NYC Gave Embattled Homeless Hotel Operator Deal Despite Woes
(THE CITY) Yoav Gonen, February 16, 2020
City officials awarded a Queens nonprofit a $359 million contract to shelter homeless families in hotels — even after questioning everything from loans to a massive hiring spree, records show.
Childrens Community Services agreed in February 2017 to be overseen by a fiscal monitor — and to address “concerns about governance capacity,†according to documents obtained by THE CITY.
The nine-page corrective action plan the Department of Homeless Services inked with the nonprofit before sealing the deal four months later apparently didn’t work.
Childrens Community Services was put under a court-appointed receiver last week after city lawyers alleged fraudulent billing involving an array of subcontractors. The nonprofit, which formed in 2014, has seen its contracts swell to nearly $800 million.
An examination by THE CITY of the corrective action plan, contracts and court papers suggests that the de Blasio administration had existing serious issues with Childrens Community Services — but went ahead with new deals anyway as New York’s homeless crisis grew.
Among the revelations contained in the documents:
• In the months before the city gave Childrens Community Services the $359 million contract in June 2017, the nonprofit was instructed to enlist a board chair — and hire a chief financial officer, executive director and human resources director.
• Meanwhile, the nonprofit told the city it rapidly expanded its payroll from 35 to 785 employees by hiring former temp workers. It later emerged in court papers that Peter Weiser, an ex-board member, allegedly operated an unlicensed temp agency that was due a 43% cut of gross salary for staff recruitment for the nonprofit.
• City officials sought evidence of board approval of a $100,000 loan from CEO Thomas Bransky to the organization in 2014. Also missing was documentation for a $1.8 million interest-bearing loan made to the nonprofit by a private trust allegedly connected to Weiser.
• Department of Homeless Services officials also requested a list of board members, ethics rules, job descriptions, salaries and tax filings — as well as proof that board members had settled liens for unpaid taxes.