Watching For Waste, Fraud, Corruption
Department of Investigation (DOI) Commissioner Rose Gill Hearn announced the creation of a new, six-person unit to investigate fraud, waste and corruption issues at the city Board of Elections (BOE).
The DOI requested and obtained the funding for the unit in the wake of its report issued earlier this month documenting the BOE’s overspending of more than $2.4 million of city funds by its questionable decision not to consolidate election districts in the November 2011 off-year election, despite being called upon not to waste funds in advance of that election.
That report can be found at www.nyc.gov/html/doi/downloads/ pdf/2013/apr13/pr12boerpt_ 40113.p df.
While the BOE is created by State law and is not under the supervision of the mayor, the DOI has jurisdiction to investigate matters pertaining to the BOE because it is funded by the city and its employees are city employees. Last fiscal year the BOE received $84.7 million in City-funding.
The new investigative unit will allow DOI to focus with consistency on the BOE and investigate any fraud, waste or corruption issues; present corruption prevention lectures to BOE staff for deterrent purposes; and remedy corruption vulnerabilities exposed by DOI investigations.
“DOI’s recent labor-intensive investigation of the November 2011 off-year election, wherein DOI found that millions of city tax dollars were wasted, demonstrates the need for greater accountability of the BOE and the need for more resources at DOI to conduct such investigations,” Hearn said. “The newly created unit will provide the capacity to investigate possible waste, fraud and corruption in an expanded way that was not possible before. The Mayor recognized that the BOE needed consistent investigative oversight and responded by providing DOI with the necessary funds to more regularly oversee the BOE’s activities.”
The DOI will receive approximately $824,000 for a six-person investigative unit. The agency has already begun moving forward on filling those positions.
Over the past decade, DOI investigations have led to the creation of other specified investigative units, including for the Housing Development Corporation and the Not-for-Profit/Vendor Fraud Unit. Those units were created to address oversight gaps, as is the case with the BOE, and to promote DOI’s mission to expose and stop corruption involving City government and safeguard City funds.
Hearn thanks Mayor Michael R. Bloomberg and Mark Page, director of the city Office of Management and Budget, for their action in this matter and for the resources to establish this investigative unit. lish and Spanish for an indefinite period.
Using a portion of New York’s share of the National Mortgage Settlement, in June 2012, Attorney General Schneiderman announced the launch of the Homeowner Protection Program (HOPP), his office’s commitment of $60 million over three years to fund housing counseling and legal services for struggling New York homeowners. Through this program, 35 legal services organizations and 59 housing counseling agencies statewide have received funding to provide free foreclosure prevention services
HOPP counselors provide at-risk homeowners with a range of services, including direct advocacy with lenders, financial counseling and assistance preparing the complex documentation that homeowners need in order to submit applications for loan modifications; an outcome that usually results in lower monthly mortgage payments and prevents foreclosures from going forward but which can take more than a year to negotiate.
In just the first five months of reporting on the HOPP program, roughly 7,400 New York homeowners have been counseled through the HOPP program. Of the total number of families receiving assistance, 2,570 homeowners-or close to 35 percent-have pending or formally approved loan modifications thanks to assistance from one of the HOPP organizations.
This past January, Schneiderman also announced the launch of a statewide consumer hotline to assist those in need of mortgage counseling and Sandy support. By calling 1-855- HOME-456 consumers will be connected with a qualified HOPP counselor or legal service provider within 24 hours.
The hotline is based on a model program administered by the Center for New York City Neighborhoods (CNYCN) that has been operational in NYC for the past 3 years. During that time, the Hotline has generated more than 15,000 calls from consumers struggling to stay in their homes. The attorney general has subcontracted with CNYNC to assist in managing the statewide hotline.
The announcement is the latest part of Schneiderman’s multipronged strategy to stem foreclosures, provide relief to struggling homeowners and hold accountable those responsible for the mortgage crisis. In 2012, he introduced the Foreclosure Fraud Prevention Act, which would impose criminal penalties for knowingly filing false documents in a foreclosure proceeding, or overseeing employees who engage in such activity.
Last year, Schneiderman was appointed by President Barack Obama to co-chair the Residential Mortgage- Backed Securities Working Group. This joint investigation brings together the Department of Justice (DOJ), HUD, the Securities and Exchange Commission (SEC), the Consumer Financial Protection Bureau, several state law enforcement officials, and other federal agencies to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities.
