December 23, 2010

New York City Payroll Chief Resigns

By SERGE F. KOVALESKI and JOHN ELIGON

The Bloomberg administration official responsible for overseeing a huge, troubled payroll and timekeeping project for New York City employees that is the focus of an $80 million federal corruption case said on Thursday that he was resigning from his government position.
In a one-sentence letter to the board that oversees his agency, the official, Joel Bondy, said he was stepping down as executive director of the Office of Payroll Administration effective Dec. 31. Last week, Mr. Bondy, who has not been charged in the case, was suspended without pay. His biography was removed from the agency’s Web site earlier this week.
His departure comes as newly available documents reveal that he gave glowing evaluations for the work done by the company acting as the quality assurance monitor for the project, known as CityTime, during a period when, prosecutors say, consultants for the firm were bilking the city for their own enrichment.
Last January, Mr. Bondy took stock of how the effort to overhaul the city’s payroll system was going. The company charged with quality assurance, Spherion, was due to be evaluated on an $18.6 million contract.
How Spherion’s performance was rated by Mr. Bondy was important in a number of ways, with potential implications for the company’s ability to stay on the job and to win future work with the city.
Mr. Bondy, records show, was deeply impressed with the company’s work. According to two years of evaluations, for the periods from February 2008 through 2009, made available through a state Freedom of Information Law request, he gave the firm an overall rating of excellent, the highest possible level, for its work on CityTime.
And for each of the three areas covered in the evaluations, including fiscal administration and accountability, Mr. Bondy wrote the same seven-word comment in praise of Spherion: “The contractor’s work has consistently exceeded expectations.”
Criminal charges by prosecutors, though, now suggest that Mr. Bondy’s work was, at minimum, deeply flawed. During the years that were the focus of his appraisal, two consultants for Spherion, and two subcontractors hired by the company, are accused of taking part in the $80 million fraud, according to a criminal complaint filed last week in Federal District Court in Manhattan.
Investigators said that from 2005 through this December, Mark Mazer, Spherion’s lead quality assurance consultant on CityTime, awarded lucrative contracts to people he knew who then kicked back about $25 million to him. Prosecutors said these individuals also billed for work that was never performed and hid the money in shell companies that were in the names of Mr. Mazer’s mother and wife.
The case has raised questions about Mr. Bondy’s assessments: Was he duped, was he simply not qualified, or was he knowingly misleading the city? Mr. Bondy did not return calls or reply to e-mails seeking comment.
“Agencies rely on these performance evaluations to award billions of dollars in city contracts, and this case reveals a greater vulnerability in the process,” said Sharon Lee, a spokeswoman for the New York City comptroller, John C. Liu.
When Mr. Bondy took over the Office of Payroll Administration in 2004, there was already reason to worry about the engineering giant designing CityTime, Science Applications International Corporation, known as SAIC, and the monitoring work being done by Spherion.
In a February 2003 letter to SAIC, Mr. Bondy’s predecessor at the payroll office, Richard R. Valcich, accused the company, based in McLean, Va., of repeatedly delaying the project to get paid more, failing to adhere to basic industry standards and rewriting contracts on its own.
But it appears that Mr. Bondy never took the necessary action to control the problems with CityTime, whose cost has swelled to more than $600 million.
And at the time that he was doing Spherion’s two performance evaluations — both signed on Jan. 26 of this year, for some reason — the fraud alleged to have been committed by the consultants was in full swing.
In the evaluations, Mr. Bondy rated Spherion excellent in the category of timeliness of performance, and good in the area of fiscal administration and accountability.
Questions in that category included: did the vendor submit “accurate, complete and timely payment requisitions,” and did it “meet its budgetary goals, exercising reasonable efforts to contain costs?”
Mr. Bondy worked for Spherion on the CityTime project in the years right before Mayor Michael R. Bloomberg selected him to run the payroll office. Mr. Bondy has also had ties to Mr. Mazer, whose performance he was evaluating.
Mr. Bondy worked with Mr. Mazer, accused by prosecutors of spearheading the fraud scheme, at the city’s Administration for Children’s Services more than a decade ago.

David W. Chen contributed reporting.