Introduction to the NYCHA Corruption Scandal
One year after a sweeping corruption takedown at the New York City Housing Authority, law enforcement’s scorecard reads like this: 64 convictions out of the 70 housing authority employees arrested on charges of taking cash bribes to hand out contracts to vendors performing public housing repairs. Dozens of NYCHA superintendents and assistant superintendents have received prison sentences ranging from six weeks to 48 months. Many have been ordered to pay NYCHA restitution equal to the sum of the graft they pocketed — from a few thousand dollars up to $329,000.
The Other Side of the Corruption
On the other side of this corrupt transaction, however, it’s a very different story. Since the big sweep on Feb. 6, 2024, billed as the biggest one-day takedown in Department of Justice history, NYCHA has awarded hundreds of contracts worth a total of $7.8 million to eight companies whose operators have publicly confessed to participating in the decade-long bribery conspiracy, an investigation by THE CITY has found. All of these corrupt contractors have admitted under oath that they regularly handed over cash bribes from $500 to $2,000 in the basements and stairwells of NYCHA developments to dozens of NYCHA staffers, sometimes for years. None of the vendors were charged with a crime. All were granted immunity from prosecution in exchange for their testimony against the NYCHA employees they paid off.
The Extent of the Corruption
The eight bribe-paying vendors that THE CITY discovered are still getting NYCHA work have, over the years, racked up $70 million in taxpayer-funded contracts for everything from installing vinyl tile to performing minor repairs to painting apartments, an analysis of contract records found. Why NYCHA continued to hire them after the corruption scandal exploded into the headlines appears to be a function of a decision to not look too closely due to the urgent need to address a growing backlog of unresolved repair requests.
The Systemic Problem
For years, NYCHA has struggled in vain to resolve tenant repair requests. The number of open requests has soared, forcing the authority to supplement its own staff and hire vendors to handle smaller repairs. But that well-intentioned strategy opened the door to a pay-to-play mentality that took hold in housing developments across the five boroughs. Development-level superintendents and their assistants were given the power to hire contractors without competitive bidding for so-called micro purchase contracts — work valued at less than $5,000, an amount later lifted to $10,000.
The Fatal Flaw
And even some competitively bid transactions known as “blanket” contracts had a fatal flaw: vendors were retained to perform small jobs on an as-needed basis, but each job had to be certified by the low-level superintendents as complete. In both cases, some NYCHA staffers came to regularly demand cash to either award a no-bid contract or sign off on individual jobs under a blanket contract. All told, they pocketed more than $2 million in bribes over the last 10 years, prosecutors alleged.
Courtroom Evidence
While NYCHA points to law enforcement’s withholding of information to explain why it kept hiring these dubious contractors, the authority does have its own system for determining if a vendor seeking a contract is “responsible” and has a “satisfactory record of business integrity.” A vendor could be found not responsible and thus ineligible to bid on contracts if they have “engaged in improper behavior including bribery,” if they have made a “false, deceptive or fraudulent statement in any bid,” or have been given a “grant of immunity or an investigation in connection with a criminal prosecution of the contractor.”
Testimony of Contractors
Based on the courtroom testimony of several of the contractors, the actions of all eight contractors implicated in the bribery scheme appear to fall into at least one of those categories. NYCHA officials say they have not monitored these court proceedings, which could continue to reveal the extent of the corruption: six more cases have yet to get to trial. The testimony to date detailing the scope of the contractors’ activities in gaming NYCHA’s desperate need for repairs emerged in the cases filed against four NYCHA managers, including three who went to trial instead of pleading guilty.
Example of Contractor’s Testimony
One vendor, Harjeet Singh, got flustered when he was asked how many NYCHA employees he’d bribed. “Twenty to 25,” responded Singh. “There could be more than that, but I don’t remember the exact number.” Singh’s company, Metro-City Renovations, has grossed more than $29 million in NYCHA contracts since 2013, including $3.2 million approved since the February 2024 takedown.
NYCHA’s Response
In response to THE CITY’s inquiries, NYCHA officials said they continued to hire the eight bribe-paying vendors identified by THE CITY because they were unaware of their track records, even after several bribe-paying contractors testified to their actions in open court. Law enforcement, the officials said, had declined their request for a list of vendors implicated in the bribery scheme. “NYCHA has not been made aware of the nature of the vendors’ involvement, or any charges levied against them,” authority spokesperson Michael Horgan wrote.
Conclusion
The NYCHA corruption scandal has highlighted the need for greater transparency and accountability in the awarding of contracts. The fact that NYCHA has continued to hire vendors who have admitted to participating in a bribery scheme is a clear indication that the system is broken. It is imperative that NYCHA takes steps to address this issue and ensure that contracts are awarded based on merit, not bribes.
FAQs
Q: How many NYCHA employees were arrested on charges of taking cash bribes?
A: 70 NYCHA employees were arrested on charges of taking cash bribes.
Q: How many contractors have admitted to participating in the bribery scheme?
A: Eight contractors have admitted to participating in the bribery scheme.
Q: How much money has NYCHA awarded to these contractors since the takedown?
A: NYCHA has awarded $7.8 million to these contractors since the takedown.
Q: Why did NYCHA continue to hire these contractors?
A: NYCHA continued to hire these contractors because they were unaware of their track records, despite several bribe-paying contractors testifying to their actions in open court.
Q: What is NYCHA doing to address the issue?
A: NYCHA has agreed to adopt all 14 of DOI’s recommendations to tighten up the system for awarding micro-purchase contracts going forward, including having central staff review all such contracts awarded by development-level managers.
