Contractors In Bribe Crackdown Still Reaping NYCHA Awards

Dozens of active and former superintendents with the New York City Housing Authority were arrested last year in the largest single-day federal bribery takedown in the history of the Justice Department.

Authorities touted the record apprehensions as a significant crackdown, but the root causes of the alleged pervasive corruption appear to still be in place.

In the 14 months since the bust, NYCHA has handed out hundreds of contracts worth a combined $7.8 million to eight companies whose operators have confessed to participating in the kickback scheme, The City reported. None of those vendors were charged in the scheme and all received immunity for testifying against the conspiracy’s perpetrators.

Under oath, the contractors admitted to doling out cash bribes to NYCHA superintendents, ranging from $500 to $2,000, in order to receive work at the agency’s properties. Those contractors reaped $70 million in contracts over the years.

NYCHA said the vendors continued to receive contracts because the agency was unaware of their involvement in the scheme, even though some confessed to bribery in open court. The Department of Investigation did not provide a list of implicated vendors to NYCHA, claiming many were victims of the scheme because they were required to “pay-to-play.”

Last year, the DOJ charged 70 housing authority employees with bribery. All but six of those employees have since been convicted in the scheme, resulting in sentences from six weeks to 48 months, as well as orders for restitution.

Superintendents took advantage of their power to award “no-bid” contracts worth below $10,000 without the need for a public bidding process. The intention of the policy was to accelerate the procurement process on contracts for small repairs and minor construction in public housing, but the number of open tenant repair requests across the system has increased by 38,000 since last year’s enforcement action.

NYCHA agreed to adopt more than a dozen recommendations for the process, according to a spokesperson for the DOI, including a central review of contracts awarded by development-level managers.

— Holden Walter-Warner