NEW YORK—IBM Corp. started work Monday on a $2 million contract to upgrade customer database technology for New York City Housing Authority (NYCHA). The company is also working on the first phase, worth $7.7 million, of a project to consolidate the IT systems for 40 city agencies into one building—a mega-system called CitiServ, as announced in January.
The company has a long and successful history with New York City’s agencies, but a blurp in that partnership occurred in April.
Special Commissioner of Investigation for the New York City School District Richard J. Condon found IBM complicit in a scheme to siphon millions from a Department of Education (DOE) contract.
William Lanham was a consultant who worked for DOE on its Project Connect, which installed Internet connections in classrooms around the city. According to Condon, Lanham made $3.6 million on the sly through a complex network of consultant firms that hid the fact that he owned the firms.
IBM hired two of his consultants, aware of the conflict of interest, found Condon. The commissioner’s investigation found that many IBM managers had ethical qualms about the situation. Lanham claimed that the IBM project manager was integral in planning part of the scheme.
In the end, IBM employees accepted Lanham’s assurance that the DOE was aware of the situation and did not notify the DOE.
IBM’s oversight seems more like negligence than greed. From 2003 to 2009, IBM only profited $400,000 from Lanham’s scheme, a drop in the mega-coroporation’s bank account and in the wealth of contracts the company has with the city.
For example, DOE awarded IBM an $80 million, five-year contract in 2007 to create and service the Achievement Reporting and Innovation System (ARIS), a system that creates progress reports for the city’s schools. Nick Sbordone, spokesman for the city’s Department of Information Technology and Telecommunications (DoITT) says IBM also holds a number of contracts with his agency.
DoITT has taken steps to prevent further incidents of consultant fraud. DoITT recently created the Vendor Management Office, which is solely responsible for overseeing consultants.
When the DOE Project Connect scandal broke in April, Schools Chancellor Dennis Walcott declared that reform was necessary in how his agency deals with consultants. The Department of Education did not, however, respond to inquiry about the Project Connect case and any resulting reforms as of press deadline.
DOE wasn’t the only victim of consultant fraud in recent years.
In June, Mayor Michael Bloomberg accepted blame after the city discovered that consultants working on the CityTime employee payroll management system embezzled $80 million.
The company has a long and successful history with New York City’s agencies, but a blurp in that partnership occurred in April.
Special Commissioner of Investigation for the New York City School District Richard J. Condon found IBM complicit in a scheme to siphon millions from a Department of Education (DOE) contract.
William Lanham was a consultant who worked for DOE on its Project Connect, which installed Internet connections in classrooms around the city. According to Condon, Lanham made $3.6 million on the sly through a complex network of consultant firms that hid the fact that he owned the firms.
IBM hired two of his consultants, aware of the conflict of interest, found Condon. The commissioner’s investigation found that many IBM managers had ethical qualms about the situation. Lanham claimed that the IBM project manager was integral in planning part of the scheme.
In the end, IBM employees accepted Lanham’s assurance that the DOE was aware of the situation and did not notify the DOE.
IBM’s oversight seems more like negligence than greed. From 2003 to 2009, IBM only profited $400,000 from Lanham’s scheme, a drop in the mega-coroporation’s bank account and in the wealth of contracts the company has with the city.
For example, DOE awarded IBM an $80 million, five-year contract in 2007 to create and service the Achievement Reporting and Innovation System (ARIS), a system that creates progress reports for the city’s schools. Nick Sbordone, spokesman for the city’s Department of Information Technology and Telecommunications (DoITT) says IBM also holds a number of contracts with his agency.
DoITT has taken steps to prevent further incidents of consultant fraud. DoITT recently created the Vendor Management Office, which is solely responsible for overseeing consultants.
When the DOE Project Connect scandal broke in April, Schools Chancellor Dennis Walcott declared that reform was necessary in how his agency deals with consultants. The Department of Education did not, however, respond to inquiry about the Project Connect case and any resulting reforms as of press deadline.
DOE wasn’t the only victim of consultant fraud in recent years.
In June, Mayor Michael Bloomberg accepted blame after the city discovered that consultants working on the CityTime employee payroll management system embezzled $80 million.
