Updated 03/04/2013 11:33 PM
City Budget Director Says Nonprofits May Have Abused Private Pension System
City Hall is reviewing a private pension system for nonprofit groups that have contracts with the city, and Mark Page, the city's budget director, said at a Monday hearing that some groups may be trying to get more benefits than they deserve. NY1's Courtney Gross filed the following report.
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At a routine budget hearing Monday, the city's budget director, Mark Page, let something else slip. He told the City Council that a number of cultural groups and city day care operators were possibly abusing city tax dollars.
"There is a bunch of money that we have paid for over the years that has been, I guess, nice for those enterprises, but not very nice for our taxpayers and what we have actually gotten for our money," Page said.
Essentially, he said these groups inflated the number of people they say were working on city contracts, and the record of these contracts "have not been true."
It was all so they could get benefits through a private pension system that Page said they did not deserve.
It was the first time many local lawmakers heard of the potential fraud.
"That was the first time today in the hearing we ever heard that there was fraud," Brooklyn Councilman Domenic Recchia said. "We never heard that the information they received was not correct."
By Monday it was still unclear how much was skimmed from city coffers.
"A whole collection of cultural agencies and a whole collection of social service agencies and I don't know the number," Page said.
Asked how much the city lost, Page answered, "I don't know that either. It's something we are trying to get a handle on."
For now, the budget director said the city is withholding this year's payment of $17 million into the private pension system as it reviews the issue.
This was not the only concern raised by the Bloomberg administration. Page also testified some $800 million could be on the chopping block, thanks to Washington's sequester.
"Things are not necessarily breaking our way," Page said.
City Hall is now grappling with millions of cuts from sequestration, including millions to the housing authority, millions to public hospitals and up to $500 million that was earmarked for Hurricane Sandy recovery.