NYCHA seeks restitution
Wants money back from contractors tied to bribe scandal
The New York City Housing Authority is seeking to get cash back from contractors who overcharged the agency to perform repair work via so-called “micro purchase” deals, the system’s top official revealed Tuesday.
Micro-purchase contracts are a form of no-bid awards that NYCHA can give vendors to perform repair work at its public housing complexes that doesn’t exceed $10,000.
The obscure procurement method became the subject of intense scrutiny earlier this month, when Manhattan federal prosecutors unsealed dozens of indictments charging 70 former and current NYCHA superintendents with taking more than $2 million in bribes from contractors in exchange for giving them micro-purchase bids.
The feds didn’t charge any of the contractors accused of doling out the bribes at the heart of the scandal — but during a marathon City Council hearing on Tuesday, NYCHA CEO Lisa Bova-Hiatt testified that the agency is seeking restitution from some of them.
“To the extent that we can, we will be seeking restitution not only from vendors who have overcharged NYCHA, but also from our employees who have put their greed above the needs of NYCHA and our residents,” Bova-Hiatt said.
The NYCHA honcho didn’t name any of the vendors in question or how much money the agency expects to seek from them. She did say the inspector general of NYCHA, Ralph Iannuzzi, is in talks with Manhattan federal prosecutors about getting help with securing restitution.
A spokesman for the Manhattan U.S. Attorney’s Office declined to comment.
Word of NYCHA’s push for restitution comes on the heels of the news outlet The City reporting that some NYCHA contractors have used the micro purchase system to charge outrageous sums of money to perform basic repair work.
In one case highlighted by the outlet, a vendor charged $4,250 to change six lightbulbs at NYCHA’s Throggs Neck Houses in the Bronx — more than $708 per bulb. NYCHA approved that invoice and others with equally eye-popping sums, even though they varied wildly from regular spending levels for that type of work.
Long before the bribery scandal emerged, NYCHA was warned by its federal monitor years ago that the micro purchase system is susceptible to corruption due to a lower bar for transparency from employees as well as contractors when compared to the agency’s regular procurements programs.
In the wake of the Manhattan feds’ latest bribery bust, NYCHA committed to enacting reforms to the micro purchase program meant to prevent corruption.
The city Department of Investigation has for years urged NYCHA to enact many of those reforms.
Asked at Tuesday’s Council hearing why NYCHA didn’t enact the reforms sooner, Brad Greenburg, the authority’s chief compliance officer, said, “It’s hard to go backwards. I think we’re trying to go forward.”