More than five dozen employees with the New York City Housing Authority were charged with accepting cash payments in exchange for giving out contracts, federal officials said, calling it the largest single-day bribery takedown in the Justice Department’s history.
Seventy current and former employees allegedly received cash from contractors in exchange for NYCHA “no-bid” contracts, the U.S. Attorney’s Office for the Southern District of New York announced in a news release. The defendants allegedly demanded over $2 million in bribe money and awarded over $13 million worth of no-bid contracts.
Most of the defendants, 66 of them, were arrested Tuesday in New York, New Jersey, Connecticut and North Carolina on charges that include solicitation and receipt of a bribe, extortion and conspiracy. One defendant was also charged with destruction of evidence and false statements, according to the U.S. Attorney’s Office.
NYCHA’s Chief Executive Officer Lisa Bova-Hiatt said in a statement that the agency has “zero tolerance for wrongful and illegal activity.”
“The individuals allegedly involved in these acts put their greed first and violated the trust of our residents, their fellow NYCHA colleagues and all New Yorkers,” Bova-Hiatt said. “These actions are counter to everything we stand for as public servants and will not be tolerated in any form. … We will continue to work with all of our law enforcement partners to rid the Authority of malfeasance.”
The alleged bribes happened when repairs and construction work required NYCHA, the largest public housing authority in the country, to use outside contractors, according to the U.S. Attorney’s Office.
Contractors are typically chosen via a bidding process, however, there are times when designated staff can hire a contractor of their choosing without soliciting multiple bids, the office said.
The defendants, who were all employees during the alleged scheme, “demanded and received cash in exchange for NYCHA contracts by either requiring contractors to pay upfront in order to be awarded the contracts or requiring payment after the contractor finished the work and needed a NYCHA employee to sign off on the completed job so the contractor could receive payment from NYCHA,” the release states.
The defendants typically demanded between $500 and $2,000 depending on the size of the contract, the U.S. Attorney’s Office said. Some employees demanded higher amounts of money.
U.S. Attorney Damian Williams accused the defendants of running the scheme to “line their own pockets.”
“NYCHA residents deserve better,” Williams said in a statement. “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.”
Jocelyn E. Strauber, the commissioner of the New York City Department of Investigation, said the department recommended a reform of the NYCHA no-bid contracting process and that NYCHA accepted it.
Ivan Arvelo, the Homeland Security Investigations special agent in charge for New York, said NYCHA residents “may have been cheated out of better services and programs” due to “lucrative, under-the-table deals.”
NYCHA provides housing to New Yorkers in 335 developments across the city and receives more than $1.5 billion in federal funding from the U.S. Department of Housing and Urban Development every year. More than 300,000 people live in their buildings, according to NBC New York.
The agency faced scrutiny in the past and has been plagued with corruption allegations for years, the station reported. In 2022, numerous workers were fired for alleged overtime abuse.
The Office of the New York City Public Advocate previously recommended that NYCHA create a reliable tracking system for repairs so it could investigate all substandard repairs. The office said Tuesday that the bribery allegations harm “not only tenant trust but tenant safety, as it corrupts the repair process and contributes to dangerous conditions at complexes across the city.”
“Our office has consistently raised the failures of management at NYCHA as the worst landlord in the city, but the charges today are nonetheless a staggering statement on the widespread abuses of power and tenant trust at the core of the agency’s deficiencies,” the statement read.