Nassau’s contracting process breeds corruption – By George J. Marlin

The following appears in the July 24-30, 2015 issue of the Long Island Business News:

Nassau County’s finances are a disaster. Budget deficits are projected to hit $210 million in 2015, $259 million in 2016, $295 million in 2017 and, in 2018, $325 million.

The revelation this month that total sales tax revenues at the end of June were below budget expectations only exasperates the crisis.

Nassau’s mess is the direct result of years of mismanagement, cowardice and cronyism — particularly when it comes to vendor contracts. Hence, I was not surprised that Nassau’s contracting process was described in a report released by County District Attorney Madeline Singas as a “recipe for corruption” because it is not insulated “from improper influence, manipulation, collusion and fraud.”

The report points out that Nassau has a porous contracting process “due to years of neglect, ineffective surface level reforms and a regrettable failure to learn from past failings.”

County Executive Edward Mangano has not only failed to reform the contract process, he scaled back two key oversight positions created by his predecessor, Tom Suozzi. The post for deputy county executive for compliance was eliminated and the office of the commissioner of investigations for budget was slashed.

These so-called cost-saving measures, the D.A. observed, open the doors to corruption because the “antiquated, slow, and inefficient contract approval process … is heavy on bureaucratic file passing, and light on substantive scrutiny and fact checking.”

Unlike New York City’s process, critical information needed to determine if a vendor is credible or viable is not required when applying to Nassau County for a contract. Vendors do not have to reveal if they have criminal convictions, pending criminal actions, debarment history, tax liens, pending litigation, judgments, bankruptcies, or if they are related to public officers or have made political contributions.

The D.A. focused on unsolicited proposals like the Ab-Tech deal that is at the root of the indictments of Dean and Adam Skelos. Such a scandal, the D.A. concluded, “illustrates a systemic failure of Nassau County’s procurement and contract management process to ward off corruption.”

I do hope that the D.A. is investigating the Veolia bus public-private partnership deal.

When the bus deal came before the Nassau Interim Finance Authority Board in December 2011, as a director I voted reluctantly to approve it because NIFA received the contracts at the last minute and did not wish public bus transportation to come to a halt on January 1, 2012.

However, when I cast my “yes” vote I warned that the County presented too rosy a picture of the contract’s merits and that it would prove to be a disaster for taxpayers and bus riders. Sadly, my prediction came to pass.

The $106 million estimated cost for the private company to run the system in 2012 was off by $14 million. Hence, bus routes had to be eliminated and services cut to save $7 million. The other $7 million came from an unexpected one-shot of federal and state aid that the county turned over to Veolia.

Since then, Nassau has had to allocate more money to Veolia and the county comptroller has reported a significant decline in fixed route service levels and certain critical performance measures that were not maintained.

On this contract and others, the D.A. should follow the political contribution trail and the roles lobbyists/consultants played in the process.

Concluding that Nassau’s “procurement and contracting process remains prone to manipulation, corruption and fraud,” the D.A. made a number of excellent recommendations that mirror the New York City procurement process. If implemented, it would result in a comprehensive overhaul of Nassau’s contracting process.

Taxpayers, however, shouldn’t hold their breath waiting for Nassau’s pols to implement reforms. The special interests have too much to lose and will use their clout and checkbooks to keep the status quo.

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