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Public Housing Spotlight

Issue 7
Published on September 25, 1998

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

(Click Here for Directory of Issues)

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on "NYCHA IG or Not IG?"

That Shouldn't Be In Question

Do you find the term Secret Police unsettling?

Why? Is it the name itself, or does the idea of some unknown group of individuals tasked with watching over you bring out an American's instinctual fear of overbearing government power?

If it were shown that a President, Governor or Mayor had instituted a police force separate from the existing structures, would that upset you? Or, if it were a Government Agency/Authority empowering such a group, would that make you feel better? And, finally, if that secret police group used intimidation to protect it's political sponsor, would you join in demanding a full accounting of both the creation of that entity AND it's policies in dealing with those whom it is policing?

If you're wondering if the Public Housing Spotlight has added paranoia to it's many other faults, please read on.

As resident's of New York City, there are many well-known groups with police powers that protect us. Even a partial listing is impressive. The Federal government protects our interests with Federal Prosecutors and the FBI, and other lessor known, but readily identified, groups. (Special Prosecutors, Federal Marshall's etc.) The State has it's own prosecutor, the NY State Attorney General, Special Prosecutors, State Police etc..

The City has a Law Department, five District Attorneys, Special Prosecutors, NYC Police and the Department of Investigation with it's sub-group, our own NYCHA IG. With all these groups being funded to protect the innocent and capture the criminal, you should have a fair sense of safety and security. Right?

Well . . . please read on!

The IG/DOI, rumor says, has begun looking into the long known pervasive sexual harassment that has been ignored by the Finkel/Franco clique for the past 5 years or so. (We hope they don't just ask about Gatewood, as other more recent assaults have taken place. Bruce wasn't a lone wolf, so to speak.) And now, with more females coming forward with tales of abuse, the Authority's Special Investigations Unit has gotten involved. With both these groups now asking questions . . . I'm sorry. What's that? You never heard of NYCHA's Special Investigations? Oh, then let me give you a brief outline on this additional layer of police protection that our thoughtful leaders have granted us.

According to people at 250 Broadway, Special Investigations is used by Finkel/Franco as a private police force. Years ago, a handwritten note from Franco was delivered to Computer Services. It called for 6 or 7 computers to be given to the bearer of the note. Although this was a highly unusual method of requesting computer equipment, old Bruce Gatewood was only too eager to please his friends in high places. He directed that the computers be delivered. (Later, Franco confused old Bruce. Rantin' Franco complained that the computers should NEVER have been given without some sort of survey being taken to justify the allocation. Of course, Bruce loudly complained to everyone within earshot that the Chair must have lost his mind. "First he writes a note directing that we deliver the computers to these secret police, then he complains when we comply with his request" was Bruce's take on the Chair's sanity.

So, the Authority now had a small secret police agency, armed with computer technology. These troopers were NOT part of the IG/DOI. They were not in the normal chain of police command, and most had retired from police organizations. This Secret Police Unit is "Officially" assigned to work under Walter Alicea. In reality, Franco and Finkel are the one's usually pulling these puppets strings!

And the Secret Police Unit is costly, with over a half million dollars going just to their annual salary and benefits. That's not counting equipment, overtime, vehicles etc.. To lend a little credence to this report, here are a handful of the names of those involved in the Special Investigations unit, or what we'll now dub the Sneakret Police,as they spend their time sneaking around where they don't belong. Solomon Blackshear, David Coleman, Carol Crawford, Joseph DeFina, Ginger Jaramilco, Duhamed Juarbe, Robert Kennedy, Edward Morales, Rosalind Ortiz, Reinaldo Palermo, John Timko and Joseph Titus are some of the Sneakret Police Unit(Could be a good Rap group name?) That ends all that can be given as "fact". We now enter the "Sources tell us" portion of this story.

For some time now, the phones at 250 Broadway have been (illegally) tapped. If this was due to an authorized criminal investigation, the IG's office would be tasked with that job. However, as this taping was only to catch people talking about our rag, recording and listening to the tapes that are ordered by Finkel/Franco, for their own nefarious purposes, becomes the duty of our own Sneakret Police (aka: SI).

When a report has it that a certain cousin of the Chair has stolen computer equipment, is the IG called. No! This crime becomes a chore for Special Investigations. (Give them some credit. Although they couldn't find the culprit, the items in question magically reappeared. Even though nobody but the Chair knew that SI was on the case, and the thief should have thought he had gotten away with the theft, for some reason he quickly returned the items in question. Another case (covered) over, due to our own Sneakret Police Unit When Finkel/Franco decides someone should be followed to see what they do in their after hours, Special Investigations is again on the case!

Gee, aren't you glad that our leaders are granting us another, albeit uncontrolled, layer of police protection?

What the hell is happening here?

Did the Housing Authority secede from the US
and draft it's own laws?

The Public Housing Spotlight tried to find out more about SI. Other than a phone number (212/306-8595) and a fax number, there wasn't anything official to be found. The Sneakret Police (SI Unit) is not even listed in the Centrex?

We knew the name of the boss of SI, so we did some quick research at the library. (We hope to get more info in the near future.)

The leader of the group, Joseph (Joe) F. DeFina, is a retired police detective who ran twice, unsuccessfully, for local office from the Bay Ridge, Brooklyn area. In 1989 Joe became the Chief of Security for Bayside Fuel Oil. A quick search through some local newspaper archives brought up much information concerning Joe's employers. Bayside Fuel Oil, according to the October 11, 1995 Tim Robbins column in the NY Daily News.

We reprint that column, in full:

A Brooklyn-based fuel oil company has lost its long-time supply contract for city Housing Authority projects because of allegations the firm employed a reputed mobster as a salesman. Housing Authority officials rejected the low bid from Bayside Fuel Oil Corp., ruling the Bensonhurst firm lacked "business integrity" because of links to an alleged captain in John Gotti's crime family. The decision followed an August Daily News report that Bayside was reaping millions from the Housing Authority even though the city's Department of General Services had rejected the company over the reputed link. The News report prompted Mayor Giuliani to order a review of Housing Authority contracts with Bayside, which earned $ 14.9 million from the agency last year. Bayside has acknowledged employing alleged Gambino captain Joseph (Joe Butch) Corrao as a salesman. According to the FBI, Corrao held a no show job at Bayside and used his influence to steer company business to other mobbed-up firms. But Bayside owner Alfred Allegretti yesterday insisted Corrao was just another employee. He also dismissed allegations of mob influence as "political nonsense" and said the firm has appealed the Housing Authority ruling. "My brother Victor and I are the only family and the only bosses in this company," said Allegretti. "We have never been and never will be affiliated with any criminal activity." The decision to drop Bayside will cost. Housing Authority officials said the agency will spend an estimated $467,600 extra to take its fuel business elsewhere. Similar increases were reported by Department of General Services officials when it dropped Bayside in 1993. The DGS decision to boot Bayside was made by then-Mayor David Dinkins after reports of the company's alleged mob ties surfaced during the 1993 mayoral campaign.

End of NY Daily News article.

We're not saying that Mr. DeFina has committed any crimes. We do think that the tactics his office employs, along with his past history of employers, leaves much to be desired. And we hope that the IG will order an "impartial investigation" into SI's abuse of power and their confusion as to their group's identification!

Okay, NYCHA. Don't you think the time has come to let the rest of us in on the big secret? Why do you need this group of bullies to help stifle any reports of sexual harassment, thefts and misconduct? And if you don't trust all the law enforcement groups listed earlier in this article to keep 250 Broadway safe, why should we?

Aren't you actually verifying
the Spotlight's own charge that
DOI's investigations can't be trusted?

Hilly Gross, we await your answer!

A Spotlight Retrospective

As rumors of an invigorated DOI/IG investigation fly throughout 250 Broadway and the Developments in the 5 Boroughs, we've decided to take some time to reflect on what we've reported on thus far. But how? Chronologically? By the amount of taxpayer funds that were wasted and/or stolen? By the number of people who were made sexual victims? What a quandary? Let's do it by perpetrator!

Ruben (Rantin') Franco

In Issue 1, we reported on Ruben Franco's newest fling. He has pounced on a secretary working on the 9th Floor of 250 Broadway. This woman had already reported on being sexually harassed by another Executive, and gotten nowhere with that complaint. That may explain her succumbing to our Letch in Chief. Now, even if it were considered fine for the Chair to choose a paramour from amongst the females toiling beneath him, this time he really went too far. The girlfriend lived, illegally, with her mom in one of our projects. Her name and, more importantly, her income were never reported as residing there. And, as the Chair would pick her up at the project on many a morning, he cannot claim innocence on this. He knew what was going on, and as long as he got what he wanted off the woman, he pretended not to notice.

We also pointed to charges of spousal abuse by Franco that his wife had bandied about. In a similar vein, we told you how Ruben had to run over to bail out his cousin, Norberto Caballery. (More on that, later.)


We view this as a Finkel/Franco alliance with good reason. Anyone who has been at 250 Broadway for more than 6 months will tell you that Franco is really just a titular head of the Authority. When push comes to shove, Finkel does both the pushing and the shoving. Franco usually just jumps onto whatever the Fink is pushing and shoving at the time. Rantin' Franco has to attend all the lunches and community happenings while the Fink is free to sit around dreaming up new schemes to make his friends rich and assure that the Finkel's will be well taken care of after he leaves (Lord, please forgive us!) public service. Since they were successful in evicting Myrtle Whitmore from 250 Broadway, because she smelled a rat in a real estate deal we'll cover in a moment, the Finkel/Franco alliance is again invincible. Or so they brag. So, we have used much of our space in the past 6 issues covering these two parasitic and symbiotic rascals. Here now, a brief recent history. ?

Finkel's close buddy, Ruben Schron, is almost an honorary Board Member. (We're surprised that Earl Andrews beat out Schron for Myrtle's place at the Board, but even the Fink realized that might wake-up some brain-numbed elected official who is supposed to be a guardian of the taxpayer's funds!) Anyway, as we begin our story, Schron is already making tons of easy money from the Authority with his deal regarding his Bush Terminal holdings, and he is rumored to be involved in other NYCHA rental/leasing properties, like 90 Church for one. But that, does not temper his greed in wanting to be alone at the $ Fountain of HUD funds spewing out of NYCHA's pipeline. So, when Finkel/Franco finally finds a building that they believe suits there warehouse needs, Schron and friends are not far behind. A matter of weeks after the Authority first surveys the building in Long Island City, Schron and friends buy the building for $8,300,000. Our facilities people quickly decide that a building they once wanted is no longer available and/or suitable. So, the Board's focus centers on Schron's Long Island City (LIC) Building. Negotiation lead to an offer of a 20 year lease for a total expenditure of $103,000,000. And our sources at 250 Broadway tell us that the current figure is VERY low ball. Maintenance and rehabilitation will be much more expensive that current figures suggest. And Schron and the other "owners" get to keep the two top floors for whatever use they desire! Rental income on top of the sweetheart lease. (Lease signed-Newsday, 9/25/98, by Katia Hetter)

Myrtle Whitmore decides she will look a little further into this deal. When Finkel refuses to vote on the contract, although the Ethics rulings allow him to do so, Myrtle informs Finkel/Franco that she will be voting against the contract. Without Finkel voting, that would leave the vote in a tie. Franco for, Myrtle against.

There is NO WAY Finkel is going to disappoint his friends, so he and Franco pressure Myrtle till she agrees to resign/retire. Within a week of Myrtle's departure, they have Earl Andrews appointed in her spot. The vote is taken on the building contract at a CLOSED meeting. Polly Kreisman had, that day, asked if a board meeting was going to be held. Hilly Gross told her "No!" No notices were sent advising of the agenda, or even advising that there would be a meeting. One director was quoted as saying "It wasn't a 'closed' meeting. The door wasn't locked!" (I guess that's the mind set of those close to Rantin and the Fink. They think the Sunshine Law regards SPF factors.)

So, Earl and Rantin' voted for giving the Fink's pals one of the largest sweetheart deals we've heard of recently. And nobody controls this spending of the taxpayer's money. The by-laws allow ANY Board Member to unilaterally contract with vendors for ANY amount. It's as if HUD fills up a huge piggy bank for the Board Members. And, in many cases, that piggy-bank delivers funds to boondoggle schemes. Legitimate uses of HUD funds are, in most cases, scrutinized and, some of the time, a request will be turned down. HUD will tell us that our request doesn't meet certain criteria. But real estate in New York City is an area where costs can vary hugely between the same size/type building just blocks apart from each other. So, if one were to be greedy, real estate is a perfect place to avoid much scrutiny.

This scam was reported here, and on Channel 9 news by Polly Kreisman. Yet, the Mayor and the City Council, under Peter Vallone, remain silent. Peter Vallone and Walter McCaffrey both throw a few whispers of a desired City Council hearing around, but both really do nothing.

Of course, as we pointed out in our last two issues, Finkel and Franco have now allowed victims of Bruce Gatewood's numerous assaults to be further punished now that the Spotlight had declared Bruce to be worthy of a few mentions. Four women were hit with retribution on Friday, September 11, 1998. Three were demoted and one was fired. Each woman had suffered when Bruce's testosterone overrode any semblance of common sense. Each women had let others know of Bruce's assaults, two reported him to our DEO.

Unfortunately, Sonia Martinez was the Director of DEO, and as she had earned her job by sweating under Rantin', not much was accomplished with their complaints. Although there was a finding of Probable Cause in the investigation, Bruce walked away with a salary history of $100,830, nothing derogatory in his personnel folder and a complete NYCHA sponsored education on dealing with the year 2000 (Y2K) computer problems.

Sex Pervert Update!

A new claimant has joined the mass of Bruce's Victims to contact attorneys. And this claim is not another female employee, instead, it's a male! But, no. It's not what we may have led you to believe. This male had his wife assaulted by Bruce at a NYCHA sanctioned party. Then, after confronting Bruce; having Bruce apologize to the man's wife; and leaving Bruce on his knees and in tears, the assault was then further compounded. The man reported the assault to his Director, and was treated to a speech on loyalty. He was also told that Ms. Oliva had been called and she said that the Authority was not responsible for untoward activities at parties held after normal business hours.

So, this gentleman sought help where he thought he might have a chance. He turned to our old friend, Norberto Caballery. Norberto brought Henry Coira into the conversation. After the man told the story of Bruce's assault and said that he had taken pictures, the next morning, of bruises on his wife's body, Norberto promised that he would get his cousin, Ruben Franco, to discipline Bruce.

But, an hour later, Norberto asked the man to meet outside with Norberto and Coira again. This time, Norberto explained that a new plan was being put into effect. Coira and Caballery would use the info and the photos to blackmail Bruce into doing whatever they desired. They explained that Bruce had a powerful friend who would also be worried about the release of the man's story.

The man refused and spent much time berating Norberto for this disgusting scheme. Now, that man has brought more evidence in the case against Mr. Gatewood. (This Just In! According to Pamper Room sources, the day prior to that fateful Friday Deputy Mayor Ninfa Segarra met with Ruben Franco for HOURS-and Ninfa approved Ruben's decision to demote/fire the four of Gatewood's victims. Boy, to be a fly-on-the-wall at that meeting!)

Norberto Caballery

We have published a portion of the official court documents, showing that Norberto is a Convicted Embezzler. He set out, with the help of a relative who was a member of a Mafia family, to steal $800,000 worth of bearer bonds from the employer who had made the mistake of giving Norberto a job.

We also printed excerpts of a letter in which Norberto promises a supplier that his prior bid would be the winner of a new bidding process, no matter what other's might bid. That's bid rigging in the extreme!

We told of Norberto's arrest for spousal abuse and weapon possession. Rantin' himself came running with the bail money to get Norberto out of jail. There's much more on Norberto, but we think that those paid to investigate illegalities should be given one or two chances to do their own damn job!


(Note: the Inspector General's Office, or IG, is not really a part of NYCHA. It is a branch of the New York City's Department of Investigation, or DOI. At one time, it was left to do its job without political interference. Under the current administration, that has all changed. But don't take my word for it. Research DOI and what has gone on since Mr. Giuliani became Mayor. Search for articles under "Harold Wilson", the past head of the Department. You'll find some interesting pieces in the Times and other newspapers.)

Speaking of those paid to conduct investigations, someone should send a copy of "Investigations 4 Dummies" over to the Inspector General's (IG) office. Either they get their hands tied whenever some City Hall politico frowns on what the IG may find, or the IG's office is staffed by folks who couldn't make it anywhere else in society. (For now, we're leaning towards the former. But, who knows what's really happening?) As pointed out on Channel 9's Investigative Report, there has been a looooong running IG investigation into rampant bribery of inspectors at the Contract Administration Department (CAD) under the then Director, William Russo. What channel 9 couldn't know was that the investigation had been effectively halted months before the report. Those working on the investigation were directed to end surveillance of over a dozen dirty contractors and scores of dishonest inspectors. Some of the key players for the good guys wound up leaving NYCHA in disgust. Employees who agreed to cooperate with the IG were surprised by how quickly their names were leaked to the bad guys.

Why was the investigation halted? Well, one possible scenario involves someone in the Executive group. Seems one of the "clean" Employees working with the IG stumbled on evidence leading not to a dirty inspector, but to an Executive from a department other than CAD. That person passed word to the IG's office of the evidence. Then, everything stopped! The entire investigation over! And, although this happened over a year ago, that employee has yet to be contacted and questioned by IG investigators. The group of employees tell us they never expected anything other than what occurred. They had seen City investigations before, like the big Building Department's scandal. Scores of low-paid Building Department employees were marched before TV cameras, while not a single Executive was even reprimanded.

The fact that these managers were charged with oversight of the Inspectors meant nothing, as they seemed immune from normal scrutiny and punishment.

Remember the inspector seen in the report, who was identified on audio tape as the 5-borough collector for the group? He was the man who told Ms. Kreisman on camera:

"If anybody is corrupt in the
New York City Housing Authority,
it's the big shots that are corrupt!"

Did that statement earn him the justifiable wrath of our leaders? Well, let me tell you how this guy now spends his days at work, and you tell me if he's being severely punished for his activities and his statement about our "corrupt" leaders.

His day begins at 8:00 AM at the Contract Administration Department at 123 William Street. He spends the next 2 hours reading the day's newspaper(s). At around 10:00 AM each workday morning, he grabs his gym bag and goes to a local gym to workout. At 2:00 PM or so, he returns to his desk and takes up his intensive reading, right where he left off. His fellow employees will be written up for a 5-minute infraction of the rules, but this inspector seems to be above the normal Housing Authority rules.


The IG/DOI was also told of various environmental hazards that NYCHA was delivering into our surrounding waters.

Another investigation never heard from again!

They were given information about secret banking being done by a Director.

Another investigation never heard from again!

They were given specifics of a managerial being given a free vacation by a vendor. They claimed that they didn't have the resources to follow-up on that story, as the vacation was "out of town."

Another investigation never heard from again!

They were told of a vendor's hiring of a Supervisor's son. The Supervisor was directly responsible for insuring the vendor's compliance with our contracts, and the Supervisor OK'd the payments to the Vendor for whom his son worked.

Another investigation never heard from again!

They were told of an Inspector who worked for a vendor on weekends.

Another investigation never heard from again!

And, as pointed out by Channel 9, they were told of over $50,000,000 in contracts that were mysteriously "disappeared" from a computer system.

Another investigation never heard from again!

Yet another unbelievable IG/DOI item. There was an IG/DOI investigation of reports they received concerning a NYCHA employee. It was reported that the employee was operating a baseball card business from his workplace in the Finance Department. The IG's investigation confirmed that he was dealing for dollars on the Authority's dime. But, according to the employee, he was told that:

"If you weren't a friend of Mr. Finkel,
you would be dismissed."

So, if you're a caretaker who is worried that someday you may be dismissed if you aren't at your assigned place for five minutes, do yourself a favor. Call the Fink's office and make an appointment. With luck, you'll make a powerful friend. Then, you, and Tom Hahn can get together and compare your daily receipts. (Don't forget to add in your pay for the day!)

To sum all this up, it would appear that NYCHA is being led by a group of people who, while razing the Authority and illegally fattening their friend's wallets, are sometimes, for a few moments at least, investigated by a reincarnation of the Keystone Kops! Or, is it a case of a group of politically powerful individuals who are systematically raping the Federal, State and City treasuries under the guise of contracting with the Authority, while the IG/DOI's office is being hobbled by people or a person at City Hall.

Mr. Mayor,one of the reasons you now reside at Gracie Mansion is that you once helped prosecute a group of corrupt NYCHA people. How about taking a few minutes to see what's happening under your watch. Please!

Mr. Cardenas? We at the Spotlight can certainly understand any rational human being's desire to armor oneself against the dastardly duo of Franco & Finkel. We would even recommend going to certain lengths to construct such armor. But your recent memos are going a bit far. We don't have the room, nor the inclination, to insert full copies of both of our favorites, so we'll hope our readers trust us enough to assume that we are not just pulling things out of context to make a point. In this case, choosing text to copy that gives the true sense of paranoia expressed in your writing is tough. Each sentence is worthy of it's own Spotlight. Here's a sampler. (Spelling as in original document!)

Below is a full copy of one of the memos:


Directive on Documents
Requiring CIO Signature

This directive is issued to insure that all documents signed by the Chief Information Officer (the CIO) are properly approved and processed according to current City, State, Federal and NYCHA regulations and procedures, do not violate any of the laws in the state of New York, and under no circumstances compromise the legal or financial standing of NYCHA or of the CIO. It applies to all legally or financially binding documents submitted to the CIO for signature, effective 08-June-1998.

All documents submitted for CIO signature must meet the following six standards

  • 1. Documents must be accompanied by supporting documentation. This is a mandatory requirement for financial documents, invoices, Board items, and any document which may have a liability attached to it
  • 2. Documents must be accompanied by a memorandum, signed and dated by the REQUESTOR recommending approval of the motion.
  • 3. The REQUESTOR is responsible for collecting and reviewing all relevant documents, bills, signatures, and initializing, indicating that all documentation is in order, necessary forms must have been filled out correctly, necessary signatures must have been obtained prior to submission to the CIO for final approval/determination.
  • 4. Documents such as contracts, documents of engagement, or letters that require CIO signature under name and/or title, and which are legally or financially binding documents, must have been reviewed and approved in writing by the Law Department.
  • 5. Documents submitted for CIO signature under the initials and/or signature of the REQUESTOR signify that:
    a) The REQUESTOR does not have a reasonable doubt about the completeness, accuracy, correctness or legitimacy of the documents. Else, the document should not be submitted to the CIO.
    b) All requests for funds are properly approved and justified, if applicable
    c) Any additional procedural requirement, if any, has been met
  • 6. Documents must be submitted to the Executive Assistant of CIO, or to Secretary, allowing for at least 3 days for review

Should, however, any problem arise after the CIO has approved and signed the request in good faith, then the CIO is released and forever discharged from all know claims and liabilities of any nature, including but not limited to, all actions, causes of action, suits, debts, sums of money, attorney's fees, controversies, damages, claims, grievances and demands, at law or in equity, by contract, tort, pursuant to statute, that anybody could have against the CIO, by reason of or arising out of processing of documents submitted by the REQUESTOR and approved by the CIO in good faith.


There is a sister document to this one. Mr. Cardenas titled it CIO OFFICE DIRECTIVES. It consists of 8 bulleted items. They each deal with various scenarios where one might believe they should contact Mr. Cardenas. Guess what? Each item points to other personnel to be contacted. For example, the 5th of these items addresses procedures for "Emergency situations or systems malfunction" and advises that they "be reported to and resolved with the corresponding line organization management. If a situation warrants escalation, the Executive Assistant to CIO should be contacted."

Okay, we now leave the Twilight Zone episode of Contract Law 101Run Amuck! All we know is that it seems as if Mr. Cardenas has bent over backwards to grant himself blanket immunity from any conceivable responsibility for absolutely anything! Even in an "Emergency" he wants to be left alone!

Does he worry about how much support he could expect from our courageous NYCHA Board if he, Heaven forbid, actually made a decision about anything concerning his department?

One question:
If this guy really is responsible
for absolutely nothing,

why does NYCHA pay him at all?

© 1998 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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