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April 29, 2011

Report on thieving DOE consultant damning for IBM and Verizon

by Chris Arp, at 12:30 pm

Today’s news about a contractor accused of stealing $3.6 million from the Department of Education comes from a report by the Special Commissioner of Investigations. We’ve pasted the full report below.

The report paints a picture of contractor Ross Lanham’s straightforward scheme: he billed the DOE at a high price, and paid his subcontractors at a lower price. The difference, allegedly, went into a lavish lifestyle that includes three houses on Long Island.

More surprising, though, is the extent to which IBM and Verizon turned a blind eye to Lanham’s accounting. For instance, when an IBM staffer noted irregularities in Lanham’s billing, Lanham protested that the DOE was “okay with it.” IBM, perturbed, shuffled Lanham and his consultants into a different subcontracting company with a different name, but said nothing to the DOE.

Next, Verizon accepted Lanham’s subcontractors after he threatened to take the DOE contract to IBM. Puzzlingly, Verizon found out that Lanham was not giving his subcontractors the full amount that Verizon was paying out, but only went into action after the DOE contacted them with their concerns.

Overall, the report presents a world of unsupervised greed. The language at the end is particularly direct.

IBM and Verizon, by their silence, facilitated this fraud. IBM did not contact anyone at the DOE about the Lanham consultants. Instead, they moved the consultants from one subcontractor to another to cover themselves. Verizon concealed from the DOE and law enforcement that they got millions of dollars in contracts through Lanham only after agreeing to hire CCS as a subcontractor. All of the subcontractors named in this report, except Bayview, facilitated the concealment of the fact that Lanham was profiting from the DOE while he was being paid to represent the DOE.

04-11 Lanham Rpt

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  • lifetime_educator

    By my calculation (using the average salary of a 10 year teacher on $78,885 plus fringe at 39% for a total cost of about $110,000) we could ask for that $3.6 Million back and save about 33 teacher positions. 33 lives could remain in tact, at least 99 classes could keep their teachers, and several thousands of students wouldn’t have to bear the brunt of our ridiculous mayor’s disgraceful threats. If he doesn’t ask for this money back, there is irrefutable proof of the type of person he is.

  • Ldbednar

    It’s time the mayor and the DOE stop ignoring parents who protest the amount of money going to contractors and not to the classroom.

  • guest

    Love the headline – not damning to Joel Klein and DOE and Bloomberg I guess.

  • Guest

    Check out Microsoft and see how they made out on DOE tech contracts since Bloomberg took over.

  • I noticed that…

    Let’s take the $700 million dollar CityTime boondoggle. Using your average total cost of a teacher’s salary, the city could save 6,363 position. Wait, isn’t the mayor going to layoff approximately 6,300 positions? Coincidence, how the numbers jive.

  • lifetime_educator

    Hell yes “I noticed that….”, totally. So, where is the accountability from City Hall? How does a city make a 3rd term mayor pay for the egregious lies and nepotistic misconduct?

  • old unionist

    This is a 28 page report on the investigation that illustrates the total lack of oversight and accountability on the part of the Joel Klein/mayor Bloomberg department of education. At a time when teaching positions and services are being cut, this report should be enough to halt any proposals by the mayor or DOE with regards to layoffs or school closings. An outside independent investigation should be mandated to scrutinize the entire budget of the DOE during the Bloomberg administration.

  • Anonymous

    Community school boards were divested of power on the basis of scandals smaller than this; is it time that we can call for shutting down Tweed or removing those in power?

  • John G

    But I thought Uncle Joel was a super manager! All this happened under his watch? Hmm …

  • http://www.facebook.com/profile.php?id=711858292 Paul Rubin

    Over 100,000 employees. Over 1,000,000 students. Over 1,000 buildings. An annual budget in excess of $20,000,000,000. One would think that the New York City Dept of Ed could have its own fully functional IT department that could handle all necessary tasks for set annual salaries from soup to nuts rather than farm this stuff out to private companies who need to make a profit. I know the buzzword is privatization but in the real world all we seem to get from that are absurdly expensive scandals rather than little ones. And little to no oversight.

  • Guest

    The contractor finagled the money through Custom Computer on Long Island; they do all the tech work in city schools. Are they being investigated?

  • Anonymous

    YES! Justice would be seeing Joel Klein and Bloomberg walked out of Tweed in handcuffs!

  • Another parent

    Why is it damning for Verizon and IBM. Where’s the responsibility on the part of leadership at the DOE? Is this why Klein left the DOE so suddenly?

  • Ms. Smith

    I’sn’t this what privatization is all about? Subcontract yourself out of accountablitiy. They’ve taken cues from Blackwater I see.

  • Michael Fiorillo

    Guest,

    But wait, isn’t the Microsoft Foundation busy giving millions of dollars for efforts to advance mayoral control of school districts, teacher merit pay, increased class size, automation/digitilization/outsourcing of teaching, and funding front groups like ME$ME to undermine due process and job protections for teachers?

    I’ve always been told the Microsoft Foundation was a “philanthropy?” You can’t be implying that the Microsoft Foundation is really little more than an alternative vehicle for the infinite greed (http://www.nytimes.com/books/99/01/03/specials/moody-body/html) of its founder, can you?

  • http://www.yurtdisiegitim1.com Yurtdışı Eğitim

    it has been not a surprise for me…

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