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Public Housing Spotlight

Issue 92
Published on December 10, 2001

For a printable (PDF) version of any Spotlight articles, please specify the issue and email us at nychaspotlight@netscape.net

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

(Click Here for Directory of Issues)

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Spotlight Exclusive

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NYC Dept Of Investigation
helps screw both
NYCHA tenants
and the taxpayer.

If you've read our Special NYCHA Corruption Issue (Click Here), you know that a dozen or so of NYCHA's Contract Administration employees, including Contract Inspectors and an Area Supervisor, had risked much to investigate a long-term, widespread, organized corruption ring within NYCHA.

As none of the honest people trusted NYCHA's Inspector General's office (a subset of the NYC Dept. of Investigation), we didn't let the IG's investigators know of our investigation until we had substantial and hard to ignore proof of the bribery ring.

When one of the group of crooked inspectors voluntarily confessed to us, the IG's office was finally notified. We (the group that was reporting on the crooked group) felt that we now had enough evidence, including the testimony of a ring-member, that even NYCHA's IG would have to forgo their normal duties of trying to find a NYCHA employee taking five-minutes too long on a coffee-break and would finally have to begin stemming the lucrative, widespread corruption.

The irony here is that Richard (Tony) DiAlto, the crooked inspector who confessed, was the most reluctant to bring the IG's office into the mix. Tony wanted us to go to the Feds, as he didn't trust the IG's office. Turned out, we should have taken Tony's advice on whom to trust!
To hear Tony describe just some of the bribes he took, Click Here!

Anyway, we finally clued in the IG, they took over, Tony was hidden by the IG for a while, then he and his wife disappeared from their apartment. For a while, Tony still had NYCHA checks cut in his name. (I haven't followed up on that, as it's the IG hiding the crooks now, not Tony.) The crooks remained at NYCHA, and some were promoted!

So, we began Spotty!

Spotty's pressure on DOI/IG slowly built. Eventually, enough politicians were talking about the NYCHA problem that DOI was finally forced to act.

DOI left all the NYCHA higher-ups alone, and conspired with a single contractor to set up 3 arrests.

Set-up seems to be the operative word here.

You see, although Tony confessed that bribes ran as high as $30,000 for a single Inspector on a single contract, the IG had these new bribes scaled to where the charges would NOT be too stiff. The new bribes were kept at less than $10,000, with $9,400 being the top they gave to any inspector.


But in order for this cover-up of the larger graft in NYCHA to work, a willing contractor was needed.

(Our sources had told us that the IG used Alasia Contracting, once known as GBE. But we weren't sure, as DOI never revealed who they used. Until recently, when NYCHA's Law Dept. virtually let that cat out of the bag.)

So, DOI/IG got a contractor to participate. They then set-up this small time sting and got the result they wanted. They leaked the arrest of NYCHA crooks to the Staten Island Advance. Not the NY Post this time. They wanted to keep any poor NYCHA publicity to a minimum.

When some naïve Council Member would inquire into our charges of corruption, DOI would point to the 3 BS arrests they had staged and say they had gotten the bad guys.

Again, convenient!

The major crooked ring within NYCHA remains free to pluck $ from the taxpayer tree, the NYCHA execs sharing in the bounty are protected, DOI gets some arrest publicity and NYCHA can pretend to recapture it's reputation.

Of course, 3 problems remain.

  • 1) The crooks are even more emboldened.
  • 2) If any of the 3 crooks that were arrested knows of, or was part of, the larger group of crooks, that crook now has great leverage over DOI.
  • 3) The contractor used by the IG, IF the sting was a phony one, now also has great leverage in future NYCHA dealings.

Well, as you know from our last issue (Click Here), #2 jumped up and bit NYCHA in the ass! One of the arrested crooks has already turned up as a Transit Authority inspector, even as the DOI website reports the crook as being on 3 year supervised release from prison.

And now, #3 comes to fruition. The contractor who was part of the scheme has now shown some of the cards it holds.

Here's what we're told.

Recently a Default meeting was held against Alasia Corp (a.k.a GBE). The contract is a rather simple one. Bathroom Renovations to be done at Gun Hill Houses.

Yet, 17 months after work began, only 5% of the work has been done. And according to the reports, even that 5% is an exaggeration, as much of the work has not passed any inspection.

Our sources tell us that everyone in the normal chain wanted this contractor defaulted, including the Borough Management, the Manager and Superintendent of Gun Hill houses, Contract Administration's Environmental Unit and the 504 (Handicapped Access) Unit, the Area Supervisor and Contract Inspector.

The Default package alone was 161 Pages filled with the problems on this contract

All that was left was to have a default meeting and present the facts to NYCHA's Legal Department and have them sign off on it.

But, NYCHA's Legal Department was a no-show for that meeting. Instead, those at the meeting report receiving a phone call from the Legal Dept..

The Legal Dept. said that there would be no default of this contractor, as the NYCHA IG owed this contractor a big favor.

That's right! Screw the tenants and the taxpayer! Screw all the "non-connected" contractors who get fined thousands of dollars for being just days late on a contract.

Alasia can make tenants wait for over 17 months, and still be just beginning the contract work!


Well, let's imagine . . . when you need to sweep wide-scale, sanctioned corruption under a rug, you need help. You might want corrupt contractors and corrupt employees to help put up a front, so that nobody looks behind the curtain that hides the NYCHA execs running the corruption.

But then you'd owe them something. For instance, if you knew someone had taken large bribes, you might get that someone to take a fall on a much smaller bribe figure. Of course, the person taking the fall might insist on having a future after he gets convicted in court. So, if you had the right connections, you might promise the crook that he's have another City job waiting for him.
He might wind up as a Contract inspector for another Agency . . . say the Transit Authority!

But, you'd need a contractor to offer the small bribe, so everything looks right.

And, if a short time later that same contractor got in trouble with NYCHA, you might need to bail him out by telling NYCHA's Law Dept. that defaulting that contractor is NOT an option.

If anyone is interested, here's the details:

Development: Gun Hill Houses
Contractor: Alasia (was GBE)
Contract number: PL9900039
(Bathroom renovation contract.)

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We need the new NYCHA fax numbers!
Please either email them or
send an anonymous fax to us at 718/745-0170

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© 2001 Public Housing Spotlight and John Ballinger. All rights reserved.
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Issue links are at page bottom
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Links to all Issues are at page bottom

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.

For a great source of general tenant information,
visit the Tenant Net Home Page |

And for a great source of New York City news and
policy information, visit our friends at the Gotham Gazette

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