The biggest RIOC scandal – for now, at least – forced three resignations and a jail sentence. But more important today, it shines a glaring light on current failures in accountability – and its board’s along with Governor Hochul’s apparent willingness to look the other way.
By David Stone
Introduction to RIOC’s biggest scandal…
Researching the scandal that engulfed RIOC in 2012, I wasn’t expecting it to resonate so clearly with today’s administration and its lack of accountability.
But then, I got a look at a report from the Inspector General, written in 2014. Its slashing review of RIOC corruption includes how at least one RIOC executive used Southpoint Park as a personal piggy bank. But there was far less money spilling over, tempting the greedy and self-enriching types, back then.
Worse, though, was the utter failure of the state agency’s board, insiders and elected officials doing anything about it. Much like what we see today
The first big RIOC scandal hit the headlines only because local residents raised enough hell to wake up Albany. Then as now, nameless insiders in the Governor’s Chamber run RIOC’s daily operations, using patronage employees onsite.
And as you’ll see, it’s not just that Vice President of Operations Fernando Martinez hauled in $183,000 in bribes, it’s that the largest chunk came from money for cleaning up Southpoint Park.
Roots of the crimes…
As the IG report shows, Martinez started raking in “fees” from Bright Cleaning Solutions before hiring on with RIOC. Then, as today, RIOC’s hapless board members twiddled their thumbs in extreme negligence yet were never held accountable.
We don’t know what Martinez’s connection was inside RIOC. But he got a monthly finder’s fee of $1,000 and a slice of the profits.
During this period, Martinez worked at SUNY Downstate Medical Center, according to his LinkedIn profile.
Martinez’s friend, Xavier Ramos, owned BCS, a fact withheld from RIOC, and he brought the company and his deal with him to 591 Main Street.
The IG also cited Martinez breaking RIOC and state rules about nepotism, hiring relatives, even creating a whole new job title for one who co-workers found incompetent. Today’s president/CEO Shelton J. Haynes has brought in at least one friend from out of state, placed them in a critical position with a six figure salary, and also created new job titles that came with fancy raises.
But the big deal, the one that should be a bright red beacon for RIOC’s board and current management, is what Fernandez pulled off in Southpoint. Did history repeat itself?
Before the fit hit the shan, Martinez pocketed $74,000 of the $252,500 approved by RIOC’s inattentive board for cleaning up Southpoint — all of it — but the horror story hardly ends there.
Getting the big haul out of Southpoint… with unanimous board approval
The scheme started small.
Declaring an emergency, avoiding standard procurement guidelines, Martinez cobbled together a set of three bids, using two for information. That led to a November 2008 award of $43,500 to none other than Bright Cleaning Solutions, run by his finder fee-paying pal.
Although Fernandez concealed that maneuver, nowhere does it appear that anyone objected – least of all the spineless board – to his hiring of an unqualified janitorial service for an environmental clean-up job. BCS’s credentials were never publicly questioned by RIOC CEO Steve Shane or by the board.
They just took money collected from residents and handed it over to an unqualified vendor who, in turn, kicked a chunk back to Fernandez.
But it didn’t stop there.
Just a month later, RIOC gave BCS another $6,500 because “…the cleanup had uncovered a large number of household, non-biodegradable materials at the site such as mattresses, carpets and plastics, which required larger equipment and more disposal containers than anticipated.”
If you follow RIOC’s boardroom shenanigans, this is sadly routine stuff.
Stepping up the game in the biggest RIOC Scandal…
It was just too easy, the board so negligent, oversight nonexistent.
Martinez and Ramos were only getting started. That same month, December 2008, Martinez said clean up of Southpoint Park was done, after only a month. But he had more up his sleeve.
In a memo, he recommended expanding the project to include cleaning up the shorelines. To the tune of $210,000. Shane agreed to “beautify” the shorelines and presented the deal to the board in January.
Is this beginning to sound familiar…?
As previously noted, out team of experts determined, through rigorous analysis, that only one thing in the universe is harder than getting unanimous RIOC board approval for spending public money.
That’s “falling off a log,” our experts found.
And you guessed it. The $210,000 award got the nod in May, 2009. This was for the same work RIOC’s paying for again, today, approved by a generally identical board of enablers… er, directors.
RIOC, again with unanimous board approval, is currently paying another favored contractor, Langan, hundreds of thousands more for the work supposedly completed over ten years ago. Using your money.
Of course, it’s even worse.
Evidence is clear that Southpoint, from top to bottom, is filled with toxic wastes, as we reported. BCS could never have cleaned it all up in a month, and Langan’s own, long concealed 2014 survey showed shorelines saturated with multiple toxins.
Where did they come from?
RIOC, of course, refuses to answer, and there is no evidence of any current testing prior to the rush for converting Southpoint into Brooklyn Bridge Park North and the Shelton J. Haynes Rock Farm.
Collateral damage…
Small by comparison, collateral damage rolled on through the next six months.
Powered by noise created by activist Roosevelt Islanders, investigations led to the forced resignations of RIOC president Leslie Torres and CFO Steve Chironis.
The IG got Torres for abusing a RIOC credit card, absenteeism and misusing a state vehicle. She resigned in September 2012.
Martinez managed to hang on until December and, as a result of the IG investigation, pleaded guilty to one felony in a 2014 deal.
Chironis, who seems to have profited the least personally, misusing a credit card for meals, paid a price for enabling the whole mess. He lasted until August 2013.
Conclusion: the biggest RIOC scandal today…
The repercussions are several.
First, the biggest RIOC scandal undermined trust, and while subsequent steps shored up control and accountability, 2021’s shenanigans prove its still easy to get around the guardrails as long as board chairs are filled the big butts of Yes Men. Secrecy and lying remain built into RIOC.
We can’t say it enough. When you’re doing the right thing, secrecy and dishonesty are unnecessary. On the other hand…
And another point made by activist Frank Farance: “Stupid people keep doing stupid things.”
Second, the serious issue of toxic wastes in Southpoint remains unaddressed, and RIOC fought back against considering it. Risks – and liabilities – are already present, after RIOC and Langan failed at telling anyone about toxic wastes discovered in 2014. Note: The entire area of Southpoint around The Smallpox hospital has never been addressed at any time. RIOC and partner Langan simply left it there.
And for five years, thereafter, they let workers get exposed on a daily basis, never issuing a single warning.
Third, and probably most impactful in the long run, the utter failure of firewalls in place for protecting the public…
Largely under Albany’s control, not a single local elected official raised a finger to stop RIOC’s negligence, incompetence and revenge-seeking. In fact, each leans on Albany for political backing, and none represents constituents first.
Stress calls out weaknesses, and ours are glaring.
Finally, that extends to RIOC’s negligent board. Fiduciary responsibility for overseeing the agency’s operations is nonexistent.
Three sat through the first big RIOC scandal, unanimous, one and all, and show no remorse or even learning from the experience.
Where oh where is the Inspector General today?
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[…] and Steve Chironis was vice president and chief financial officer. In 2014, both left their jobs after scandal raked RIOC, and Martinez eventually served time in […]
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