Author Archives: Info Center

‘Internal control weaknesses’ remain in city’s handling of computer contracts in wake of CityTime scandal: investigators

Source: Greg B. Smith, New York Daily News, July 25, 2014

Five years after the CityTime scandal surfaced, “weaknesses” in hiring and oversight continue to pose threats to the city’s big-ticket technology contracts, a Department of Investigation analysis has found. The DOI reviewed how the city handles large-scale computer contracts in light of CityTime — the fraud-plagued project to modernize the city’s payroll system that was projected to cost $63 million but ballooned to more than $700 million and led to prison time for three computer consultants….

DOI Issues Report From Its CityTime Investigation On Lessons Learned And Recommendations To Improve Management Of Large Information Technology Contracts
Source: The City of New York, Department of Investigation, Press Release, Release #13-2014, July 25, 2014

…Specifically, the Report found the City did not implement proper internal controls and other management safeguards to prevent substantial cost overruns and delays in connection with CityTime, and failed to detect the enormous fraud against the City and its tax payers. The deficiencies exposed include:
∙ inadequate executive oversight of the project by City officials;
∙ failure to appoint an integrity monitor;
∙ failure to control the expansion of the scope and cost of the project
∙ failure to hold contractors accountable for their inability to provide deliverables on schedule, and within budget;
∙ failure to properly vet contractors and subcontractors for conflicts of interest and potential fraud; and
∙ failure to plan for future City control over management and maintenance of the completed projects….

Three sentenced for $100 million fraud in botched automated payroll project in New York City
Source: Gregory N. Heires, New Crossroads, April 30, 2014

The conviction of three consultants charged in a $100 million fraudulent scheme involving a project to modernize the payroll system in New York City offers yet another lesson of the perils of contracting out. On Monday, the three defendants each received sentences of 20 years in prison for their role in implementing the automated payroll system known as CityTime, whose cost mushroomed from an initial budget of $63 million to more than $700 million over more than 10 years.

Three men involved in $100M CityTime fraud sentenced to 20 years in prison
Source: Daniel Beekman, New York Daily News, April 28, 2014

Gerard Denault, Mark Mazer and Dmitry Aronshtein were found guilty in November of siphoning away nearly $100 million associated with CityTime in a kickback and money laundering scheme. A Manhattan federal judge gave the men the maximum sentence for each count Monday, but will allow the sentences to be served concurrently, meaning each will spend about 20 years behind bars.

Three Contractors Sentenced to 20 Years in CityTime Corruption Case
Source: Benjamin Weiser, New York Times, April 28, 2014

A federal judge in Manhattan on Monday sentenced three men to 20 years in prison for their roles in the scandal-ridden payroll modernization project known as CityTime, and he also sharply criticized New York City’s contracting procedures for what he called a lack of “adequate and effective oversight.” The sentences fell far short of what federal prosecutors originally sought, but they were substantially more than others imposed in public corruption cases in the city and state. Originally budgeted to cost the city $63 million, the project skyrocketed in cost to $700 million by 2011, a federal indictment charged. Almost all of the more than $600 million that the city paid to its prime contractor, Science Applications International Corporation, “was tainted, directly or indirectly, by fraud,” the indictment said….

CityTime Trial Begins: Ripoff by Consultants Or ‘American Dream’?
Source: Mark Toor, The Chief, October 21, 2013
(subscription required)

Three men accused of theft, money-laundering and bribery in the CityTime case bilked the city of millions of dollars, stuffing safe-deposit box after safe-deposit box full of bills and shipping some of the money “all the way around the world and back again,” a prosecutor said in opening arguments Oct. 16. Assistant U.S. Attorney Howard Master listed what he said were the defendants’ ill-gotten gains: “Mark Mazer, 30 million dollars. Gerard Denault, nine million dollars. Dmitry Aronshtein, five million dollars. That’s how much money these three men pocketed.” The defendants were paid hundreds of thousands of dollars a year each, he said, “but their legitimate earnings did not satisfy their greed.” Mr. Mazer and Mr. Denault overbilled the city for independent contractors they hired to do computer programming for the project, he said, and Mr. Aronshtein paid bribes to Mr. Mazer for a piece of the lucrative contracting business….

…The money at issue flowed from fees the city paid for the hiring of independent contractors. Mr. Shargel gave an example of how the staffing situation worked. The city agreed that it would pay $129.10 per hour to SAIC for each Specialist 1 hired. SAIC would pay Technodyne, the contractor in charge of staffing, $110.30 per hour. Technodyne would parcel the requests out among staffing companies, which would get $102.53 per hour. Mr. Shargel gave examples of four consultants hired by the staffing companies who would earn $47 to $52 per hour….

Mayoral candidate Bill Thompson failed repeatedly as controller to intervene as payroll system CityTime ballooned in costs
Source: Greg B. Smith, New York Daily News, July 1, 2013

Bill Thompson signed off on seven authorizations to increase money for CityTime. Federal prosecutors called it a “fraudsters’ field day that lasted seven years.” The effort to modernize the city’s payroll system — a project called CityTime — began with high hopes: a promise of huge savings by bringing the pen-and-paper timekeeping systems for city workers into the 21st century. But from an initial price of $73 million, city spending ballooned to more than $700 million. Some $500 million of that money disappeared into a vast network of overseas bank accounts. Ten people would be indicted. ….

SAIC sacks 3 execs in wake of CityTime scandal probe
Source: David Hubler, Washington Technology, October 25, 2012

CityTime scandal hits SAIC’s bottom line
Source: David Hubler, Washington Technology, March 21, 2012

Contractor Strikes $500 Million Deal in City Payroll Scandal
Source: Michael M. Grynbaum, New York Times, March 14, 2012

SAIC still haunted by CityTime scandal
Source: David Hubler, Washington Technology, December 07, 2011

New York’s $600 Million Fraud Shows Privatization Doesn’t Pay
Source: Mischa Gaus, Labor Notes, July 27, 2011

City Payroll Project Was Riddled With Fraud, U.S. Says
Source: David W. Chen and William K. Rashbaum, New York Times, June 20, 2011

Company Involved in Payroll Project Shuts Down
Source: David W. Chen, New York Times, June 1, 2011

A New Jersey technology company that had been a major contractor on the Bloomberg administration’s troubled CityTime payroll project has abruptly halted operations and terminated its employees’ contracts amid a widening federal investigation, according to a company memo sent out late Tuesday night. The top two executives of the company, TechnoDyne L.L.C., have also left the country and returned to their native India….The United States attorney’s office in Manhattan and the New York City Department of Investigation have accused several employees of CityTime contractors of defrauding the city in an $80 million scheme that began in 2005. But even before the accusations, the automated payroll project had become a liability for Mayor Michael R. Bloomberg because of its costs, which have climbed to about $700 million after an initial estimate of $63 million. On Friday, investigators charged the project’s senior manager, Gerard Denault, with receiving over $5 million in kickbacks, as well as wire fraud conspiracy and money laundering. Mr. Denault urged his employer, Science Applications International Corporation, to hire TechnoDyne as the project’s main information technology subcontractor. TechnoDyne, based here, received $464 million out of $628 million that was paid to Science Applications International. According to the complaint, TechnoDyne funneled $5.6 million to a sham consulting company owned by Mr. Denault via three companies affiliated with TechnoDyne, including one owned by Padma Allen’s mother, and two others in India….

NYC’s Computer-System Cash-Dump Disaster / New York City threw away a mountain of cash over a new computer system. Now, finally, someone is going to pay.
Source: Graham Rayman, Village Voice, January 12, 2011

Berger, who worked for a CityTime consultant called Spherion, Mazer, and four other people were indicted last month for defrauding the city of $80 million… Supposedly acting as “quality assurance” consultants, Mazer, Berger, and their accomplices are instead accused of falsifying payments to shell companies, pocketing the proceeds, and making up phony time cards for work they never performed. The defendants have pleaded not guilty. Bondy, meanwhile, was suspended without pay following the indictments and forced to resign as the head of Bloomberg’s Office of Payroll Administration. He could face indictment as well. Bondy, it emerged, not only was a former CityTime consultant, but had also worked with Mazer in the past, yet he didn’t disclose those ties until years later. Originally slated in 1998 to cost $63 million over five years, CityTime has cost the city more than $760 million over its 12 beleaguered years of existence. Despite all that expense, the system is operating in only about a third of all city agencies. The cost overruns were caused by the vast complexity of the project and changes to the plans, claim Bloomberg officials and the company responsible for building the system, Virginia-based Science Applications International Corp. Nonsense, says a union official who represents city architects and engineers, and has closely tracked the project. “There’s no way that any problems or changes they had could justify a cost increase of more than 10 times,” says Local 375 vice president Jon Forster, who believes SAIC should face criminal investigation. “In 12 years, we haven’t changed the number of agencies or the number of employees. My sense is that someone saw a gravy train here, and they said, ‘Let’s go for it.'”

Six charged in $80M ‘CityTime’ rip-off
Source: Bruce Golding and David Seifman, New York Post, December 15, 2010

Four consultants to the city’s problem-plagued payroll system were busted today on charges of ripping off more than $80 million in an elaborate fraud and kickback scheme. The wife and mother of alleged ringleader Mark Mazer — who has been paid $4.4 million to help oversee the costly CityTime project — were also accused of helping launder proceeds of the five-year flimflam. According to a complaint filed in Manhattan federal court, Mazer steered more than $76 million worth of bogus contracts to firms run by Dmitry Aronshtein, who is believed to be a relative, and Victor Natanzon. To cover up the fraud, the three of them, along with co-defendant Scott Berger, allegedly cooked up phony timesheets intended to justify the spending. Aronshtein and Natanzon then kicked back more than $24.5 million to a series of shell companies controlled by Mazer’s wife, Svetlana, and his mother, Larisa Medzon, the complaint says. The Mazers allegedly used more than $3 million of their crooked cash to buy and renovate two homes, and also splurged on six late-model cars over the past two years.

Fraud Charges in New York’s Payroll Overhaul
Source: John Eligon, New York Times, December 15, 2010

Computer Scamsters Took Mayor Mike to Cleaners for $80M
Source: Tom Robbins, Village Voice, December 15, 2010

Controller John Liu orders firm to fix disastrous CityTime payroll system – or ELSE!
Source: Juan Gonzalez – NY Daily News, September 29, 2010

City Controller John Liu has won a huge victory for New Yorkers by finally shutting down the out-of-control CityTime spigot. Liu successfully rebuffed pressure from Mayor Bloomberg to sign off on another $130 million, three-year contract extension for defense giant SAIC to complete the computerized timekeeping and payroll system that is already years behind schedule and more than 10 times over budget. At the same time, Liu has halted the city’s use of biometric hand scanners – a sore point with city unions.

Statement by DC 37 Executive Director Lillian Roberts on CityTime

Audit Report on the Office of Payroll Administration’s Monitoring of the Oversight of the CityTime Project By Spherion Atlantic Enterprises LLC
Source: New York City Comptroller’s Office, Bureau of Audit, FM10-135A, September 28, 2010
See also: Audit brief

City Hall’s Budgetary Exuberance May Soon Fade Away
Source: by Glenn Pasanen, Gotham Gazette (NY), July 13, 2010

….. The CityTime computerized payroll project, significantly over budget, is “a prime example” of mismanagement, according to the comptroller. Juan Gonzales in a June 4 Daily News column pointed out that this system has already cost $700 million, 10 times its original estimated cost. It is not near completion, and the mayor is spending another $100 million on it this year. Earlier in the year the Daily News found that 230 private CityTime consultants received an average of $400,000 each this year. (City computer technicians cost an average $77,000 a year.) At a June 16 labor rally outside City Hall, Lillian Roberts, executive director of the city’s largest union, District Council 37, argued that a 15 percent reduction in city consultant contracts would save over $316 million and thus eliminate all service cuts and preserve city jobs.

‘Consultants’ getting $722M from city for doomed CityTime computer project
Source: Juan Gonzalez, Daily News (NY) Friday, March 26th 2010

The city is paying some 230 “consultants” an average salary of $400,000 a year for a computer project that is seven years behind schedule and vastly over budget. The payments continue despite Mayor Bloomberg’s admission the computerized timekeeping and payroll system – called CityTime – is “a disaster.” Eleven CityTime consultants rake in more than $600,000 annually, with three of them making as much as $676,000, city records obtained under a Freedom of Information request show….

Citytime contract: 1,000% over budget
Source: Diane S. Williams, Public Employee Press (NY), February 2010

DC 37 leaders blasted a 1,000 percent cost overrun on a computer contract — still unfinished after 12 years — that the city gave to former Giuliani officials with ties to the Bloomberg administration. They testified Dec. 18 before the City Council Contracts Committee, which is investigating how the $63 million Citytime deal ballooned to $700 million as the city budget went into the red and the mayor laid off employees….

Library board taps Bartholomew for contract with county

Source: Damian Mann, Mail Tribune, July 14, 2014

A newly formed library board has selected Medford lawyer Mark Bartholomew to represent it and help negotiate a more-than-$8 million contract with Jackson County. The board will pay Bartholomew $200 an hour and decided to turn down an offer by retired lawyer Bill Mansfield to work free of charge…. The contract with the county is a complicated legal document in which the county assumes administrative functions of the library district and contracts with LSSI for the management of the libraries. The current cost to operate the libraries for a year is $6.5 million, but the contract is for a more than 16-month period, rather than a year, because property taxes won’t be collected until November….. The library district was formed July 1 with the passage of Ballot Measure 15-122, designed to provide a permanent source of funding for all 15 library branches after county budget woes threatened to close them. Passed May 20, the measure allows the district to tax Jackson County property owners up to 60 cents per $1,000 in assessed value each year….
LSSI begins labor talks / NLRB complaint means workers rehired by library firm will still be unionized
Source: By Damian Mann, Mail Tribune (OR), February 13, 2008

A private firm that operates Jackson County’s 15 libraries is being forced to recognize that a majority of its employees are members of a union to resolve a complaint filed with the National Labor Relations Board. “It means library employees will have their union back and more of a voice at their work,” said Pauline Black, a library assistant in Ashland. Service Employees International Union Local 503 filed an unfair labor practice complaint again Library Systems and Services LLC on Dec. 18, 2007, with the National Labor Relations Board, which was scheduled to rule on the matter later this week….. Frank Pezzanite, president and chief executive officer of LSSI, said he wants to work with the union but his company did not envision it would enter into bargaining talks when it signed a contract with Jackson County to operate libraries.

Workers Get A Voice! BIG win for S. Oregon!!
Rogue Valley Independent Media, February 2008

Public libraries find outside management
Source: Annie Gentile, American City and County, Jan 1, 2008

……. In April, Jackson County, Ore., closed all 15 of its public libraries after the county lost $23 million from timber receipts after Congress failed to renew the Secure Rural Schools and Community Self Determination Act. County officials twice attempted to increase taxes for additional library funding, but both efforts were voted down, says County Administrator Danny Jordan. With no options left, the county closed the libraries, laying off 81 employees. … In October, the county contracted with Germantown, Md.-based Library Systems and Services (LSSI) to operate all 15 branches for five years for $27 million less than the county would have to spend to operate them in-house….

Video: Profiting from the GI Bill

Source: Aaron Glantz, Adithya Sambamurthy, Center for Investigative Reporting, July 7, 2014

The post-World War II GI Bill helped veterans live the American Dream. But a new GI Bill designed to help those returning from Iraq and Afghanistan is coming under fire. The Center for Investigative Reporting found more than $600 million dollars in GI bill money had gone to hundreds of for-profit schools in California with low graduation rates and high rates of student loan default.

For-Profit Schools Under Fire For Targeting Veterans

Source: Larry Abramson, NPR, Morning Edition, April 5, 2012

Hundreds of thousands of veterans have returned from Iraq and Afghanistan in recent years, eager to get an education under the new post-Sept. 11 GI Bill.

Many vets looking for a school find they are inundated by sales pitches from institutions hungry for their government benefits. Now, lawmakers are looking for ways to protect vets without narrowing their education choices….Some members of Congress are worried that for-profit schools are ripping off the government by luring students into programs that seldom lead to good jobs..

…..Concern about the lead generators’ sales tactics has prompted Congress to explore tighter limits on the public funds that can go to for-profit colleges. But Sweizer says limiting government funding would just hurt the schools that are trying to deal honestly with vets. Instead, he says, schools that don’t deliver what they promise should be punished.

Kentucky prison food contract up for bid

Source: Adam Beam, Associated Press, July 4, 2014

The $12 million contract to feed Kentucky’s 21,200 prison inmates is up for bid for the first time since a 2010 audit found significant problems with the state’s current contractor. But some of Kentucky’s biggest critics of Philadelphia-based Aramark now say they are satisfied with the company’s response to the criticism. …. Aramark’s contract expires at the end of this year, and Kentucky officials have already put out a request for proposals and hope to decide on a contractor by September. Aramark spokeswoman Karen Cutler confirmed the company would be bidding again for the contract. … But Aramark could be getting some competition. South Dakota-based CBM Managed Services is considering bidding on the contract…..
Audit: State overpays by thousands of dollars on prison food contract
Source: Valarie Honeycutt Spears, Herald Leader, October 8, 2010

An audit of the state Department of Corrections’ $12 million food service contract with Aramark Correctional Services has found that the state is overpaying the company thousands of dollars a year and is not ensuring that Aramark serves the proper quantities of required ingredients or meets its obligations. State Auditor Crit Luallen released the report Thursday.

Jefferson Parish contracting changes are proposed, after death of their most vocal advocate

Source: Adriane Quinlan, The Times-Picayune, June 10, 2014

Two weeks after political activist Margie Seemann died, contracting reforms that she long advocated are headed for a vote by the Jefferson Parish Council. The proposal, on the council’s agenda Wednesday, would limit the council’s discretion in awarding contracts by placing the decision largely in the hands of a technical committee that must consider a price in its evaluation. The changes were put forward by Councilman Chris Roberts, who worked with Seemann and her group, Citizens for a Good Government. The group sought to curtail the council’s discretion in awarding contracts, with the intent of limiting the influence of contractors that make political contributions to politicians, said Seemann’s sister, Margaret Baird.

Jefferson Parish Contracting Reform Proposal Misses the Mark
Source: Bureau of Governmental Research, February 26, 2013

The Jefferson Parish Council has released a draft ordinance that would make changes to the parish’s process for evaluating and awarding contracts for nonprofessional services. The proposal comes following pressure from the media and citizens to revamp contracting processes that stand far apart from norms and best practices. While the proposal makes some welcome changes, it is problematic in several respects and fails to meaningfully address a fundamental weakness: the council’s extraordinary discretion over contract elections.

Private Services in the Public Interest: Reforming Jefferson Parish’s Unusual Approach to Service Contracting
Source: Bureau of Governmental Research, May 2012

From the press release:
Today BGR releases Private Services in the Public Interest: Reforming Jefferson Parish’s Unusual Approach to Service Contracting. The report shines light on contracting processes that are highly irregular and uniquely vulnerable to abuse.

Jefferson places the power to select contractors with the Parish Council instead of the executive branch, an abnormal approach for a government with an elected executive. But as the report reveals, this abnormality is relatively minor compared to a second one: the Parish Council’s nearly unfettered discretion in the selection of contractors. The Parish Council is free to ignore the work and recommendations of evaluation committees and make its own selections.

Making matters worse, the council regularly defers to the council member in whose district the contracted service will be performed.

Twelve Months Later: The Impact of School Closings in Chicago

Source: Carol Caref, Sarah Hainds, Pavlyn Jankov with assistance from Brandon Bordenkircher, Chicago Teachers Union Research Department, 2014

From the press release:
The Chicago Teachers Union (CTU) released today a report on the state of Chicago Public Schools (CPS) one year after the Board of Education (BOE) voted to close 49 elementary schools and one high school program, the largest, one-time school closing action in U.S. history and a decision made in the wake of massive opposition and protests throughout the city of Chicago.

The study, titled “Twelve Months Later: The Impact of School Closings in Chicago,” looks at what happened as a result of the mass school closings of 2013, and answers such questions as: Were CPS promises for receiving schools kept? How much money was saved? Did resources increase at affected schools? Have services increased for special education students at consolidated schools.

On May 22, 2013, Mayor Rahm Emanuel’s handpicked BOE shuttered 50 neighborhood school communities, “turned around” five schools and co-located 17 others. Faced with widespread opposition to this action, CPS promised hundreds of millions of dollars in capital improvements and transition supports for schools receiving students from closed schools. CTU examination of the evidence has found, however, that promises made to receiving schools were hollow in many cases and only partially fulfilled in others. Among the findings:
– Receiving schools are still disproportionately under-resourced compared to other elementary schools.
– Students were moved to schools with libraries, but funds weren’t available to hire librarians. Just 38% of receiving schools have librarians on staff, whereas across CPS, 55% of elementary schools have librarians.
– Computer labs were upgraded at receiving schools but only one-fifth of these schools have technology teachers.
– CPS touted iPads for all receiving-school students, but included few related professional learning opportunities for teachers.
– CPS spent millions on large-scale programmatic changes at 30 elementary schools, but the success and continued funding of STEM and IB programs remain to be seen….
Despite Community Pleas, Three Chicago Schools Slated for Privatization
Source: Kyle Lydersen, In These Times, Working In These Times blog, April 24, 2014

The Chicago Board of Education’s vote on Wednesday to convert three public elementary schools into “turnaround schools” run by the non-profit Academy for Urban School Leadership (AUSL) was no surprise to most parents and teachers. The board has consistently voted to close schools or turn them over to private management—laying off most of the staff in the process—despite overwhelming opposition, anxiety and outrage expressed in heartfelt testimony by parents, teachers, students and elected officials at scores of public meetings…..Even before the April 23 meeting, the board members should have been well aware that public sentiment stood firmly against “turning around” McNair Elementary, Gresham Elementary and Dvorak Technology Academy, all of which are in predominantly African-American neighborhoods. …. AUSL already runs 29 Chicago schools with more than 17,000 students. Now it will take over the three elementary schools in the fall, and 147 employees, including 76 teachers, will lose their jobs. The school district says that the teachers will be allowed to reapply for their jobs and that about 60 percent of teachers laid off from turnaround schools receive positions somewhere in the Chicago public-school system by the next fall. But these jobs can be anywhere in the city, offering little consolation to parents who emphasized how teachers at neighborhood schools are like family to the students, especially since multiple generations have attended the same schools and even had the same teachers…..
Protestors Brave Sub-Zero Weather in Bid To Freeze Chicago’s Charter Expansion
Source: Matthew Blake, In These Times, Working In These Times blog, January 22, 2014

On Tuesday night, a few dozen die-hard Chicago Teachers Union members and students braved the bitter cold to hold an overnight candlelight vigil outside the Chicago Public School’s downtown headquarters, protesting the expansion of charter schools in the city. … In spite of the so-called polar vortex sweeping over the Windy City, a few dedicated souls even camped outside headquarters overnight until the CPS Board of Education arrived Wednesday morning to consider adding 17 new charter school campuses from eight separate charter networks. But the board, following the recommendations of CPS officials, voted to approve seven of the charter applications. … Despite the early promise of charters for labor, their faculties continue to be almost entirely non-union. Moreover, there is arguably little evidence charters improve student performance, while there is plenty to show charters weaken organized labor. Chicago began to build charters in 1997; they now make up 138 of the district’s 658 schools. The school board recently opened 15 new charter campuses after closing 48 neighborhood public schools in summer 2013…..

Chicago charter schools rake in thousands in ‘disciplinary fees’
Source: Traci G. Lee, MSNBC, January 3, 2013

As public funding for Chicago charter schools increases, so do questions about accountability and governance within these publicly-funded–but privately-run–institutions. According to the Chicago Public Schools’ 2013 budget, charter schools will receive nearly $483 million in funding, up more than 13% from funding in 2012. … But a recent report raises red flags on the lack of accountability at one of Noble’s charter schools. Marsha Godard, a parent at Chicago Bulls College Prep, told DNAinfo Chicago that she paid nearly $2,000 in fees to keep her son at school. … Godard’s son was fined for various offenses, including an unkempt appearance and not making eye contact. Other items in Noble’s strict student code include ”chewing gum, possessing soft drinks or energy drinks like Red Bull, eating chips, not tucking in a shirt after being warned and carrying a permanent marker.”

This is not the first time the Noble Network has received criticism for the fees. In February, parents protested the Noble Network for charging fees as disciplinary action. According to the Chicago Tribune, Noble raked in approximately $200,000 in disciplinary fees in 2011 and almost $400,000 since the 2008-09 school year….

CPS plans 60 more charters in 5 years
Source: Noreen S. Ahmed-Ullah, Chicago Tribune, May 16, 2012

Chicago Public Schools plans to create 60 more charter schools over five years, which would increase the share of privately run charters to about a quarter of all schools in the district. The plan for charter growth, part of a larger proposal for 100 new schools over the same five years, is laid out in an application seeking $20 million for charter schools from the Bill & Melinda Gates Foundation. Right now the district’s 675 schools include 110 charters, which get tax dollars but are privately controlled. Private organizations also operate an additional 27 schools, 19 of which are managed by the Academy for Urban School Leadership….

Can a New Police Force Turn Around Camden, N.J., One of the Nation’s Most Violent Cities?

Source: Mike Maciag, Governing, June 2014

In hopes of reducing the city’s high crime rate, Camden, N.J., made a controversial and unprecedented move a year ago to replace its police force.
Camden County Police Take Over, City Agency Disbanded
Source: Paul Clinton, POLICE Magazine, May 2, 2013

A new county police force formally took over law enforcement duties in Camden, N.J., Wednesday, as one of America’s most dangerous cities dissolved its municipal police force. The Camden County Police Department’s Metro Division began operations with 255 officers, including 150 from the Camden Police Department. City officers who didn’t apply were officially laid off Wedesday. Scott Thomson, police chief of the Camden PD, was sworn in as the chief of the new agency. The county force will eventually reach more than 400 officers by the fall and bring a greater police presence to the crime-plaqued city, Assistant Chief Michael Lynch told POLICE Magazine….
Crime-Riddled N.J. City Considers Axing Police Force
Source: Elizabeth Fiedler, NPR, Weekend Edition Sunday, August 19, 2012

Although considered one of the most dangerous places in the country, past budget cuts in Camden, N.J., have forced police layoffs. Now the city is considering even more dramatic steps: replacing the city’s police force with one operated by the county…. Jose Cordero, a consultant who’s been hired to develop and implement the new police force, says that a lot of the labor contracts have been negotiated over many years. They reflect years past and “not necessarily the challenges in terms of both economic challenges and public safety challenges that Camden city faces.” Cordero says the plan is to hire more officers with about the same budget. One way the regional force could save money, he says, is by hiring civilians to do work that is done by police….

EM: Muskegon Heights not a ‘failed experiment’

Source: Dani Carlson,, May 12, 2014

After a breakup with its management company and an emergency loan from the state, the Muskegon Heights school district is looking for another company to run it. But after years of money troubles and splitting with Mosaica Education Inc., 24 Hour News 8 asked the emergency manager if it’s worth it for the district to remain open….

Emergency manager: Mosaica ‘wasn’t a gamble’
Source: Dani Carlson,, April 28, 2014

The company hired two years ago to try to turn around the beleaguered Muskegon Heights school district has a history of running schools with poor academic performance and lawsuits in Michigan, Target 8 found. Muskegon Heights schools is cutting ties with Mosaica Education — the private for-profit company that signed on to run the fledgling charter district — three years before its contract is set to expire. They say the break-up was a joint decision. When Mosaica failed to pay its teachers on time in late March and the district had to ask for an advance from the state to cover payroll, Target 8 started digging into its past and uncovered a history of problems in Michigan school districts reaching back a decade….

Muskegon Heights ends contract with charter school company
Source: Lindsey Smith, Michigan Radio, April 26, 2014

Mosaica Education and Muskegon Heights Public School Academy have come to a mutual agreement to end their working relationship….Both Mosaica and the charter school district agree not to sue one another in the separation agreement. Mosaica will make significantly less money than originally outlined in the management agreement. It will receive $760,000 it fronted the district to make payroll this year. It will also get roughly $84,000 to pay five administrators who are paid directly by the company. Mosaica is waiving all of its management fees; basically it’s agreed to operate the district this year for free. An attorney for the emergency manager said Mosaica received partial payment for operating the schools last year; between $900,000 and $1.2 million….

Muskegon Heights to become K-12 charter school system under emergency manager’s plan
Source: Lynn Moore,, May 25, 2012

In a groundbreaking move, the emergency manager for Muskegon Heights Public Schools is proposing to turn the entire school system into a charter school. Donald Weatherspoon said today he will submit a plan to state officials calling for the creation of a new K-12 charter system. The district’s debt, estimated at $12.4 million, will remain with the current public school district, giving the charter operator a fresh start, he said. No other K-12 charter school system operates in the state.. ..He said he and perhaps one other person would be the sole employees of Muskegon Heights Public Schools. Current staff can apply to work for the new charter system, he said….

The $19 Million ATM Fee: How Better Banking Services Would Protect Our Public Investment in Families

Source: Andrea Luquetta, California Reinvestment Coalition, March 2014

From the press release:
California: A new report released today by the California Reinvestment Coalition reveals that in 2012, over $19 million of state funds meant for family household needs through public assistance programs went instead to ATM fees charged to access the aid provided. The report calls on banks, the State of California, local counties, and nonprofit partners to work together to reduce the amount of money being lost to ATM fees through the CalWORKs program, which serves families with children and accounts for about 85% of the ATM fees.

Study: Welfare recipients spend millions on ATM fees
Source: Michael Finney, KGO-TV, March 25, 2014

Big banks’ ATM fees rip off $19 million from welfare recipients
Source: gloriasb, DailyKos, March 25, 2014

Big banks lifted more than $19 million out of the wallets of poor people in California in 2012, by charging them unnecessarily high fees for withdrawing cash from their EBT [Electronic Benefit Transfer] cards….

….There’s also a lesser known, behind-the-scenes ripoff that the report doesn’t delve into: When someone swipes an ATM card—whether it’s a bank card or an EBT card–the machine reads the information on the magnetic strip and knows which bank is the source of the money. If it’s a card from a different bank, Bank A charges Bank B a nominal fee for the money transfer and the cost of communicating. Usually, the charge is 25 cents or so. [This interbank fee is not seen by the customer, and is not part of the visible ATM fee.]

But here’s the twist: In California, all of the CalWORKS money is held by Bank of America. So, if someone goes to a Bank of America ATM to get cash from an EBT card, Bank of America doesn’t have to communicate with any other bank at all. Bank of America handles 12 percent of all EBT withdrawals in the state—making it the largest processor of EBT withdrawals. And yet, the bank is charging the state the interbank fee. Those 25-cent fees add up, too–or should I say subtract?–and it’s all pure profit for Bank of America….

California’s Welfare Families Paid Banks Millions In Fees For Public Assistance
Source: Janell Ross, Huffington Post Business, November 21, 2011

…Across much of the nation, administering relief programs such as unemployment benefits and emergency rental assistance has become an increasingly substantial profit center for banks and other financial services firms, according to analysts. Like California, many states have contracted with private companies to distribute these funds. While the contracts have saved states millions of dollars in costs previously incurred for printing and mailing out checks, the agreements often give companies the ability to extract fees from recipients — some of the nation’s most vulnerable families….California’s agreement with Affiliated Computer Services, a Dallas-based division of Xerox, to distribute cash welfare assistance, aid for international refugees, utility grants and other emergency support cost the state’s poor nearly $17.4 million in surcharges and fees last year, according to California Department of Social Services data. The spoils went to ACS and many of the nation’s largest banks.

Multinational company to run Maine virtual school

Source: Associated Press, March 16, 2014

With the approval of a virtual charter school, some Maine educators worry the state will be outsourcing education to a multinational corporation. But supporters argue that large private companies can create better and less expensive virtual schools because costs are spread out over a large number of users. Starting next fall, the Maine Connections Academy will get its curriculum, online platform and some of its teachers from an American subsidiary of London-based Pearson LLC.

Multinational giant set to run first virtual school in Maine
Source: Tom Bell, Portland Press Herald, March 16, 2014

Some educators worry about outsourcing control, but supporters say a global company can reduce costs by serving so many users…. The company that would become Connections Education began in 2001 as a spinoff business unit of a company called Sylvan Ventures, which saw potential in new online technology and the growing interest among parents for charter schools and homeschooling, Ochs said. In 2004, that unit was sold to an investor group led by Apollo Management L.P., which in early 2011 created a new corporate entity called Connections Education to focus solely on online learning. In the fall of 2011, Pearson acquired the company, paying $400 million in cash. Connections Education at the time had been posting consistent 30 percent year-over-year revenue growth and annual revenues approaching $190 million….

Special Report: The profit motive behind virtual schools in Maine
Source: Colin Woodard, September 3, 2012

Documents expose the flow of money and influence from corporations that stand to profit from state leaders’ efforts to expand and deregulate digital education….. A Maine Sunday Telegram investigation found large portions of Maine’s digital education agenda are being guided behind the scenes by out-of-state companies that stand to capitalize on the changes, especially the nation’s two largest online education providers. K12 Inc. of Herndon, Va., and Connections Education, the Baltimore-based subsidiary of education publishing giant Pearson, are both seeking to expand online offerings and to open full-time virtual charter schools in Maine, with taxpayers paying the tuition for the students who use the services….