The contractor can be heard on tape hesitating as prosecutors say he’s handing over a cash-filled envelope to a man he believes is a city Housing Authority manager.
He’s standing in a Brooklyn public housing elevator, and expresses concern over a surveillance camera in the lift he fears will capture the transaction.
Not to worry, says the NYCHA “manager,” who is actually a city Department of Investigation undercover agent: “It’s not working.”
The man, identified by authorities as Guriqbal Singh, 28, was one of nine NYCHA contractors arrested Monday on bribery charges following a sweeping investigation of “micro-purchase” contracts that don’t require competitive bidding. The entire interaction in the elevator was captured on tape, authorities said.
THE CITY highlighted the potential for corruption with micro-purchase contracts in 2019, noting that DOI had repeatedly warned NYCHA about them.
The smaller contracts were part of NYCHA’s push to tackle a longstanding huge backload of repair requests by allowing on-site managers to award contracts of less than $10,000 without seeking multiple bids.
Competitive bidding is supposed to let the taxpayers get the most bang for their hard-earned buck, but it also slows down the job of hiring vendors.
While the shortcut allowed contractors to be hired quickly, DOI found it also left the NYCHA vulnerable to bribery schemes. The Brooklyn District Attorney’s office and DOI documented evidence of vendors routinely handing over everything from cash to booze to obtain micro-purchase contracts, authorities said.
All told, the nine vendors have won more than $20 million in non-competitive contracts over the last several years, DOI Commissioner Margaret Garnett said Monday.
“This is a challenging one because the idea behind it is a good one that’s intended to be responsive to residents and address issues more quickly,” Garnett said. “I do think that these practices, these kickbacks and bribes, to some [NYCHA] assistant superintendents and superintendents, it’s really part of an ecosystem of people willing to make bribes and take bribes.”
Brooklyn District Attorney Eric Gonzalez said the contractors face charges including bribery, giving unlawful gratuities and offering a false instrument. The contractors mostly performed the requested work, although in one case the vendor submitted fake work orders to get paid for work he did not perform, prosecutors allege.
“This is significant corruption because honest contractors stand no chance of doing the work if you have to corrupt the process in order to be awarded the contract,” Gonzalez said. “The residents of NYCHA often live in conditions that are deplorable. And we definitely need a system that works to their advantage to get things done quickly. But they deserve to have the best contractors to fix items without the corrupt process.”
If convicted, the defendants face sentences ranging from probation to seven years.
The case kick-started in fall 2018 when a NYCHA manager approached DOI after being offered cash. He was then outfitted with equipment to secretly record the transaction.
The watchdog agency then sent in undercover investigators in spring 2019 posing as NYCHA managers at the Red Hook Houses and Lafayette Gardens in Clinton Hill.
Through May, the agents received $20,000 in cash bribes, two $500 gift cards and four bottles of Johnnie Walker scotch worth about a total of $115 in exchange for signing off on contracts to perform mostly minor repair work, from tile installation to fixing busted windows.
Most of the transactions were secretly videotaped, including the interaction between Singh and a DOI undercover agent on Dec. 13, 2019, inside the elevator at the Red Hook Houses.
Prosecutors say Singh, 28, whose father owns A. Peter Luger Construction, handed over $600 in an envelope to the DOI undercover agent posing as a NYCHA manager.
As the “manager” thanked him, an anxious Singh was heard on tape asking, “There’s no cameras here, right?”
The undercover first said no, then clarified, “There is one, but it’s not working.”
Singh responded, “You sure?”
“I’m positive,” the undercover responded. “Trust me. I wouldn’t have touched it if it was. That’s another one that’s on our list of stuff” to fix.
‘We Are Watching’
DOI has recommended various reforms, including removing front-line superintendents from awarding these smaller contracts and turning the job over to a central office where there’s no direct contact with the vendors.
A contractor amassing $250,000 in aggregate contracts is currently enough to trigger a NYCHA review. DOI recommended lowering the threshold to $100,000 in aggregate contracts.
Garnett noted that, in some cases, vendors would inflate the value of their contract without hitting the $10,000 mark. She suggested that NYCHA use a fixed-price system for specific small-bore work.
Rochel Goldblatt, a NYCHA spokesperson, emphasized that an agency worker started the probe by going to DOI.
She added: “We have implemented significant changes to the systems to prevent this type of malfeasance, including updates and modifications to purchasing oversight, how contracts are awarded and tracked, and post-award contract management.”
Gonzalez emphasized that the investigation is far from over.
”We have every reason to believe that there are other superintendents being offered bribes,” he said. “We ask them to come forward. And I want to make it clear that we are watching.”