Waste of the Day: Secret Security Company Made NYC Money Vanish

Topline: New York City’s security services for former prison inmates have turned into a years-long game of “whodunnit?” with a twist ending revealed this June.

New York City gets scammed

Mayor Eric Adams’ office found that a nonprofit secretly sent $12 million in federal Covid relief funds to an unlicensed security company in what certainly violates procurement rules and may be a more elaborate kickback scheme, according to the nonprofit newsroom The City.

Key facts: When the Covid-19 pandemic began, New York hired the nonprofit Exodus Transitional Community to place inmates released from the Rikers Island prison complex into hotels so they could not spread or contract the virus.

Exodus then hired a security company to work at the hotels. For two years, no one was completely sure which company that was.

New York’s checkbook identified “Global Security Solutions” as the company hired to guard the hotel, but their attorneys told reporters at The City that they had no involvement.

Emails from Exodus’ lawyers identified “Global Operations Security” as the correct company, but a staffer there refused to put reporters in touch with the company.

Finally, the mayor’s office told The City that “Global Operations Security Services” was the company that actually provided security. This third company promptly emailed the mayor to say that it “is not associated in any way, shape or form” with Rikers inmates.

The confusion caused Adams’ office to launch a formal investigation. This June, it was revealed that the “Global” companies were all red herrings; Exodus had secretly paid $12 million for Watchforce Security Services to guard the hotels.

No license?

Watchforce, though, did not actually have a security license, so it paid $8.3 million to other companies that could legally take its place. The remaining $3.7 million is unaccounted for.

Hiring a fake security company is preposterous, which is why the mayor’s office investigated a potential kickback arrangement between Watchforce and Exodus. Some ties between the companies were found, but nothing conclusive.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.

Background: Exodus’ contract was awarded through a no-bid process because of emergency procedures. It was originally supposed to be worth $835,000 but increased to $83 million throughout its 16-month duration, according to The City.

The group was responsible for former inmates at the Wyndham Garden Hotel, where one woman alleges she was sexually assaulted by an Exodus worker.

Mayor Adams held campaign events at the hotel and one of his staffers stayed there for months rent-free, all while prison inmates lived there.

Exodus was rehired with a $40 million contract for “emergency reentry hotel services” that was set to expire this June, even though the mayor’s office was already investigating them, The City reported.

Summary: New York’s vendor spending should be clear and transparent, not something that reads like an Agatha Christie novel.

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This article was originally published by RealClearInvestigations and made available via RealClearWire.