In response to an investigation by THE CITY, Mayor Eric Adams pulled the plug on the unlicensed firm that’s been providing security at hotels where inmates released from Rikers and state prisons have been placed as part of an effort to curb the spread of COVID-19.
The mayor ordered a “comprehensive review” of similar pandemic-related emergency contracts and referred the matter to the city Department of Investigation. The cost of the inmate hotel program that relied on the unlicensed security firm rose from $835,000 to $55 million in 16 months, and City Hall plans to spend another $40 million on it through June.
On Friday, Adams’ team confirmed that Global Operations Security told the Mayor’s Office it was “licensed, insured and operating in full compliance with the City, State and Federal Regulations,” but that the firm’s owners could not produce a copy of a valid license.
“After a careful review of the initial contract, it appears that Global Operations Security, Inc., misrepresented itself as a licensed security vendor, in potential violation of State law,” Adams’ spokesperson Jonah Allon told THE CITY on Friday. “We take this situation very seriously, and have referred it to the Department of Investigation.”
Allon said Global stopped providing security at the hotels March 14, a day after THE CITY published its report raising serious questions about whether the firm had a license and revealed that a female inmate had alleged she was sexually assaulted at one of the hotels where Global was in charge of security.
After THE CITY requested the license number of the firm providing security at the hotels, the mayor’s office provided the number of a firm that then said it had nothing to do with the hotel program and did not know why City Hall was claiming they were.
Since then, the New York Department of State confirmed that Global Operations Security Inc. is not licensed to provide security in New York, and referred the matter for potential criminal prosecution to the state Attorney General and the Queens District Attorney.
On Friday, Adams ordered the newly formed Mayor’s Office of Risk Management and Compliance to join with the Mayor’s Office of Criminal Justice (MOCJ) and the Mayor’s Office of Contract Services “to jointly conduct a comprehensive review of all similar contracts and to provide any information and support requested by DOI,” Allon noted.
In announcing the formation of the Risk Management unit in January, Adams promised to review all city contracts over $10 million. On Friday, Allon stated, “This administration will not tolerate attempts to exploit vulnerable populations or abuse taxpayer resources. We thank THE CITY for their investigative reporting into this matter.”
‘Complete Lack of Caring’
At the start of the pandemic, in April 2020, former Mayor Bill de Blasio’s team, via MOCJ, hired a non-profit called Exodus Transitional Community to administer the program to place inmates released from prisons into hotels during the pandemic. Exodus’ emergency, no-bid contract started at $835,000 and quickly rose to $55 million.
Soon after the program began, Latoya Walker, 32, was released from Rikers and placed in one of the hotels managed by Exodus, the Wyndham in Fresh Meadows, Queens. At the time, Global Operations Security was identified by Exodus as the firm handling security there.
That August, Walker alleged she was sexually assaulted by an Exodus caseworker at the Wyndham. The worker was arrested, but the charges were later dropped due to delays by the Queens DA in bringing the case to trial. Walker subsequently brought a civil suit against Exodus, which is pending in Manhattan Supreme Court.
Walker’s attorney, Andrew Buzin, questioned how Global wound up doing security in hotels where inmates were placed without the required license.
“It reflects a complete lack of caring on their part, to expose residents to dangerous situations without even having a licensed security company in place in case something were to happen,” Buzin said of Exodus and the city officials who signed off on the arrangement. “It’s either fraud or negligence, accepting some company’s representation that they’re licensed without checking.”
City Hall said Global was originally brought in by an unnamed city agency, and Exodus President Julio Medina has said they were already on board when his group took control of the inmate placement program. But neither government officials nor Exodus checked on Global’s license until after THE CITY began its inquiry.
Exodus’ contract was awarded on a no-bid basis because it was deemed an “emergency” as part of the city’s battle to curb the spread of COVID-19. As a result, the city comptroller — who normally oversees all city contracts — had no oversight of this one and hundreds of others awarded as the pandemic took hold.
By October 2020, city agencies had run up $4.1 billion in emergency COVID-related contracts, none of which were subject to oversight by the city comptroller. Then-Comptroller Scott Stringer ultimately demanded that de Blasio begin turning over these contracts to his office for review. After initially balking, the mayor complied.
Before winning the inmate hotel job, Exodus had only provided job placement and counseling to released inmates, under much smaller city and state contracts.. After taking on the hotel work, revenue from its city contracts skyrocketed.
In January, Adams awarded another no-bid contract to Exodus to continue placing released inmates in hotels, this one for $40 million through June. In this case, however, Comptroller Brad Lander will be able to register the contract under the usual rules.
Lander is expected to weigh in by the end of this month. According to the city charter, the comptroller may reject registration if he determines “there is sufficient reason to believe that there is possible corruption in the letting of the contract or that the proposed contractor is involved in corrupt activity.”