Updated 06/29/2011 07:33 PM
Mayor: Company In CityTime Scandal Should Repay $600M
Saying the CityTime contract is tainted with fraud, Mayor Michael Bloomberg made an extraordinary demand of the company that built the city's automatic payroll system, that it give the city $600 million of its money back. NY1's Josh Robin filed the following report.
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Mayor Michael Bloomberg wants the company involved in the scandal-plagued CityTime project to reimburse the city more than $600 million.
The automated payroll system was supposed to save taxpayers money, but prosecutors say it was "corrupted to its core."
Bloomberg wants the money to come from the main contractor behind the flawed timekeeping system, Science Applications International Corporation, a Virginia-based firm.
Red flags were first raised about CityTime in 2003. Originally pegged at $63 million, the project mushroomed to $700 million in all.
Two SAIC employees are facing fraud charges, and now CityTime has become one of the biggest crimes ever committed against the city.
In a letter he personally signed, the third-term mayor writes, “because the project was apparently tainted by fraud and kickback schemes, the City must be made whole."
"Not only was there corruption, there was serious deficiencies in the program management. And upon discovering that, the mayor has sent a demand for the full amount of money to be returned to the city," said Deputy Mayor Stephen Goldsmith.
Last week, SAIC agreed to repay nearly $2.5 million to the city, but it does not seem willing to give it all back.
While the defense giant says it shares outrage at the fraud allegations against former workers and subcontractors, an SAIC spokesperson said, "SAIC is ready to discuss appropriate resolution of this matter, considering the breadth of the fraud alleged and the fact that SAIC delivered a system that the city said this week is working well."
In September, the city decided to stop paying SAIC to get the firm to move faster.
Nearly all city employees are using CityTime to keep track of their hours, even as criminal investigations are continue.
"We're going to phase out the consultants and replace them with city employees. This will save taxpayers $20 million a year, something that is long overdue," said City Comptroller John Liu. "And at the same time, we want the U.S. attorney, we'll work closely with them to recover as much of the $700 million that has already been wasted on this project, as possible."
An SAIC spokesperson says the company is ready to discuss an appropriate resolution, "considering the breadth of the fraud alleged and the fact that SAIC delivered a system that the city said this week is working well."
"The timekeeping system itself appears to work. It certainly was not worth all the money that has been paid out over so many years, but going forward, we will continue to look to see if there are even more effective timekeeping systems that could cost less money for the taxpayers," said Liu.
SAIC's contract expires on Thursday. City officials say they will use fewer outside consultants, which is seen as driving up the costs for the project.