Mayor Michael Bloomberg tries to explain CityTime mess saying $80M debacle 'slipped thru cracks'

BY Kate Lucadamo and Greg B. Smith
DAILY NEWS STAFF WRITERS

Hermann for News

Mayor Bloomberg blamed the unforeseen complexity of computerizing the city's multi-layered payrolls for CityTime debacle.

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Mayor Bloomberg Friday offered a simple explanation for how the bloated CityTime project became a nest of fraud.

Stuff happens.

"You can't look every place," the mayor said on his weekly WOR radio appearance. "I'm not trying to excuse it. It is something we certainly should focus on. On the other hand, if you want to know how big projects have big things that slip through the cracks, this is as good an example as you need."

In response, critics wondered how such a debacle could occur under the nose of a mayor who prides himself on his managerial skills.

"We need you to do what you said you could do, which is manage finances," said Councilman Jumaane Williams (D-Brooklyn).

The mayor's explanation came after four highly paid CityTime consultants and two others were arrested on charges of siphoning $80 million out of a project where costs have ballooned radically.

CityTime, an attempt to convert thousands of public employees to electronic timesheets, is years behind schedule and hundreds of millions of dollars overbudget.

As part of its expanding probe, the city Department of Investigation spoke on Thursday with Joel Bondy, the director of the Office of Payroll Administration, which oversaw the project, sources say.

Later that day, Bondy was suspended without pay.

Investigators say the alleged ringleader of the conspiracy, Mark Mazer, had unusual access to Bondy during the project. A lawyer for Mazer insisted yesterday that his client made no payments to Bondy.

"Joel Bondy did not receive a dollar from my client," said attorney Gerald Shargel. "Plainly stated, there was no corruption. The relationship between Mr. Mazer and Mr. Bondy was well within ethical and legal boundaries."

The DOI investigation alleges Mazer and three other computer consultants stole millions of taxpayer dollars by inflating consultant hours and fees and funneling the profits through a network of shell corporations.

Some shells were set up by Mazer's wife and mother, both of whom were arrested.

Manhattan U.S. Attorney Preet Bharara alleged that Mazer and his subordinate, Scott Berger, signed off on dozens of bogus timesheets to inflate their take.

Yesterday the city also stopped payment to a pre-K school owned by Mazer's wife, Svetlana. This year, the city has paid the ABC Preschool in Woodside, Queens, $237,000.

On the radio show, Bloomberg claimed the city would recover the money stolen by insiders but admitted the scandal undermines public trust in government.

DOI Commissioner Rose Gill Hearn "thinks we'll recover virtually all the money, but it certainly doesn't recover our reputation," Bloomberg said. "It reflects poorly on everybody."

As for how CityTime's original $63 million cost skyrocketed to $700 million, he blamed the unforeseen complexity of computerizing the city's multi-layered payrolls.

gsmith@nydailynews.com