Contractor corruption may be long-running
BY DAN JANISON, NY Newsday, February 27, 2005
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Earlier this month, a Bayside painting contractor admitted in State Supreme Court to criminal charges of underpaying wages on public-school jobs and filing false documents with the school system.

The guilty pleas by Michael Capous and his MGC Restoration Services were proclaimed by state and city authorities as proof that corruption will not be tolerated.

Now, evidence has surfaced that the trickery of Michael Capous and his MGC Restoration Services might have been nipped in the bud had school officials vetted contract work in a timely manner, as rules require. Documents turned up by unions long critical of the system's contracting practices show early signs of trouble.

In early 2001, MGC submitted a series of weekly payroll reports with the then Board of Education's Division of School Facilities that at a glance appear easily detectable as fakes.

The reports were photocopied and submitted under different dates by the contractor to cover seven consecutive weeks of painting work in schools.

One painter was listed as working each of seven days for exactly five hours per day, making it look as if the employee hadn't taken a single day off for 35 straight days.

Checks were issued anyway. Eventually, the city Department of Investigation and state attorney general found the employees to be "ghost" workers -- people who existed but were not at the declared job sites.

Also, the prevailing wage rate for brush and roller work was $28.25 -- but listed as $26 on MGC's submissions.

Also, by April 2001, the city Human Resources Administration had stopped using MGC, terming its performance "unsatisfactory" on several counts.

Still, MGC remained on the books as a Department of Education contractor, drawing millions of dollars between 1999 and 2003 before probers caught up.

Lawyer Robert Stulberg, representing Local 1969, Civil Service Employees of the International Union of Painters and Allied Trades, said, "DOE has no one to blame but itself for paying millions of dollars in public funds to a contractor that has admitted to engaging in criminal conduct."

Michael Best, Education Department counsel, cited recent improvements. He said the system's inspector general was contacted as soon as the MGC scam was reported.

"The division ... has set up a Quality Assurance unit that looks at the propriety of the invoices," Best said. "It will bounce back any invoices that do not contain such items as original documentation, proper back-up or required notarization."

The department outsources skilled trade jobs, citing efficiency. But Stephen Melish, president of the civil service Painters Local 1969, has been arguing for several years that full-time staff painters do the job more efficiently that outside contractors.

Capous and MGC have paid restitution of $496,441.
Copyright © 2005, Newsday, Inc.