Dozens of NYCHA Staff Have Pleaded Guilty to Bribery in ‘Micro’ Contracts Scheme

More than two dozen current New York City Housing Authority employees have pleaded guilty to a variety of bribery charges as part of a long-standing scheme related to so-called micro-purchase contracts, say federal prosecutors with the Southern District of New York.

In February, 70 development-level NYCHA superintendents and assistant superintendents — 55 current and 15 former — were arrested in the biggest one-day takedown in U.S. Department of Justice history.

As of Tuesday, 27 of the current workers had pleaded guilty, although the impact of the first wave of admissions of guilt on NYCHA’s operations remains unclear. NYCHA officials said the plea agreements required the employees to resign.

Forty-two other cases are pending.

“NYCHA cannot comment on plea agreements between the arrested employees and SDNY as NYCHA is not a party to those agreements,” said NYCHA spokesperson Barbara Brancaccio. “However, NYCHA has backfilled all positions to ensure a smooth transition with no impact on services provided to residents.”

NYCHA deployed micro-contracts in an attempt to attack a longstanding backlog of repair requests by tenants. The pressure to address those requests remains intact.

The number of open tenant-initiated repair requests at the end of April was 607,000, down slightly from 659,000 at the end of April 2023. The average time to complete a repair has risen slightly from 358 in April 2023 to 371 last month.

Prosecutors alleged that the indicted NYCHA staffers had for years pocketed a total of $2 million in bribes in exchange for awarding $13 million in smaller contracts to a favored group of contractors performing repairs on NYCHA buildings, according to indictments announced by Manhattan U.S. Attorney Damian Williams.

The employees had the power to hand out smaller micro-purchase contracts of $5,000 (and then $10,000 after 2019) that fell below the amounts that trigger competitive bidding, a protocol that requires authorities to seek bids from multiple vendors and pick the lowest responsible offer.

For years and across nearly 100 of the authority’s 320 developments citywide, contractors paid bribes — often based on a percentage of the contract’s worth — to win these small contracts to repair the authority’s aging buildings. With almost no oversight, NYCHA bureaucrats were able to award these corrupt vendors for jobs such as plastering, plumbing and painting multiple $5,000 contracts over short time periods, effectively paying them amounts that would normally trigger competitive bidding requirements.

The subject of NYCHA’s reliance on micro-contracts surfaced last week in public remarks by Jocelyn Strauber, commissioner of the Department of Investigation (DOI), which conducted the investigation that led to the indictments.

Strauber has recommended that NYCHA take responsibility for awarding the smaller contracts away from development-level managers and place it with a central office unit where oversight would be easier to perform.

She noted that NYCHA — after rejecting a similar suggestion two years ago — is now on board to institute this reform. And she noted that DOI is considering looking into the use of these no-bid smaller contract awards at other city agencies.

“It is something we would like to do,” she said, noting the agency’s limited resources. Mayor Eric Adams’ most recent budget includes a 20% cut for DOI over the last fiscal year’s budget.

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