The lessons of Jimmy Roemer and MTA contractorsBy
An ex-con who once stole $10 million from the MTA and served jail time for the payroll scam was hired by an MTA contractor to again oversee payroll, this time on the East Side Access project. It’s an “only in New York, only involving the MTA” story uncovered this weekend by The Daily News, and it underscores the challenges an agency the size of the MTA faces in an industry with few checks and balances.
Greg Smith had the story:
Since November, Jimmy Roemer has helped manage the payroll at the MTA’s biggest construction site — the $7.3 billion East Side Access tunnel that will someday link the Long Island Rail Road to Grand Central Terminal. He’s had prior experience managing payroll at another MTA work site — though perhaps not the kind of experience the MTA would want.
A decade ago, Roemer participated in a brazen conspiracy to steal $10 million from the Metropolitan Transportation Authority’s massive renovation of its headquarters in lower Manhattan. He spent some of the spoils on a waterfront lodge he named after the Frank Sinatra song “Summer Wind.”
As he pleaded guilty to six counts — including fraud, obstruction of justice and tax evasion — in 2003, he explained how managing the payroll allowed him to routinely inflate workers’ hours and bill for workers who did not exist. This is precisely the job he’s held for the last six months: determining how many workers are needed each day and signing off on time cards for Dragados-Judlau, which has $1.1 billion in MTA contracts at the East Side Access tunnel.
Following the revelation, every party pointed a finger elsewhere. The MTA blamed Dragados-Judlau. “He was hired by the contractor, and we don’t pry into their hiring methods,” authority spokesman Adam Lisber said to The News. “We have a very robust system for checking the fitness and responsibility for all of our contractors, and it is on them to do the work the way we expect. We don’t sit down with their payrolls and examine everybody on it.”
The contractor’s representative, meanwhile, had a different explanation for the grave oversight. “Honestly, it wasn’t that big of a deal to me at the time,” supervisor Sean Clevenstine said. “He told me he was convicted, he told me he did time, he told me he paid restitution. I never got into the particulars and the specifics because it was, to me, I was filling a union position with a union employee.”
Roemer, who helped funnel money to the Genovese crime family and still owes the MTA $200,000 in restitution, has been removed from his post and declined to comment to The News. The incident itself is a black eye for Dragados-Judlau and reflects poorly on the MTA too. That said, the authority isn’t exactly in a position to run background checks on every single employee hired by its various contractors. Considering the number of contractor employees working on MTA projects, such a process would be exceedingly cost and time-consuming.
Still, something broke down somewhere. Dragados-Judlau seems to have only the barest of checks in place, and they seemingly rely on the honor system. Clevenstine’s comment concerning a union man filling a union position speaks volumes on the state of play (although Roemer will soon be a former member of Local 14, according to recent reports). If the contractors can find a few good union men for those union positions, they have no need to go that extra mile.
The MTA, meanwhile, has no checks in place. They could provide contractors with a list of people convicted of a fraud similar to Roemer’s. Considering convictions for these crimes are relatively uncommon, such a list should be easy to put together, and it would behoove the authority to figure out a way to achieve this end. After all, this revelation looks bad, especially on a project that’s already delayed and over budget for a whole mess of reasons.
Ultimately, this news strikes me more as business as usual than any such great revelation. It’s a crooked business with only a handful of powerful contractors bidding on each MTA project, and they need to come in under their competitive bids. The process failed here as it has so many other times in the past.