October 15, 2013
By Marc Bussanich
New York, NY—Investigative reporter Juan Gonzalez won the prestigious journalism George Polk award in 2010 for exposing massive fraud by consultants during implementation of the CityTime contract. He was recognized for these efforts by the Fiscal Policy Institute and while he believes the city is on the cusp of the most progressive government in decades he doesn’t expect there’ll be rest for investigative reporters come January. Watch Video
Gonzalez has been a journalist for over 36 years and for the past 10 years he’s been trying to explain to the reading public how City Hall’s economic policies directly impact their well-being.
“I’ve tried to lift the hood off of the car when it comes to land policy, tax policy, public education policy and government spending. They’re not sexy, but you can make them intelligent to people if you work hard at it,” said Gonzalez.
Gonzalez reported for the New York Daily News how costs associated with the CityTime project to computerize the city’s payroll system ballooned from $60 million to a whopping $700 million. His reporting led to federal indictments of four consultants and the resignation of the director of the city’s office of payroll administration.
Gonzalez believes CityTime is just the tip of the iceberg of what’s happening across the country.
“I believe governments are increasingly computerizing their operations to get rid of public employees.”
Gonzalez noted as the CityTime project was being rolled out private sector consultants were making big bucks.
“With CityTime more than 250 consultants working for up to ten years billing the city of New York an average of $400,000. There were even consultants making $500,000 and $600,000 a year but they weren’t delivering the product,” said Gonzalez.
He noted it took a long time to get this information because it was included in the capital budget, not the operating budget, and therefore made it difficult for the City Council to determine how much was being spent because there was no itemization of how many people were on payroll working on a particular project.
He warned that city government’s increased spending on computer contracts represents a new form of political corruption.
“I believe information technology is the new corrupt political patronage of our age,” Gonzalez said.
James Parrott, chief economist for the Fiscal Policy Institute, said the city’s spends about $10 billion in contracts for different projects and out of that amount $5 billion goes to the private sector for delivering a range of social services including youth programs, child care and child welfare services.
But many of the workers performing these tasks are earning salaries just a hair above what low-wage restaurant workers earn.
“The social services sector is entirely a product of government contracts. Why is it that it pays next to the lowest wages in the economy, averaging about $24,000 a year? The city is creating its own working poor and poverty program,” said Parrott.
Instead, the city’s budget can be used to uplift the low-wage labor market, says Parrott.
“Contracts can be written where living wages are specified. If you look at the workforce in the non-profit social services sector, it’s about 90 percent female and people of color. The workforce is a lot like what it is in the hospital sector, but the hospital sector, because it is heavily unionized, the wages are 50 to 100 percent greater than what they are for similarly educated workers. The city can change that picture entirely.”