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New York City Mayor Michael Bloomberg Asks Science Applications International Corporation (SAIC) of The CityTime Project To Give The Stolen Money Back
Good move on Bloomberg's part, but we must not forget that neither Bloomberg nor anyone in his administration admits to protecting the public funds - $$700 million - taken by the CityTime consultants in an unprecedented fraud on the City of New York. Let's remember that CityTime was hired by the FBI in 2000 and made a mess of the job back then. It was nice of Bloomberg to give them another bite at the apple, but when does public integrity set in?
   NYC Mayor Michael Bloomberg   
SEC Filing: Mayor Bloomberg Letter To SAIC CEO Walter Havenstein On Fraud In CityTime Project
Posted July 1, 2011

Mr. Walter P. Havenstein
Chief Executive Officer
Science Applications International Corporation
1710 SAIC Drive
McLean, VA 22102

Re: The CityTime Project

Dear Mr. Havenstein:

Since 2000, Science Applications International Corporation has served as the primary contractor to build and implement a uniform automated time-keeping system to be used by the City of New York's employees to accurately record their attendance and provide a streamlined process for supervisory approvals. The City relied on the integrity of SAIC as one of the nation's leading technology application companies to execute the CityTime project within a reasonable amount of time and within budget given the system's size and complexity.

The recent indictment of Gerard Denault, SAIC's lead Project Manager supervising the CityTime project, and the recent criminal charges filed against and guilty plea of Carl Bell, SAIC's Chief Systems Engineer who developed the software and oversaw all technical aspects of the project, are extremely troubling and raise questions about SAIC's corporate responsibility and internal controls to prevent and combat fraud. Denault and Bell, along with Technodyne and its principals retained as a "sole source" subcontractor by SAIC and six other defendants, are charged with hiring consultants not needed for the project at inflated rates in order to execute an elaborate kickback scheme to defraud the City of New York of millions of dollars.

The scheme to defraud was so pervasive that the United States Attorney for the Southern District of New York in the superseding indictment recently implicating these two SAIC employees stated that "virtually the entirety of the well over $600 million that the City paid to SAIC on the CityTime project was tainted, directly or indirectly, by fraud." Equally troubling is that, according to the superseding indictment, SAIC as early as 2005 apparently received a whistleblower complaint regarding possible mismanagement of the project and alleged kickbacks to defendant Denault, SAIC's lead Project Manager on CityTirne. It is unclear what SAIC did at that time to investigate these serious allegations.

While we have received a working system that will advance our management ability, in light of the foregoing, because the project was apparently tainted by fraud and kickback schemes, the City must be made whole. I am, therefore, requesting that SAIC reimburse the City for all sums paid to it, approximately $600 million, as well as the cost of investigating and remediating this matter. I am forwarding this correspondence to the United States Attorney so that the City's position as a victim can be taken into consideration.


/s/ Michael R. Bloomberg
Michael R. Bloomberg

Mayor Bloomberg Demands SAIC Pay Back $600 Million In Cost Overruns For NYC Computer System
from the good-for-him dept

Over the years, we've chronicled a number of absolutely ridiculous over-budget computer systems for government agencies. My favorite still remains the FBI computer system -- which was over budget by hundreds of millions of dollars, was useless at finding terrorists, was so bad that a contractor had to use some free internet tools to hack into the system just to get his work done, and was so confusing that a computer science professor who reviewed the system said he and some others thought of going on a crime spree the day the FBI switched over. That system was built by SAIC, and the FBI ended up scrapping it and starting from scratch. But, as far as I know, the FBI never asked SAIC for the $600 or so million in taxpayer money it spent on the system back.

Apparently, NYC Mayor Michael Bloomberg has had a similar experience with SAIC and the new computer system for NYC it's been building. But, Bloomberg is a businessman by trade, rather than a politician, so when a company charges you $600 million (way overbudget from the original $63 million), he knows that you ask for your money back. So that's what he's doing. He's demanding a $600 million refund from SAIC. Part of the issue is that, as with many of these type of projects, there appears to have been significant fraud involved:

The recent indictment of SAIC's leader project manager on the CityTime job, Gerard Denault, as well as the guilty plea to criminal charges made by SAIC systems engineer Carl Bell, who designed the software, are "extremely troubling and raise questions about SAIC's corporate responsibility and internal controls to prevent and combat fraud," he added. Denault and Bell were charged with were charged with taking kickbacks, wire fraud and money laundering.

Also recently indicted were Reddy and Padma Allen, a couple who head up New Jersey systems integrator TechnoDyne, which was SAIC's primary subcontractor on the CityTime project. Federal authorities allege that the Allens and others conducted an elaborate overbilling and kickback scheme that siphoned millions of dollars from the project.

Federal authorities have also contended that SAIC had received a whistleblower complaint about the project as far back as 2005, Bloomberg said in the letter. "It is unclear what SAIC did at that time to investigate these serious allegations."

I would imagine that SAIC has no interest in paying back $600 million, but it could make for an interesting lawsuit if Bloomberg decides to press the matter.

FBI's New Computer System: Late, Overbudget...And Useless For Finding Terrorists
from the but,-school-kids...-and-video-game-stars? dept


Back in 2000 the FBI decided it was finally time to upgrade their computer system, realizing they were very much out of date. They set up a plan that was expected to cost $380 million and be completed in 2003. It's now 2004 and $600 million have already been poured into it... and a new study says the system is useless in fighting terrorism. It was originally designed to help with investigations, and not counter-intelligence. Apparently, no one designing the system thought to make it flexible enough to adjust should the main focus of the FBI change at all. Instead, they just spent and spent - and are now being told they may need to start all over again from scratch. It's not as if no one knew terrorism was a threat in 2000, either. No wonder the FBI remains so good at tracking down kids file sharing, but can't seem to distinguish video game villains from real terrorists.

FBI Computer Upgrades Fall Short
CBS News

The FBI's nearly $600 million effort to modernize its antiquated computer systems to help prevent terrorist attacks is "not on a path to success," according to an outside review completed weeks after the bureau director gave Congress assurances about the program.

The report by technology experts for the National Research Council found that the FBI's "Trilogy" project doesn't adequately reflect the agency's new priority on terrorism prevention since the Sept. 11 attacks. It urged the bureau to build new systems from scratch to help in this role.

The report was being circulated this week to senior FBI officials and some members of Congress in advance of its public release next week. The Associated Press obtained a copy.

The study by the council, a nonprofit research board operating under the National Academies of Science, concluded that even ongoing improvements to the bureau's computerized system for tracking criminal cases won't help. It cited "significant differences ... between systems supporting investigation and those supporting intelligence."

It suggested that the system for tracking criminal cases could later be plugged into a new anti-terrorism system. The case-tracking system, known as the Virtual Case File, "is not now and unlikely to be an adequate tool for counterterrorism analysis because (it) was designed with criminal investigation requirements in mind," the report's authors wrote.

The FBI responded in a statement Monday that Director Robert Mueller "understands that these capabilities are essential to our success in the war on terrorism and he has made them a top priority." It cited several examples in which agents using some parts of the new system in terrorism investigations performed millions of information searches in days rather than the months it would have taken using old FBI tools.

The council's criticisms are the latest over the slow pace of the massive project, launched in November 2000 with an estimated $380 million price tag and a completion date of 2003. The price tag now approaches $600 million and, while some components are operating already, the system's most important parts won't be ready until year's end.

The council's report, completed at the FBI's request, concluded that the bureau has made important progress in the past year. But it also describes the FBI's efforts and results as "late and limited" and said its upgrade programs "fall far short of what is required."

The report comes just weeks after Mueller asked for $20 million more for the project and assured a Senate budget committee, "We are now on the right track, and we are closing in on the goal of completion."

The FBI noted Monday that the council's report only covered the period until March. "While the report is accurate and its findings helpful, it does not reflect the significant progress made under the FBI's new chief information officer," the agency said.

The report pointedly criticized plans to allow agents to begin using the Virtual Case File, a system aimed at letting investigators anywhere in the world quickly share information, before it has been rigorously field-tested.

The council called that "highly risky" and "nearly guaranteed to cause mission-critical failures and further delays." It recommended delaying the FBI-wide rollout for more testing and leaving the old system in place until it can be safely turned off.

The FBI said the system probably "will be deployed in phases that will ease the transition for FBI employees, allow us to test and improve it and mitigate risks."

The FBI's new chief information officer, Zalmai Azmi, told reporters last week that some version of the Virtual Case File will be in place by the end of the year. Azmi, who took over the job Friday, said the FBI was renegotiating parts of its contract with Science Applications International Corp., one of its primary contractors.

By Ted Bridis

CityTime Ends Relationship with Contractor After Spending $628 Million
June 30, 2011 at 7:11 am

CityTime, the city’s timekeeping system, has succumbed to its scandals, and is finally ending its relationship with its main contractor, Science Applications International Corp., after racking up $628 million over 12 years. Mayor Bloomberg sent a letter requesting $600 million back from the contractor.

As per the agreement between Bloomberg and city Comptroller John Liu, the system will now enter a transition period and be handed over to city workers for maintenance. Also, the city will have until January 2012 to evaluate CityTime’s effectiveness, and request information from other companies to present a better timekeeping alternative.

Currently, more than 67 agencies and 163,000 NY workers are using the system.

New York City Mayor Michael Bloomberg's Biggest Scandal: The CityTime

Well, it's summer in the big city, and the CityTime fiasco just keeps getting worse. It may now be the biggest theft of all time. Federal prosecutors and the city Department of Investigation unveiled a new indictment today that alleges that more than $40 million was stolen by consultants working on the project to automate the city's payroll system. "We have developed evidence that the corruption on the CityTime project was epic in duration, magnitude. and scope," U.S. Attorney Preet Bharara says. "CityTime served as a vehicle for unprecedented fraud."

New York City Mayor Mike Bloomberg On the CityTime Scandal: My Bad About That Whole $740 Million CityTime Mess

From Editor Betsy Combier: It is very comforting to know that many people were able to get away with stealing millions of dollars of taxpayer funds right under NYC Mayor Bloomberg's nose, and he didn't see it nor did he do anything about it until the media made it impossible to ignore the scam, theft, and fiscal wrong-doing. Not.

© 2003 The E-Accountability Foundation