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New York

Feds bust 70 public housing supers over $2M in kickbacks

NYCHA supers pocketed millions in bribes on no-bid contracts

Feds Bust 70 NYCHA Supers Over $2M in Kickbacks

(Photo Illustration by The Real Deal with Getty)

Dozens of current and former superintendents with the New York City Housing Authority were arrested on Tuesday morning in the largest single-day federal bribery takedown in the Justice Department’s history.

Agents from the city’s Department of Investigation, Homeland Security and the office of the Inspector General for Housing and Urban Development apprehended 66 of the 70 workers charged, the New York Post reported. Some arrests were made at NYCHA developments, but apprehensions were also made in other states, including New Jersey, Connecticut and North Carolina.

The superintendents allegedly took advantage of their power in regards to “no-bid” projects; contracts worth below an estimated $10,000 can be awarded by supers without going through a public bidding process. That policy is designed to accelerate the procurement process on contracts for small repairs and minor construction in public housing.

But it also opens up opportunities for corruption within the country’s largest public housing authority, which is supported by $1.5 billion in annual federal funding.

Between 2013 and 2023, the defendants often sought to obtain between 10 and 20 percent of a contract’s value in the form of kickbacks, which typically put $500 to $2,000 in the pockets of a defendant, sometimes more. Those kickbacks added up to $2 million on $13 million worth of contracts, according to officials.

“Make no mistake, this alleged pervasive corruption had the biggest impact on NYCHA residents themselves, who may have been cheated out of better services and programs,” Homeland Security Investigations Special Agent in Charge Ivan Arvelo said in a statement.

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“NYCHA has ZERO tolerance for wrongful and illegal activity,” added NYCHA Chief Executive Officer Lisa Bova-Hiatt, who is not directly accused of wrongdoing.

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NYCHA already has a difficult enough time with repairs at its properties. In July, the authority pegged its capital needs at a staggering $78.3 billion, a 73 percent increase from a similar assessment performed six years earlier.

This is not the first time that city investigators have tackled corruption with no-bid contracts within NYCHA. 

In 2021, nine NYCHA-hired contractors were indicted on charges including bribery, giving illegal gratuities and offering a false instrument for filing, after allegedly winning more than $20 million worth of non-competitive contracts from the authority.

— Holden Walter-Warner

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