Federal prosecutors on Tuesday arrested 70 employees of the New York City Housing Authority in the largest bribery takedown in Justice Department history.
The current and former employees of NYCHA, which oversees the city’s public housing, are accused of taking bribes from private contractors in exchange for awarding them lucrative contracts, according to authorities.
Prosecutors with the Southern District of New York announced the charges against the 70 defendants on Tuesday, saying they abused their authority at NYCHA to illegally benefit themselves, while doing significant harm to taxpayers and low-income residents of public housing.
“Instead of acting in the interests of NYCHA residents, the City of New York, or taxpayers, the 70 defendants charged today allegedly used their jobs at NYCHA to line their own pockets,” said Damian Williams, the head attorney for the Southern District of New York. “NYCHA residents deserve better. My Office is firmly committed to cleaning up the corruption that has plagued NYCHA for far too long so that its residents can be served with integrity and have the high-quality affordable homes that they deserve. The culture of corruption at NYCHA ends today.”
Law enforcement officers rounded up 66 of the 70 defendants across four states on Tuesday, which eclipsed the record for the largest number of bribery suspects to be cuffed in a single day.
According to court documents, the corruption at NYCHA began in 2013, and ran rampant at the agency for a decade while the suspects collected around $2 million in kickbacks from contractors.
The defendants, during that time, had awarded more than $13 million in contracting work at NYCHA buildings, and ruthlessly denied contracts to any company that failed to pay up.
Authorities say their scheme relied on their power to award “no-bid” contracts, where the agency was not required to solicit bids from multiple contractors if the value of the contract was below $10,000.
Those contracts included work for essential services like plumbing, construction, and other maintenance.
Their corruption became so routine that bidders knew they had to fork over between 10% and 20% of the contract amount to the corrupt public officials, or they would stand no chance of getting selected.
Authorities say the defendants awarded the ill-gotten contracts to bidders for work at around 100 of 335 NYCHA developments in the Big Apple.
Home to around 1 out of every 17 New Yorkers, NYCHA developments are infamous for their shabby conditions, and the lack of adequate maintenance when things break, such as elevators or lights.
The agency has also been hit with other accusations of wrongdoing, including when oversight workers launched a massive probe into abuse of overtime hours that inflated workers’ salaries.
Jocelyn Strauber, the head of the city’s Department of Investigation, said the new scandal shows the need to reform the process of awarding contracts, and called for more oversight going forward.
“These 70 current and former NYCHA supervisors and other staff used their positions of public trust and responsibility to pocket bribes in exchange for doling out no-bid contracts,” she said. “The extensive bribery and extortion alleged here calls for significant reforms to NYCHA’s no-bid contracting process, which DOI has recommended and NYCHA has accepted.”
