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Public Housing Spotlight

Issue 47
Published on March 6, 2000

(Click Here for NYCHA "preliminary" Audit
by NYC Comptroller Alan Hevesi)

(Click Here for Directory of Issues)

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Here's Looking At You

In the aftermath of the tapes released in Issues 45 (Click Here) and 46 (Click Here), we have again opened some floodgates that had been holding back a flow of NYCHA information.

We have reports on how many Development Managers were resigning (220?) and other Execs being reassigned in the wake of Spotty's reports and the Federal Investigation we forced to commence. (They'll deny it, but everyone that works for NYCHA knows it is true!)

We have received updates on how many folks had to be moved out of the $100,000,000 Long Island City warehouse that NYCHA bought from Finkel's Friends, and how others who were scheduled to move into that building have had their move dates cancelled. Seems Spotty was right about the building being unsafe for NYCHA's stated purpose, a warehouse with some space for offices. But Ruben Schron and other Friend's of Finkel who formed the company that purchased the $8,000,000 building still got their hands on that $100,000,000 of taxpayers' money.

We've come closer to publishing other editions of Spotty. Housing Preservation & Development employees have written us with some info to help prove that there is a lot of "funny business" at NYCHA's near clone of an Agency. And we received info on the fairly new Dept. of Design & Construction that sure looks like they play the phony change order game well at that shop.

At least one other City Agency is vying for their own Spotty, but that Agency info is just beginning to look relevant to our pages.

And, as we stated in Issue 46, we do intend on putting a lot of these type tidbits in an upcoming issue.

However, as many of you have written to ask about the two articles that have been written wholly about NYCHA corruption, or about DOI and various City Agency corruption including NYCHA, in the Village Voice (Click Here) and the NY Post (Click Here) the past couple of weeks, we decided to deal with those two stories in this issue.

So, without further ado, let's start with that City Hall Press Release known as the NY Post.

No, Mr. Seifman did NOT call me in his preparation for that article. He does claim to have spoken with some anonymous source at the NYC Dept. of Investigation, so that would be the only side of this story that received the courtesy of a phone call. So I'll use this space to inform Mr. Seifman what I might have said.

If he had called, and told me of DOI's answer to his questions, we would have asked Mr. Seifman to go back to his source and ask this:

If you had a member of the corrupt ring of inspectors working for DOI from January 1997 through May of 1998, and that Inspector was receiving bribes on a near weekly basis for years prior to his coming to DOI, why did you not get even one arrest in that 18 months?

Why did you not use DiAlto's testimony to get even one conviction?

Why was the ringleader of DiAlto's group allowed to continue working at NYCHA's Contract Admin. Dept., and later transferred to a better paying job?

But the Post never asked those questions. Instead, the story just allowed DOI to whine that their great investigation had been compromised by Polly Kreisman's report that had been based on the charges of a group of NYCHA employees who felt that DOI incompetence or outright involvement in the corruption had compromised the investigation.

First up, let's knock down that DOI straw man. And we'll only use facts that have been proved thus far.

  • 1) I brought Richard (Tony ) DiAlto to Dept. of Investigation/IG investigators on January 6, 1997.
  • 2) In May of 1998, WWOR (Channel 9) aired Ms, Kreisman's report, in which I appeared as an anonymous whistle-blower. Although others didn't appear on the tape, Ms. Kreisman did NOT base her whole report on my statements. She interviewed both people I recommended and others that she sought on her own accord. She did not walk into my home, get hypnotized and write whatever Ballinger wanted. Had that been so, I assure you the report would have been even more devastating than NYCHA and City Hall thought it was at the time.
  • 3) Almost a year prior to that report, in the summer of 1997, The IG (Steve Pasichow) and 3 others from his office met at my local restaurant to talk me out of going public. As by March of 1997 Tony DiAlto had told me that he was pulled off the investigation just when others of our group had been given VERY CREDIBLE evidence of corruption extending well into the Exec ranks of NYCHA. Suddenly, John Kilpatrick and Steve Gruberger (DOI/IG investigators) would not pick up a file of evidence that another inspector had supplied (got them on tape on this) and, unbelievably, they refused to meet with the inspector who had the evidence of Executive corruption at NYCHA.
  • So, when Mr. Pasichow asked me at this September 1997 meeting "What will it take to get you to forget going to the press with this?", I had two requests. First, all the "honest" people who had since faced retaliation for working with the IG were to get back any promotions and assignments that their honesty had cost them, and the "bad guys" would be transferred somewhere that insured they never handled money or did jobs where corruption was a tempting element. This request didn't cause anyone to even blink. It seemed that we were on our way to an agreement.

    But my other request seemed to be a deal breaker.

    I asked that Mr. Pasichow promise that he'd send one of his investigators to speak with the NYCHA employee who would direct them to the evidence of corruption that went high up into NYCHA. Mr. Pasichow looked as if I asked for something that would cause him immense pain. He answered that he'd try. But he could NOT promise to go down that trail.

    To me, that was the deal breaker. Although I still waited 8 more months before going public, in the hope that DOI might surprise me and do its job, and to see if they started using Tony again. (Tony had suddenly been taken off any involvement with the long-time bribing contractors and told that he should only speak with contractors who had never worked with NYCHA in the past. That virtually gave the big contractors, and the NYCHA execs, the free pass they needed to continue raping the taxpayers.)

  • 4) By May of 1998, it was painfully obvious what was happening. DOI had effectively shut down the investigation.
  • Ms. Kreisman did not only speak with me. She interviewed others who were involved. And neither I nor any of the other employees were the ones who told her of NYCHA's prior interest in purchasing an $8,000,000 warehouse in Long Island City. A Realtor from the neighborhood spoke with Ms. Kreisman and told her of that rather interesting bit of news. The Realtor made something obvious: NYCHA was interested in the building when they could purchase it for $8,000,000, but NYCHA did nothing about the building until, shortly after NYCHA visited the building, Finkel's friends bought it and leased it to NYCHA for 20 years at over $100,000,000.

    The Village Voice, disappointingly, was just a DOI press release. Every item of information came directly from DOI. Not one of the people who had participated in the aborted NYCHA investigation was contacted, although the someone from the Voice server had visited our site a few times just prior to the story being published.

    Still, if one reads the whole Village Voice story, one thing becomes abundantly clear. Only low-level employees at City Agencies are ever corrupt!

    As the reporter, Julie Lobbia, writes "Last year alone, the city's Department of Investigation (DOI) nabbed more than two dozen people for allegedly taking or demanding bribes totaling more than $60,000."

    That's right! The NYC Dept. of Investigation brags and/or justifies its existence by proclaiming that in the last year they grabbed "more than two dozen people" who had taken a total of "more than $60,000." Folks, that works out to the Grand Total of less than $2,500 a person.

    If you've listened to Tony DiAlto on audio tape, you know that $2,500 a year wouldn't have stifled a yawn out of Tony and the crew. A single contract brought bribes of up to $30,000 for one inspector.

    If DOI can only nab 24 people for an average of $2,500 a year, our city could save millions by closing DOI!

    © MM Public Housing Spotlight and John Ballinger. All rights reserved.
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    Contact Jack Ballinger at nychaspotlight@netscape.net
    for a Real Audio sound clip containing a
    conversation wherein DOI Investigator
    John Kilpatrick discusses how he learned
    that 2 NYCHA execs attended
    a Mafia connected contractor's funeral .

    Contact Jack Ballinger at nychaspotlight@netscape.net
    for a Real Audio sound clip containing
    the (3 Meg) confession of Tony DiAlto.
    Tony was a member of a group of
    corrupt Contract Inspectors working at NYCHA.
    Neither Tony nor the person he confessed to
    sharing his bribes with (Richard Penesi)
    were ever charged, let alone prosecuted, by DOI.

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    And for a great source of New York City news and
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