NYS Inquiry Faults RIOC Under Torres

Written by Dick Lutz on . Posted in Web Extras

[UPDATED:]  At the top, RIOC was a loosely run invitation to lie, cheat, and steal, during Leslie Torres’ presidency, according to a report issued August 7 by the New York State Inspector General.

The long-expected I.G. report, running 55 pages, cites nepotism, falsification of résumé details, payment for substandard services, misuse of corporate credit cards, absenteeism at the top, and lack of oversight, among mis-steps ranging from lax to unethical to illegal.  It cites some minor heroism by third-tier RIOC employees who called attention to the misdeeds, but points a finger at Torres, Vice President Fernando Martinez, and Chief Financial Officer Steve Chironis.  All three have left RIOC.  Former RIOC President Steve Shane is not criticized directly, but the report notes that he took the word of the primary offender, Martinez, in a judgment that later proved faulty.

The Inspector General’s full report is available here.

Martinez was sentenced to six months in jail after pleading guilty to a charge arising from his activity.  (See The WIRE, February 8, 2014.)  Torres and Chironis resigned, as did Michael Smith, the brother-in-law Martinez hired as Director of Parks and Recreation after allegedly coaching him to lie on application forms, then taking a financial kickback on his pay.  Martinez also used the printing services of another brother-in-law, then insisted that RIOC pay for costly and substandard work even though, in one case, the material was delivered too late to use.  He also arranged a kickback on cleanup work from Bright Cleaning Solutions.

Martinez

The Inspector General’s investigation began in March 2012, after a complaint that Martinez had hired Smith.  The inquiry revealed that he had conspired with Javier Ramos, a longtime friend who owned Bright Cleaning Solutions (BCS), to help Ramos underbid two competitors on a Southpoint Park cleanup, improperly designated the cleanup as an “emergency” to circumvent certain bidding procedures, and then took a $1,000-per-month consulting fee and a portion of BCS’s profits.  The report says Martinez received $183,000 in such payments and that they were actively concealed in the form of payments to a shell corporation created by Martinez, in payments to Martinez’s wife, and in other ways.

Later, the report says, Martinez arranged extension of the BCS contract to include further work well above the amount that would ordinarily require competitive bids, using a “continuation of existing services” or an unnecessary “emergency” waiver.  Overall, BCS received $252,000 from RIOC, and paid $74,000 to Martinez.  In total, Ramos/BCS payments to Martinez amounted to $183,000.

Martinez also arranged for RIOC to use the services of Fuse Printing, a company owned by Stuart Standard, his wife’s brother, and failed to disclose that relationship to others in executive-level positions at RIOC.  The I.G. says that Martinez circumvented normal RIOC procurement policies and personnel.  In the case of the initial clean-up contract for Southpoint Park, he is said to have learned the bid amounts ($50,000 and $44,680) of two other firms, then to have arranged for a slightly lower bid ($43,500) by BCS.

Hiring Smith

Over 75 people applied for the job that Martinez steered to Mike Smith (husband of Martinez’s sister).  It involved responsibility “for the daily management, operation, [and] coordination of parks, special events, film shoots, sports facilities, fields, recreation and athletic programs.”  Smith’s credentials and education fell short of the qualifications listed in an ad posted on Monster.com, but Smith “testified that, at the suggestion of Martinez, he fabricated portions of his résumé to make it appear that he met those requirements, and lied in answer to yes/no questions about whether a relative was employed by RIOC.”

RIOC Director of Human Resources Claudia McDade told the I.G.’s investigators that she did not interview Smith, but had interviewed at least two other candidates she deemed qualified.  Yet, Martinez claimed that “recruiting candidates was ‘difficult.’”  McDade told the I.G.’s investigators that she had approached RIOC’s then-president Shane, “who informed her that he and Martinez had interviewed Smith and wanted to offer him the position.”  Shane told the I.G. that he had no recollection of interviewing Smith, and said that Martinez had not informed him of the familial relationship, despite a Martinez claim that he had revealed it to Shane.

“Martinez asserted to the Inspector General that he believed that the relationship was not a problem because Smith was not a blood relative,” reads the report, later continuing, “As soon as Smith assumed the position...  he was perceived by a number of RIOC employees as unqualified...  To the Inspector General, one RIOC employee reported instances where Martinez appeared to be assisting Smith with his job duties and rectifying problems that he had caused.  The employee testified that she did not understand why Martinez covered for Smith’s shortcomings until one day when Martinez brought his children to the RIOC executive offices and she overheard the children call Smith ‘Uncle Mike.’”

Torres

Leslie Torres

Leslie Torres became RIOC President in August 2010, and left in September 2012.  “This investigation found that Torres was derelict in [her] duties...  consistently absent from RIOC’s offices, abused RIOC’s vehicle usage policy, misused her state credit card, and created an atmosphere that allowed other RIOC executives to also misuse their credit cards.”

The “investigation revealed that Torres was chronically absent... during regular business hours...” and that “A RIOC employee testified that...  Torres instructed an administrative assistant to turn on the lights in her office to give the appearance that she was present.”  Torres is reported to have testified, “No, it wasn’t to make it appear that I was there...  I think it’s important that all the lights be on so the office looks open when people walk by...”  The I.G. report responds, “Torres’s response strains credulity.”

“Martinez and Chironis conducted many meetings that Torres should have directed...  Torres discontinued weekly executive management meetings...”  “Some RIOC employees testified that Torres had a ‘closed door’ policy, refused to meet with residents, and did not ‘want to deal with the public at all.’”

According to the report, Torres said that “from the beginning, she knew the job was not ‘a good fit’ for her.”

Torres charged expensive meals, says the I.G.’s report, “with both RIOC employees and non-RIOC employees.”  A chart on page 37 of the report shows charges from $1.75 at Starbucks to $278 at a restaurant listed as “Brasserie.”

The report goes on to say that Torres “routinely misused her state vehicle” to commute (she admitted this) and “on weekends as her personal vehicle,” including tolls charged to the RIOC E-ZPass account, and one weekend that involved 532 miles of driving, including tolls at the Whitestone, RFK, Yonkers, Harriman, and Tappan Zee sites.

Chironis

Steve Chironis

CFO Steve Chironis is faulted in the report for inadequate oversight on financial matters.  (He supplied a response to The WIRE, which follows this report.)

The report charges that he “tacitly approved Torres’ misuse of the RIOC vehicle,” then incorrectly accounted for Torres’ personal use of the vehicle.  Chironis says he used the standard in force at the time.

The report says that Chironis also failed to deal properly with Torres’ misuse of RIOC credit cards – charging “significant sums she referred to as ‘business expenses’ but which were prohibited by RIOC’s credit card policy...  This rampant credit card abuse took place with the knowledge and approval of Chironis, who [also] violated RIOC’s credit card policy...” charging “over $2,000 in meals, claiming them as business expenses.” Some of the restaurant charges included Torres.

Several of Chironis’ charges were at a restaurant partly owned by his wife, including one for $722.08 and a tip of $120.  In an August 20 conversation with The WIRE, Chironis said that the event in question was a party for Tramway employees when the Tram returned to service after renovation, and that Torres, his superior at RIOC, approved both the party and the location.

Asked for a statement, Chironis provided a letter (this page), though he expressed concern about antagonizing the I.G.’s office.  He said that a letter signed by all the resident members of the RIOC Board of Directors was a significant help to him in obtaining his next job.  “I want that letter buried with me,” he said.

But the I.G. report reads, at one point, “Chironis’s testimony to the Inspector General was inconsistent and questionable.”

Recommendations

The I.G. report concludes with 10 pages of  “Findings and Recommendations,” mostly concerned with tightening policies and their administration.  Many of these have already been adopted by subsequent RIOC management. 


Steve Chironis supplied The WIRE with the following commentary on the I.G.'s report.

To the Roosevelt Island Community:

What I will say relating to the whole matter is this:  Look, I get it, the Martinez “episode” happened under my watch, “the buck stops here,” and I lost my job because of it.  However, I would like to state the following:

(1)  Fernando Martinez:  I was fooled like the rest of us.  The “powers that be” gave him their trust, which he ultimately betrayed.  Everyone should be allowed a second chance.  He has repaid his debt to society, and now has the opportunity to turn his life around, and I sincerely hope he does.  If Jesus can forgive him, I certainly can!

(2)  I.G.’s reporting of approximately $3,200 of “inappropriate charges” by me:  I am stating for the record that all the expenses noted in the report were for legitimate business expenses.  All charges were signed off by the President and the Controller.  As for the $720 that was spent at my wife’s restaurant, it was fully disclosed prior to going.  The occasion was to reward my staff for a job well done upon the completion of the annual budget.  Even the one and only time that RIOC took out the POMA (Tram construction contractor) project managers for lunch to celebrate the reopening of the Tram and to discuss ongoing punch-list items was also classified as “inappropriate.”  In fact, charges for all business lunches and dinners for the two-year period were “inappropriate,” according to the  I.G., but they are typical for a corporate executive who, the I.G. acknowledges, had taken on many of the president’s duties.  What they claimed is that the charges had “no value” and were “unnecessary.”  This seems to be purely subjective and almost impossible to prove otherwise, as it would be for most business lunches.  I also want to note that, at the time of such expenditures, I wasn’t aware of a policy in force restricting such types of expenditures.  In fact, almost two years later, in October 2012, the ABO [Authorities Budget Office] issued a recommendation to all State agencies restricting and/or eliminating such expenditures, which most agencies hastily implemented, RIOC included.

(3)  Leslie Torres’ “Personal Use of State Vehicle:”  I followed the State policy in force at the time (NYS DOB D-750, dated 9-18-2009), which states, “State Officials of Cabinet Rank and Heads of Agencies shall not be assigned a permanent vehicle but shall have ‘unrestricted’ use of their agency fleet vehicles.”  It goes on to say that “personal use” must be reported as income.  This was done.  As to the amount reported, it was based on the miles that Ms. Torres reported to me.

(4)  Leslie Torres’ absence from the office:  Approximately three months after Ms. Torres started, she submitted her resignation and made a request to the Appointments Office for a transfer.  She had a 20-year record in government in mid-management positions, [and had been] asked to head a very political agency, a position that few people wanted and [that was] difficult to fill.  I also believe it was portrayed to her as a “temporary” position.  This does not justify her actions, but it does reveal that the State was put on notice very early in her administration.  It was apparent, to everyone in a position to correct the situation, what was going on.

I would like to state that I am proud of what was accomplished during my six years at RIOC.  Working at RIOC is quite difficult at times; it’s an environment where, quite often, you are caught in the middle between the State and the residents.  There are many dedicated, hard-working employees at RIOC who rarely get acknowledged for their accomplishments, but quite often are publically chastised at the first sign of trouble.  I realize that my forced resignation was made at a level above RIOC management, and I hold no ill will and wish all at RIOC the best.

Steven Chironis

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