NYC Privatization Scandal Grows With New Arrest
by Clyde Weiss | June 02, 2011
News that yet another person has been arrested in connection with New York City’s corruption-riddled CityTime automatic payroll contract is a shameful, but not unexpected, consequence of the city’s over-reliance on outside contractors.
AFSCME District Council 37 has long condemned and exposed the waste, fraud and abuse that often results from hiring private contractors to perform work that should have been done by public service workers all along. In 2009, DC 37 issued a report (pdf) that identified 10 of the over 17,000 outside contracts on which the city has wasted some $10 billion of taxpayers’ dollars.
The latest development involves the arrest of a former executive with Science Applications International Corporation (SAIC), the company that oversaw the CityTime contract. That executive, Gerard Denault, has been charged with receiving at least $5 million in illegal kickbacks. Eight people have now been charged in the case. One has already pleaded guilty while another has died.
Yet Mayor Michael Bloomberg has continued to defend the contract, saying on his radio show on Friday that “we actually did a pretty good job here, in retrospect.” Hours later, following news of Denault’s arrest, Bloomberg had to backpedal, reported The New York Times. Said Bloomberg:
“It appears there may well have been widespread fraud and gross negligence within S.A.I.C., which confirms the need to continue our detailed examination of every dollar spent on the project.”
That’s simply not good enough. In light of this scandal, and many others like it, the city needs to stop outsourcing jobs that public employees not only do better, but also with honesty and integrity. Whether you talk about prisons, child welfare services, or some other public service, privatization opens the door to waste and corruption that negatively impacts public employees and the communities they serve.
Read more about the downside of contracting out in New York City in DC 37’s Public Employee Press and AFSCME WORKS .
