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.
19 comments
As usual, you are great for pointing something like this out and properly skeptical, but really not outraged enough. The contractor hired a convicted criminal to do payroll, and their response when they were caught is on the lines of “we hired a convicted criminal to do payroll? What can go wrong?” The MTA says it doesn’t check whether key people working for contractors are minions in the Genovese family and have stolen from the MTA in the past?
You’re buying this?
To be clear, the whole thing is a crock of you-know-what. I’m mostly resigned to the situation. It’s a crooked business with too few players, and unless someone with actual legal and political power (i.e. Schneiderman) steps in to clean it up, this crap is going to happen. I can’t even imagine the number of people who have participated in these schemes and don’t get caught.
What do you think a forensic audit of a contractor’s books would find?
You are right on this one. These things happen and nothing is done to prevent them from happening again. Then it happens again and everyone is surprised. Until some outside entity steps in and forces the MTA to adapt some serious ethics standards it will continue to be a black hole that taxpayers throw money into.
I see that the contractor is a joint venture (you local folks already knew, I’m sure). It strikes me that this leaves even more room for finger-pointing back and forth.
Their response was more like
“I hired a convicted criminal, that tells me he’s a team player”
It ain’t changing until people get voted in to clean house, and a whole lotta wiseguys are placed somewhere with no phone, no computer, no visitors and no oxygen.
If only the had a program to prevent contractors from ripping them off like they have a program to keep people from doing illegal duplicate metrocard fare swipes.
Clevenstine’s comment does show in part why major infrastructure projects cost so much in New York. At the very least, if a politician was caught putting someone who has so obviously disqualified himself from a position of financial responsibility into a post like that, they very least would have feigned concern and/or outrage when confronted by the media. Clevenstine doesn’t even do that (at best, you can say he’s treating it as no big deal because he hopes his supervisors will then see it the same way, but it comes off as a total lack of concern for any possible budget problems due to funds EFTing their way out of the pay office).
The MTA has a very robust system for checking on contractor’s fitness and responsability to do a job according to MTA PR flak Lisberg. I wonder what kind of background checks their contractor’s do for terrorist connections and criminal associations. Their robust checking should also help keep these projects close to budget not $1 billion overbudget on this project, $1 billion overbudget on the SONET fiber optic network or hundreds of millions of dollars overbudget for a police radio system that will never work as designed and overpaid for. No wonder the TA originally said that it would cost $100 million to renovate 370 Jay St. and then a week later say it will cost $200 million. Must have been another Roemer project.
This is simply standard operating procedure at MTA. The main culprits are actually the politicians who should have insisted that they way the MTA conducts business and weeds out corruption should have been changed as a condition for granting them the right to borrow more money. Now that they have their money they can conduct business as usual, because there is no one will allow projects such as East Side Access which is 43% complete to be terminated (As opposed to the 62% that was promised) (I read that in Newsday today)), they will be allowed to milk it for all its worth. The East Side Access Tunnel, has actually done the impossible: They made the Fulton Street Transit Center look like a bargain.
You mean all this time the MTA has been promising this project will be completed shortly after all these years and it is not even halfway completed?
Yes, but he’s in the union!
there it is – i was waiting for it!!!!!!!
Its all lies, check the inital filing for “Dep’t of Buildings v. Roemer
OATH Index No. 222/12 (Feb. 17, 2012) ” via google search. Sean Clevenstine knew who he was hiring before this story broke.
As much as I’d like to find a smoking gun here, nothing in the OATH decision contradicts what Clevenstine said to The News. The case says:
To the News, 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.” Unless the initial filings — inaccessible through public searches — say that Clevenstine knew of the specifics of Roemer’s crime, it seems as though his stories are consistent (if somewhat unbelievable).
Unless I’m missing something….?
There must be more to this story. I would bet that this guy was hired because of his criminal history, not despite it.
The MTA has thousands of contracts. Each contract has a contractor and subcontractor. The MTA is responsible for its contractors but not its subcontractors. It is not practical for the MTA to check the practices of all the subcontractors The subcontractor is the responsibility of the Contractor. The MTA’s recourse is to punish the Contractor by not using him again and by suing him for damages. The MTA is only guilty if they choose to ignore what has happened and do nothing.
The problem seems to be that most of the contractors willing to work in the NYC area are mobbed-up, just like this one.
What can be done to get honest contractors to bid? And to protect them from the wrath of the dishonest ones?
The MTA knew Mr. Rommer and his past from day one. They shared this information with the GC
They over looked his past for whatever reason
But he wasn’t working for some sub of another sub he was the number one man incharge of over 500 workers also the FBI knew he was there and approved of it. So does that answer or ask more questions ???
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