US Charges 70 NY Housing Authority Employees with Bribery

U.S. authorities arrested 66 of the 70 current and former employees of the New York City Housing Authority (NYCHA) who have been charged with bribery and extortion this week. This marks one of the largest public corruption busts in the history of the country's Department of Justice (DOJ).

NewYork Housing AuthorityThe New York City Housing Authority (NYCHA) has 335 developments across New York and receives funding from the U.S. Department of Housing and Urban Development every year. (Photo: Jason Eppink, Flickr, License)The suspects demonstrated a high level of skill in securing lucrative under-the-table deals by bribing contractors, as stated in a press release by the DOJ. The defendants allegedly extorted contractors in exchange for contracts exceeding US$13 million, relating to over 60 development projects across New York.

These individuals, believed to have been demanding approximately 10% to 20% of the contract value (ranging from $500 to $2,000, depending on the contract size), obtained more than $2 million in corrupt payments, according to the statement.

In certain instances, the defendants insisted on payment even after the contractor completed the work. If contractors required a signature from NYCHA employees to receive final payment, they had to pay upfront.

When construction projects necessitated external contractors, NYCHA conducted a competitive bidding process. However, for contracts valued at less than US$10,000, NYCHA employees could directly hire a contractor, and this is where bribery and extortion occurred.

“As charged, these 70 current and former NYCHA supervisors and other staff used their positions of public trust and responsibility to pocket bribes in exchange for doling out no-bid contracts. The extensive bribery and extortion alleged here calls for significant reforms to NYCHA’s no-bid contracting process, which DOI has recommended and NYCHA has accepted,” stated the Department of Interior Commissioner, Jocelyn E. Strauber.

NYCHA, the nation's largest public housing authority, provides housing for one in 17 New Yorkers and receives more than $1.5 billion in federal funds annually.

“Make no mistake, this alleged pervasive corruption had the biggest impact on NYCHA residents themselves, who may have been cheated out of better services and programs,” emphasized the Homeland Security Investigations Special Agent in Charge, Ivan J. Arvelo.