In City Contracts, No Room for Whistleblowers

| April 4, 2012 4:00 AM

New York City Councilmember and comptroller candidate Daniel Garodnick says private employees working on city contracts are not protected under whistleblower legislation. Photo courtesy of New York City Council.

Since 1996, the city’s annual spending on contracts with private companies has ballooned from $5.7 billion to $10.5 billion per year. The city’s budget this year lists 17,000 of these contracts (1/7  of the budget).  Several major scandals, most notably the multi-million dollar CityTime disgrace, begs the question whether there is enough oversight to prevent disastrous amounts of fraud and waste.

And now, New York City Councilmember Daniel Garodnick (D), who announced his candidacy for City Comptroller on April 3 (the very birthday of the notoriously corrupt NYC politician Boss Tweed), says there’s another serious issue: employees at private companies working on city contracts are virtually unprotected if they blow the whistle on corruption.

“We were doing some research about city contract efficiency when we saw there was a big loophole,” said Garodnick, who worked as a litigator before entering office in 2005.

Although the laws are notoriously muddled, there is complex “patchwork” of local, state and federal laws designed to protect public and private employees from being fired, sued or in other ways retaliated against if they report waste or fraud. However, it seems when private employees cross into the public sphere, those protections dissolve.

At the end of March, Garodnick introduced a new bill to protect non-city employees who work on contracts worth more than $50,000.

Because of the change in the way the city does business,  protecting private employees working on public contracts is crucial.

Last November, City Limits reported, “under the current [mayoral] administration, there has been a steady shift in the way private companies are being used by the city. It’s no longer just about putting the delivery of individual government services — say, fixing roads or providing school food — in the hands of private companies. These days, tech firms are being hired to perform huge and hugely complex IT projects that not only cost an enormous sum but raise issues around how dependent the city might become on these high-tech wizards.”

More news supporting Garodnick’s bill came out April 2, when the New York Daily News reported that over the past two years, 90 percent of the 27,538 allegations of wrongdoing against city employees, which the Department of Investigations looked into, were brought forward by anonymous whistleblowers.

To Garodnick, the Daily News article “says that people are afraid of losing their jobs, and that they’re taking advantage of whistleblower laws where they exist.”

  • Thomas Lowenhaupt

    Another area where the Council Member should look is the transparency of the city contracting process. Here’s an active horror story.

    On March 20th at 3 PM I was told by a city council member that there was a notice in the City Record about a public hearing about a city contract my organization has been interested in and following for 7 years. The hearing was to be held at 2 PM Friday, March 23 – 3 days later.

    In disbelief I called and emailed the agency’s public affairs officer, who had promised to keep me informed, and asked “Is it true?” The next night at 10 PM he emailed “Yes, it is. Sorry I was busy.”

    (The contract (PIN: 85812P0001) will set the foundation for our city’s position in the digital world for years, perhaps decades to come. It deals with the city’s .nyc Top Level Domain (like .com and .org but just for our city) and domain names such as,,,,,, and a multitude of others. Amongst the interests ignored in the sham “public hearing” were those of our city’s mom and pop businesses. They’ll turn around in a year to learn that the intuitive domain name for their business, e.g.,, is owned by a Swiss consortium and is available for 1,000 times the $25 they paid for it.)

    The next morning, at 10 AM on March 22, a day before the hearing, I went to the city office described in the City Record to review the contract. I was told by the contract manager that it was not yet ready. I asked “How can you have a public hearing tomorrow about a contract that one can’t see?” Shrugs. After some wrangling I managed to get several pages of what is probably a few hundred page document from the manager. Just these showed a devastating impact on our city. And the meat of the contract remains hidden. Even the tidbits I was shown have been hidden again.

    When I went to the hearing on Friday afternoon I learned that my comment time was limited to 3 minutes. The agency knew fully well that Inc., the NYS not-for-profit I represented, had been formed specifically to advocate for the development of the .nyc TLD as a public interest resource, that we are the global experts on city TLDs (I can say that will complete modesty because we are the only entity focused on city-TLDs). “Sorry fella, 3 minutes is all you get.”

    We’ve filed a complaint with the city’s Department of Investigations and the Comptroller’s office, and we hope this travesty reaches the mayors eyes before the contract is signed – it will be days at the most.

    We were astonished that the city can ram something so important through without a meaningful review. I bet the city’s Small Business Department is not even aware of the costs this will impose on the city’s mom and pop businesses. Or that NYC&Company knows about the disadvantage our city will have vis a vis other more digitally aligned cities. And we’ll only learn over time, as people return from digitally-friendly cities like Berlin, how our quality of life has been impacted.

    I hope Council Member / Comptroller Garodnick takes a look at the entire contracting process. And I’ll note that it’s not too late to scream about this sham review process now.

    Tom Lowenhaupt
    Thomas Lowenhaupt, Founder & Chair Inc.

    Jackson Hts., NYC 11372
    718 639 4222

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