This is Part XVI in a Series.
Hope you enjoyed the appetizers.
Now I am going to get into sections of this series that are a little more demanding on your time and attention. I will toss in more stories about Jimmy Bonanno and his crew to liven things up but I want to get the heart of the matter with the corruption — where real money has been hemorrhaging from the district for years.
Last spring I began work on a project to expose corruption in the school district through a series of articles. The plan was to first explain how money is supposed to be paid out by the district’s finance office and then examine specific invoices to illustrate why a particular invoice should or should not have been paid. A preliminary review of 200+ invoices paid by the district, over a period of years, by different vendors, for different amounts and project types, showed that precisely zero of the invoices I obtained should have been paid.
I set that project aside because there were efforts underway to prepare criminal referrals based on an investigation by Vigilant Resources International and there was an audit of maintenance and capital construction projects by Capital Project Consulting. Both these efforts were initiated by Interim Superintendent Dr. Jeffrey Korostoff. Unfortunately, he ran out of time and was replaced over the summer by Schools Superintendent Dr. Brian Osborne. He then retired on December 31, 2014. There has been no follow through on either the VRI or CPC reports.
I have reported many, many problems with the Buildings & Grounds Department with both direct employees and outside contractors, all under the watch of Assistant Superintendent John Quinn and ARAMARK consultant John Gallagher. These reports and the results of the CPC audit and the VRI investigation did, at least, help Korostoff convince the board to get rid of Quinn and Gallagher. But they were never held accountable and that needs to change.
In the meantime, Board of Education President Lianne Merchant and the rest of the school board rationalized how inaction was in the interest of the “greater good”. They along with Osborne and Jeff Kehl buried the investigations. This being the case, the time has come to restart that initiative.
This series will now rely heavily on what I believe is one the finest pieces of reporting I have done on Talk of the Sound. I know it is not as salacious or interesting as other parts of this series I have published over the past few weeks but I would ask that readers who are serious persons, interested to really understand the corruption in the New Rochelle school district take the time to read: How Public Works Contractors Get Paid by the New Rochelle School District.
The article is a primer on how Purchasing works (or rather does not work) at the City School District of New Rochelle. In the original version where I explained the actual payment process, I removed the names of the people involved. I will be republishing that section below but this time with all the names.
I will excerpt and other re-use parts of it going forward starting with this:
Having spent a good deal of time acquiring hundreds of invoices, sorting them out and analyzing them so I can better explain to Talk of the Sound readers the complete and utter lack of financial controls which exist in the City School District of New Rochelle and the myriad ways that the taxpayers are being fleeced.
I obtained the paperwork on about 200 jobs given to outside contractors by the New Rochelle school district over the past several years. In some cases, I have waited years, watching the work get done, taking photographs, filing information away for when the time was right.
I wanted to start with a few smaller jobs to illustrate the basic concept of how the game is played in New Rochelle:
I wrote and spoke extensively about the New Rochelle High School Planetarium scam. Anna Giordano did a lot of research on masonry scams at Trinity, Columbus and Isaac which resulted in additional stories published on Talk of the Sound. After hearing a lot about all of this, Korostoff decided to put our claims about corruption to the test which resulted in what I will refer to as the “Orifici Report” (Mike Orifici is the president of CPC).
The report indicates a date of April 24, 2014 but is officially dated May 20, 2014 which is the day of the 2014 Budget Vote and School Board Election I requested a copy of the “Orifici Report” on January 5, 2015. After two months of stonewalling by Jeff Kehl, I was provided a heavily redacted copy of the report today. If you are reading this and have the ability to get me a clean copy please do so. Happily Kehl accidently left one "CPC Estimate" un-redacted and so that has been noted below.
Before I begin, I want folks to think about the stonewalling and redaction of this report. The district hires a firm at taxpayer expense to investigate public allegations of corruption, the need to do this is discussed repeatedly in public meetings of the school board, it is part of the year's budget message, and board members lavish praise on Interim Superintendent Dr. Jeffrey Korostoff for doing this. Yet they never share with the public that they hired a company to audit capital projects, they do not share the findings (all of which are confirm reporting by Talk of the Sound which prompted the report in the first place) nor do they share the recommendations by the consultant. While the district is entitled to redact what amounts to an inter-departmental report, why would they? What exactly is in this report that they want to hide? What has been redacted is primarily analysis by Orifici and his recommendations on how to fix the problems he has identified. Why hide that? And why no criminal referrals for these contractors who ripped off taxpayers?
The report evaluates 6 projects, four by Wager Contracting (Gregory R. Wager) and two by G.R.W.. Plumbing (George R. Wood). Based on this report alone, it is amazing that Gregory R. Wager and George R. Wood are not facing criminal charges for fraud, theft, falsified billing records, and more. The same can be said for John Gallagher and John Quinn. G.R.W. Plumbing is the same company that was caught illegally handling and disposing of asbestos at Davis Elementary School, was banned as a vendor by Korostoff and then somehow was allowed by the Purchasing Department under Quinn to circumvent Korostoff and submit bids for new contracts (and won all three bids). Korostoff ultimately threw out those bigs and the work went to other companies.
Bob Marrone of WFAS has asked me twice on air including again this morning whether the title of this series "New Rochelle Board of Education: Criminal Enterprise Masquerading as an Educational Institution" is too harsh or a form of hyberbole. The title is neither harsh nor hyperbole but rather a simple, accurate declarative statement. That the uninformed find this to be shocking does not change that. The Orifici Report speaks for itself. I believe this report demonstrates that Wager, Wood, Gallagher and Quinn were engaged in a criminal conspiracy to defraud the school district, that this was accomplished by co-opting employees in the Buildings & Grounds Department and the Finance Department (Ellen Bruzzese, Lori Swink, Fran Debartolo, Ena Saunders, Alison Dixon, Carol Amorello, Lynda Greenbaum and others) and get them to issue payments for projects that should not have been paid for amounts that could not be justified for work that was not done or done poorly and that there has been and is now an ongoing effort by Schools Superintendent Dr. Brian Osborne, Jeff Kehl, and the entire New Rochelle Board of Education (Lianne Merchant, Rachel Relkin, Valerie Orellana, Jeffrey Hastie, Naomi Brickel, Sal Fernandez, Pam Davis, Chrisanne Petrone, and, last but certainly not least, David Lacher) to cover this up. As this has been going on for years, I would also include past administrators and board members like Richard Organisciak, Linda Kelly, Tom Ryan, Dee Polow, Mary Jane Reddington, Jerome Smith, Quay Watkins, and any other board member who sat by and did nothing which would be all of them. I would also throw in New York State Comptroller Thomas DiNapoli, Brian Conway at the Westchester County DIstrict Attorney's Office and the auditors at O'Connor Davis, foremost among them partner Scott Oling to name but a few.
To put this in dollar terms, Wager agreed to pay $50,000 when confronted with the Orifici report; G.R.W.. Plumbing (George R. Wood) overcharged $8,000 or a a single $14,000 contract and has not paid back a dime. That's $58,000 on just 5 projects. I have files on over 200 projects. Do the math. At about $12,000 stolen per per project looked at by Orifici, if that is projected over the 200 invoices I have that would come out to be over $2.4 million in overbilling.
Regardless, the report was buried. There has been no follow up investigation to look at all other projects involving Wager and Wood, all projects signed off on by Gallagher and Quinn and to look at other projects by companies I believe to be just as corrupt like F&L Floorworks, Zonzini Masoney, Zonzini Pipeline, J&J Backflow (Jimmy Bonanno's brother), T&G Electric, and others. There has been no audit. Not even a harshly worded letter to Aramark. In fact, they let Quinn and Gallagher walk away and make a deal with Wager Contracting, one of the two corrupt contractors to absolve them of all liability in exchange for a promise to pay the district $50,000 — and there is no record that Wager has paid a dime of the settlement amount even though the first payment was due on August 1, 2014. The work they did on the access ramps still needs to be redone because although the work was done to settle an ADA complaint, the ramps are not even remotely ADA complaint. And, to my knowledge, no effort has been made to notify the U.S. Department of Education Office of Civil Rights that the claim by Richard Organisciak that the work on the planetarium was done according to a stipulation agreement was false.
In any case, I want to get into the Orifici Report. The PDF verison has pictures which show that reapirs supposedly made were not made but I want to get into the findings of the report.
Capital Projects Consulting LLC was engaged by the New Rochelle City School District to review and evaluate the six completed construction projects that were completed under "time & material" contracts bid annually by the City School District of New Rochelle:
1. Wager Contracting Trinity ES Repoint failing masonry (P.O.# 081979 08/22/11)
2. G.R.W.. Plumbing (George R. Wood) Trinity E5 Flagpole (P.O.# 092914 11/05/12)
3. G.R.W.. Plumbing (George R. Wood) NRHS Planetarium Entrance (P.O.# 094414 06/ll/13)
4. Wager Contracting NRHS Planetarium Entrance (P.O.# 012074 09/03/13)
5.Wager Contracting Columbus ES Masonry ( P.O.# 082268 09/06/11)
6. Wager Contracting IEYMS Stone Column (P.O.# 083648 12/22/11)
In all of the above projects, the provided documentation for invoicing approval and payment does not support the approved payments that have been made by the district. The material paid invoices fur represented purchases were not provided. The Certified Payrolls that were submitted did not match the invoiced time. There is no representation from district personnel that the labor and or material was delivered or expended on the specific project.
In other words, none of these invoices should have been paid yet all of them were paid and with taxpayer money.
The following represents the Purchase Orders' amount paid and the estimated value of the work performed
- Wager Contracting Trinity School Repoint falling masonry (P.O.# 081979) [Proposed Value $35,124.00 Total Labor 224 hours Total Material Costs $18,130.40 Total Project Costs $35,124.00 Paid $37,645.47 CPC Estimate N/A]
- GRW Trinity School Flagpole (P.O.# 092914) [Proposed Value $3,981.00 Total Labor 50 hours Total Material Costs $975.00 Total Project Costs $5,005.48 Paid $5,005.48 CPC Estimate N/A]
- GRW NRHS Planetarium Entrance Doors (P.O.# 094414) [Proposed Value $12,918.28 Total Project Costs $14,453.58 Paid $14,453.58 CPC Estimate N/A]
- *Wager Contracting NRHS Planetarium Entrance ADA Ramp (P.O.# 012074) [Proposed Value $272,086.00 Total Project Costs $272,086.00 Paid $272,086.00 CPC Estimate Redacted]
- Wager Contracting Columbus School Masonry (P.O.# 082268) [Proposed Value $7,340.00 Total Labor 68 hours Total Material Costs $2,012.00 Total Project Costs $7,340.00 Paid $7,340.00 CPC Estimate N/A
- *Wager Contracting IEYMS Stone Column Restoration (P.O.# 083648) [Proposed Value $32,940.00 Total Labor 340 hours Total Material Costs $5,943.00 Total Project Costs $34.370.00 Paid $34,370.00 CPC Estimate Redacted]
*Case Studies [one case study redacted but one accidently left un-redacted, see "Construction Document Cost Estimate (NRHS ADA Acessabilty)" below]
P.O.# 081979 08/22/11 Wager Contracting Trinity School- Repoint failing masonry
1. Project had an overrun of $2,521.47.
2. Certified Payroll have information that is retracted.
3. Certified Payrolls do not match invoice.
4. No supporting documents for material is provided.
5. Safety Harnesses were invoiced, were they turned over to district upon completion?
6. No evidence of insurance certificates conforming to district policy were supplied (see appendices for Bid Proposal Form and Insurance Specifications).
P.O.# 092914 11/5/12 GRW Trinity School- Flagpole
1. Project had an overrun of $1,024.48.
2. Certified Payrolls do not match invoice.
3. No supporting documents for material is provided.
4. Material invoices have conflicting information
5. Sixty hours were billed and paid for labor with no supporting documentation
6. Lift rental charges have no corresponding paid invoices
7. No evidence of insurance certificates conforming to district policy were supplied (see appendices for Bid Proposal Form and Insurance Specifications).
P.O.# 094414 6/11/13 GRW NRHS - Planetarium ADA Entrance Doors
1. Project had an overrun of $1,535.31
2. No evidence of insurance certificates conforming to district policy were supplied (see appendices for Bid Proposal Form and Insurance Specifications)
3. This work along with PO Number 012074 exceed the engineering estimate based upon drawings provided by Anthony Pucillo Architects (see appendices).
4. The project exceeds the limit requiring public bidding.
P.O.# 012074 09/03/13 Wager Contracting NRHS- Planetarium Entrance ADA Ramp
1. No evidence of insurance certificates conforming to district policy were supplied (see appendices for Bid Proposal Form and Insurance Specifications)
2. This work along with PO Number 094414 exceed the engineering estimate based upon drawings provided by Anthony Pucillo Architects (see appendices).
4. There is no supporting documents for material is provided.
5. No container receipts were provided to support removal of 30 yards of debris.
6. The invoice presented has 360 hours of labor in the foundations and footing concrete. It also carries an additional 105 hours for the rebar in the concrete. There are no daily reports to validate this claim.
7. Certified Payrolls do not match invoice.
8. Surface preparation, concrete sidewalks, rebar, debris removal, trench excavation, asphalt and concrete removal were billed by unit cost. No provision in their annual contract permits this action.
P.O.# 082268 09/06/11 Wager Contracting Columbus School- Masonry
1. Certified Payrolls do not match invoice.
2. Supporting documents for material provided have conflicting projects.
3. Material invoices provided do not match invoice for services and some are for St John School not IEYMS.
4. Material invoices have conflicting information and are not complete to validate the request for payment.
5. Sixty Eight Hours were billed and paid for labor with no supporting documentation
6. Lift rental charges have no corresponding paid invoices.
7. Markup is inconsistent with other invoiced projects.
8. No evidence of insurance certificates conforming to district policy were supplied (see appendices for Bid Proposal Form and Insurance Specifications)
P.O.# 083648 12/22/11 Wager Contracting IEYMS Stone Column Restoration
Beyond the findings on the individual projects, CPC finds:
- The projects have no methodology to confirm that actual workers are on site for the period in the invoices. If this is occurring no evidence is presented at the time of payment.
- The payroll is not accurately supported by corresponding Certified Payroll Reports.
- The material component of the work is not substantiated with paid invoices.
- There is no evidence that material was actually utilized on site.
- No documentation was provided that required insurance and indemnifications were submitted prior to the start of work and remained in effect throughout.
- Material Mark ups are inconsistent on the representative projects.
- Evidence that all material purchased was Tax Exempted.
Jeff Kehl appears to have missed redacting one page
Construction Document Cost Estimate (NRHS ADA Acessabilty)
P.O.# 094414 GRW NRHS Planetarium Entrance Doors
Proposed Value $12,918.28
Total Project Costs $14,453.58
CPC Estimate $6,444
District overpaid $8,009.58
So, on a GRW project projected to cost about $13k the district ended up paying about $14.5k and so overpaid about $8k.
This figure and the deal with Wager to refund $50,000 should give folks a good sense of just how much graft was built into the invoices and why you might think the distrit might want to audit EVERY invoice.
I want to get into the remain 194 invoices and to appreciate that you are going to need to read my primer: How Public Works Contractors Get Paid by the New Rochelle School District.
As you read it you will note the section on PROCESS FOR SUBMISSION, VERIFICATION/ACCEPTANCE AND PAYMENT OF INVOICES where I left out the names of the persons responsible. Here is that section WITH the names as of the time I wrote this article so, of course, Gallagher and Quinn have been since been fired.
Any work to be done required a Purchase Order generated by the Purchasing Manager (Ellen Bruzzese).
After the work is done, an Invoice is submitted for payment by a Contractor to the Director of Environmental Services (was ARAMARK consultant John Gallagher now is ARAMARK consultant Artie Riviera)
If all is not in order, the Director of Environmental Services will return the invoice and related documents to the Contractor.
If all is in order, the invoice is given to the Assistant to the Director of Environmental Services (Lori Swink) who matches the invoice and any attachments to the Receiving Report— a hard copy or of the PO on file — and sends the invoice to Accounts Payable.
Accounts Payable (Fran Debartolo) vouches the invoice — collecting and organizing the necessary documentation and approvals — placing a Voucher as a cover page and attaching the Contractor’s Invoice, the District’s Purchase Order, the Receiving Report, and other information needed to process the Contractor invoice for payment (authorizations, receipts, etc.).
If all is not in order, Accounts Payable returns the Invoice to Environmental Services.
If all is in order, Accounts Payable places the Vouched Invoice on the Bill Schedule for review by the Internal Claims Auditor.
The Internal Claims Auditor (Ena Saunders) audits the Vouched Invoice.
If all is not in order, the Internal Claims Auditor will return the Vouched Invoice to Accounts Payable.
If all is in order, the Internal Claims Auditor approves the schedule for print as check or EFT form.
A Clerk (Alison Dixon) prints the check or EFT form and presents it to the District Treasurer for signature.
The District Treasurer (Carol Amorello) signs the checks or authorizes the EFT so that payment is made to the Contractor.
The Business Office is is run by the Assistant Superintendent for Business & Administration (was john Quinn now is Jeff White) and the Deputy Business Manager (Lynda Greenbaum).
It is a good thing that John Gallagher and John Quinn are now gone. Even my biggest critics would have to admit that a few years ago no one could imagine Quinn and Gallagher being shown the door and yet that happened last summer and I will submit that it was entirely because of reporting by Talk of the Sound (a credit to those who have supported my work over the years as much as me personally).
The folks that remain -- Ellen Bruzzese, Lori Swink, Fran Debartolo, Ena Saunders, Alison Dixon, Carol Amorello, Lynda Greenbaum and others -- knew what was going on, participated and said nothing. I realize that when you are in a job and the people around you, including your bosses, especially when it includes your bosses, it is very difficult to resist the pressure but the fact is that all of the people in the finance department failed to do their job and allowed a massive amount of improper payments to be made, costing the taxpayers millions of dollars. I do not see how any of these people can credibly remain in the finance department. I am not saying they should be fired (some should) but they should be offered an opportunity to transfer to a new position within the district (and outside of the Central Office), allowed to retire or take a job elsewhere.
Next we will take a look at one of my favorite invoices that I have yet to report on -- the $60,000 hole in the ground.