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$500M payout to city after CityTime ‘disaster’

After a project Bloomberg called a 'disaster,' a plan to pay back millions.

A contractor that ran the CityTime payroll project for the city will pay $500 million after a federal investigation.

Mayor Michael Bloomberg scheduled a noon press conference today with Preet Bharara, the U.S. Attorney for the Southern District of New York, who called the project “corrupted to its core by one of the largest and most brazen frauds ever committed against the city of New York,” according to The New York Times.

The contractor will pay the millions to resolve the federal investigation, according to reports.

The city paid $652 million for the project, which was intended to keep track of employees’ hours. Instead, in a twist Bloomberg has called a “disaster,” consultants hired to oversee the project were effectively paid $46 million more than they were supposed to get, according to the Times.

A federal investigation was finally required to figure out what was behind the costly project.

Federal prosecutors charged CityTime consultants in December 2010, accusing them of redirecting money to themselves.

Prosecutors also charged Gerard Denault, a former executive at the contractor, Science Applications International Corporation, with getting more than $5 million in kickbacks.

“This historic settlement brings a measure of restitution to our taxpayers," city comptroller John Liu said. "CityTime epitomizes enormous waste enabled by a combination of woeful mismanagement and corrupt outside consultants."

 
 
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