New York’s $600 Million Fraud Shows Privatization Doesn’t Pay
After a contracting-out scandal revealed a $600 million fraud scheme, AFSCME rallied in June against the New York City mayor's layoffs, calling on him to "fire crooked profiteers, not city workers." Photo: AFSCME DC 37.
How did New York City plan to prevent time theft by city workers? By hiring contractors who would, it turns out, steal $600 million from the taxpayers. One of their crimes, prosecutors allege, was to file bogus timesheets claiming extra hours.
The payroll and timekeeping system called CityTime was originally supposed to cost $63 million but ballooned to $750 million over the last decade. It introduced biometric palm scanners to ensure city workers punched in and out appropriately. Only rank-and-file workers were subject to the electronic surveillance, however; managers—and contractors—were exempt.
The fraud came as no surprise to Jon Forster. Secretary of