Read the following articles about a case of bribery in New York City:
Numbers Scribbled Here and There Added Up to $600,000 in Bribes, U.S. Says and City Official Accused of Taking Bribes, Left in Boxes and Cups.
Discuss the type of corruption that was perpetrated and the red flags in the case. How did the scheme come to light?
What steps would you implement to prevent this type of fraud in the future?
In recent years, federal prosecutors say, Wendell B. Walters has spent a fair amount of time scribbling down numbers on little pieces of paper.
He did it in a coffee shop in Manhattan in 2002, when he wrote “250.” He did it at a golf driving range in 2007; then, the number was “70.” And he did it three other times, according to court papers unsealed Thursday in his federal bribery and racketeering conspiracy case.
In each instance, the papers say, Mr. Walters, who was an assistant commissioner at the city’s Department of Housing Preservation and Development, was demanding a bribe.
Each number stood for how many thousands of dollars he wanted. When all was said and done, according to a search warrant affidavit, the numbers added up to something in the neighborhood of $600,000.
Mr. Walters, 49, was suspended from his job after his arrest on Thursday and, with the six developers charged along with him in federal court in Brooklyn, faces up to 20 years in prison if convicted. His lawyer, Howard R. Leader, did not return a call seeking comment. All seven have pleaded not guilty.
As a result of the case, which has raised some questions about the oversight of Mayor Michael R. Bloomberg’s $8.5 billion affordable housing program, the housing agency is reviewing how it awards projects to developers and contractors and how they are vetted. The agency is the largest municipal developer of affordable housing in the United States.
The rules say companies may be invited to bid through a process called requests for qualifications; the agency can choose from a list of approved companies; and it can select “a sponsor for a project by any method which H.P.D. determines will best further the purpose of the program.” That includes, “in the discretion of H.P.D., by a direct designation of an entity judged by H.P.D. to be suitable for the task” — essentially, whomever the agency wants.
Mr. Bederman said that in the Neighborhood Entrepreneurs Program, which was the focus of the indictment, all projects had been awarded through requests for qualifications.
Mr. Walters’s role in the process was still unclear on Friday. The indictment and a search warrant affidavit for Mr. Walters’s home in Harlem and his office at the agency’s headquarters in Lower Manhattan allege that he accepted approximately $600,000 in bribes from contractors and developers in exchange for steering to them $22 million worth of agency projects in Brooklyn, the Bronx and Queens. The affidavit even suggests that the Harlem home, on historic Strivers’ Row, was itself a form of bribe from a developer he had helped and who has since died.
The Mason Tenders District Council of Greater New York and Long Island, which represents demolition and some construction workers, said Friday that it had little doubt that the agency was at fault. “The problem is how H.P.D. conducts its business and awards contracts,” said its spokesman, Richard Weiss, in an e-mail. Some unions have been upset with the agency for awarding jobs to contractors that use nonunionized labor.
Officials have said that the investigation, involving several agencies, including the F.B.I., the city’s Department of Investigation, the Internal Revenue Service, federal prosecutors in Brooklyn and the federal Labor Department, is continuing, and they will be combing through evidence they seized in the searches of Mr. Walters’s home and office.
According to the court papers, Mr. Walters did not always receive what he asked for. Stevenson Dunn, a developer who was among those charged, told a cooperating witness that Mr. Walters had asked him for $75,000 “as a bribe to help secure additional work with H.P.D.,” according to the search warrant affidavit. But Mr. Dunn, a high school friend of Mr. Walters, paid only $25,000 and pronounced Mr. Walters “greedy.”