Campaign News

After getting away with stealing money from his immigrant employees’ paychecks for years, a major contractor who worked city projects across the five boroughs was slapped on Monday with a $3.2 million fine and barred from doing business with the city and state for five years.

A six-year investigation carried out by the New York City Comptroller’s Office used undercover video, subpoenas, union records and a city agency paper trail to uncover the kickback scheme, Comptroller Scott Stringer said in a statement on Monday.

Stringer said K.S. Contracting Corporation and its owner, Paresh Shah, cheated dozens of immigrant workers out of their pay and benefits.

Shah told the city he was paying his workers the prevailing wages required under the New York State Labor Law. In reality, however, only about half of the workers received paychecks. Those who did were required to cash the checks and then surrender the money to company supervisors. Those supervisors would take a cut and then redistribute the leftover cash to employees , including those who did not receive paychecks, paying them at rates significantly below prevailing wages.

Before getting their money, many of the workers were required to sign a paper stating that they were, in fact, being paid the prevailing wage.

One supervisor was surreptitiously filmed in the act of counting workers’ surrendered cash in the front seat of his car. (See video at brooklyneagle.com.)

K.S. Contracting reported that it paid its workers combined wage and benefit rates starting at $50 per hour (or roughly $400 a day plus benefits) but actually paid daily cash salaries starting at just $90 per day and going, in some cases, as high as $200.

Part of the paper trail the Comptroller’s Office investigators uncovered in building a case against K.S. Contracting Corporation. Photo courtesy of the Office of the ComptrollerPart of the paper trail the Comptroller’s Office investigators uncovered in building a case against K.S. Contracting Corporation. Photo courtesy of the Office of the Comptroller

Between August 2008 and November 2011, the company cheated at least 36 workers out of $1.7 million in wages and benefits on seven New York City public works projects. The majority of the workers were immigrants of Latino, South Asian, or West Indian descent.

Stringer said that the need to stand up for immigrants was especially important in the time of President Trump.

“Contractors might think they can take advantage of immigrants, but today we’re sending a strong message: my office will fight for every worker in New York City,” he said.

The brazen scheme had gone on for years; an employee first filed a complaint with the office in May 2010.

K.S. Contracting was named as one of the worst wage theft violators in New York in a report by the Center for Popular Democracy in 2015. The full details of what was going on came out at a four-day administrative trial in May 2016.

The company, incorporated in New Jersey, was awarded more than $21 million in contracts by the city’s Departments of Design and Construction, Parks and Recreation and Sanitation between 2007 and 2010. Projects included the District 15 Sanitation Garage and the Barbara S. Kleinman Men’s Residence in Brooklyn, the Morrisania Health Center in the Bronx, the 122 Community Center in Manhattan, the North Infirmary Command Building on Rikers Island, Bronx River Park, and various city sidewalks in Queens.

K.S. Contracting is not the only contractor to rip off its immigrant employees. Since taking office in 2014, Comptroller Scott M. Stringer’s Bureau of Labor Law has assessed more than $20 million and barred 40 contractors from state and city contracts due to prevailing wage violations, according to the Comptroller’s Office.

A number of workers’ rights groups and immigrant organizations praised the comptroller’s investigation.

"At a time when exploitative employers are feeling increasingly emboldened by Trump’s hateful rhetoric, it is imperative that our city's leaders are taking a strong stance in defense of immigrant workers,” Deborah Axt, executive director of Make the Road New York, said in a statement.

“Too many employers in New York City exploit minority and immigrant workers. And it’s no secret that many immigrant workers are fearful of retaliation for standing up for their rights, especially in an environment where they are afraid of being deported,” said Lowell Barton, organizing director of Laborers Local 1010, LiUNA!

By Mary Frost

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New York/Washington. Efforts to fill top positions at some US Federal Reserve regional branches are casting a spotlight on a decades-old process that critics say is opaque, favors insiders, and is ripe for reform.

Patrick Harker took the reins as president of the Philadelphia Fed this week, in an appointment that attracted scrutiny because he served on the committee of directors that interviewed other prospective candidates for the job he ultimately took.

The Dallas Fed has been without a permanent president for more than three months as that search process stretches well into its eighth month. And the Fed’s Minneapolis branch abruptly announced the departure of its leader, Narayana Kocherlakota, more than a year before he was due to go, with no replacement named to date.

The delays and reliance on Fed employees in picking regional Fed presidents can only embolden Republican Senator Richard Shelby to push harder for a makeover of the central bank’s structure, which has changed little in its 101 years.

A bill passed in May by the Senate Banking Committee that Shelby chairs would strip the New York Fed’s board of its power to appoint its presidents. And it could go further, given the bill would form a committee to consider a wholesale overhaul of the Fed’s structure of 12 districts, which has not changed through the decades of shifting US populations and an evolving economy.

The bill is part of a broader conservative effort to expose the central bank to more oversight, and some analysts saw the Philadelphia Fed’s choice as reinforcing the view that the Fed needs to open up more to outsiders.

Nine of 11 current regional presidents came from within the Fed, a proportion that has edged up over time. Twenty years ago, seven of 12 were insiders.

“The process seems to create a diverse set of candidates in which the insider is almost always accepted,” said Aaron Klein, director of a financial regulatory reform effort at the Bipartisan Policy Center.

Since it was created in 1913, the central bank’s decentralized structure was meant to check the power of Washington, where seven Fed governors with permanent votes on policy are appointed by the White House and approved by the Senate.

The 12 Fed presidents who are picked by their regional boards usually vote on policy every two or three years, and they tend to hold more diverse views.

Former Richmond Fed President Alfred Broaddus told Reuters the regional Fed chiefs have more freedom “to do and say things that may not be politically popular” because they are not politically appointed. “On the other hand, there is the question of legitimacy since they are appointed by local boards who are not elected.”

“Tone deaf”

Two-thirds of regional Fed directors are selected by local bankers, while the rest are appointed by the Fed’s Board of Governors in Washington.

Critics question how well those regional boards — mostly made of the heads of corporations and industry groups meant to represent the public — fulfill their mission.

Last year, a non-profit group representing labor unions and community leaders organized by the Center for Popular Democracy, urged the Fed’s Philadelphia and Dallas branches to make the selection of their presidents more transparent and to include a member of the public in the effort.

Philadelphia’s Fed in particular proved “tone deaf” in its head-hunting effort, said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey.

Harker was a Philadelphia Fed director when the board started looking to replace president Charles Plosser, who left on March 1, and he was among the six directors who interviewed more than a dozen short-listed candidates for the job, according to the Philadelphia Fed.

But on Feb. 18, Harker floated his own name, recused himself from the process and a week later his colleagues on the board unanimously appointed him as the new president.

While the selection follows Fed guidelines and was approved by its Board of Governors, it raised questions of transparency and fairness.

“The Philadelphia Fed’s search process might have made perfect sense in a corporate environment, but is obviously problematic for an official institution,” said Crandall.

The board’s chair and vice chair, Swathmore Group founder James Nevels and Michael Angelakis of Comcast Corp, respectively, declined to comment, as did Harker.

Peter Conti-Brown, an academic fellow at Stanford Law School’s Rock Center for Corporate Governance, and an expert witness at a Senate Banking Committee hearing this year, proposed to let the Fed Board appoint and fire regional Fed presidents or at least have a say in the selection process.

In the past, reform proposals for the 12 regional Fed banks have focused on decreasing or increasing their number and their governance.

Changes to the way the regional Fed bosses are chosen could strengthen the influence of lawmakers at the expense of regional interests.

For now, delays in appointments of new chiefs force regional banks to send relatively unknown deputies to debate monetary policy at meetings in Washington, as Dallas and Philadelphia did last month when the Fed considered raising interest rates for the first time in nearly a decade.

The Minneapolis Fed still has time to find a new president before Kocherlakota steps down at year end.

“For now the Fed criticism is just noise, mostly from Republicans,” said Greg Valliere, chief political strategist at Potomac Research Group. “But once the Fed begins to raise interest rates … then the left will weigh in as well.”

Source: Jakarta Globe

Philly.com - October 15, 2014, by Kia Hinton - Recently, charter schools have made headlines nationwide. This summer, the FBI raided charter schools in Connecticut, Arizona and Ohio. The Annenberg Institute for School Reform released a report on dramatic shortcomings of charter schools, saying "the lack of effective oversight means too many cases of fraud and abuse, too little attention to equity, and no guarantee of academic innovation or excellence."

Pennsylvania has seen its share of charter headlines as well. Earlier this month, ACTION United, the statewide organization I serve on the board of, released a report that uncovered no less than $30 million in fraud by Pennsylvania charter operators since the passage of the 1997 Charter School Act. Philadelphia, which now feeds $800 million a year into charter schools, has simultaneously starved the traditional public school system for years now. Students lack critical services because of the layoffs of nurses, librarians and counselors. Teachers are paying for supplies and even toilet paper out of their own pockets. And after a six year moratorium on charter expansion in Philadelphia, we learned our school district was required to accept a flood of new charter applications as part of the cigarette tax deal.

When I hear about fraudulent charter operators who steal tax dollars from Philadelphia's working families, it's personal.

My family has lived in Southwest Philadelphia for generations, in the same two-story house I grew up in. My youngest child attends Longstreth Elementary, my alma mater. Another of my children attends a Mastery Charter School. All of my children deserve a quality education.

Fraud, waste and mismanagement threaten my children's access to a quality education. Public money is being invested in a massive, fast-growing industry that fundamentally lacks meaningful oversight. Here in Philadelphia, we have just two auditors for 85 charter schools. That lack of oversight enabled people like the founders of Agora Cyber Charter and New Media Technical School to prop up their personal businesses with more than $7 million that was meant for Philadelphia's children.

For these reasons, ACTION United is calling for a statewide moratorium on new charter schools until all charter schools can assure us that they have appropriate fraud-prevention measures in place. We are asking the School Reform Commission to mandate fraud prevention in the charter application process. We are approaching all charter schools to ask them to take our fraud prevention pledge and commit to implementing a fraud risk management program at their nonprofit.

Politicians are making a lot of promises this election season, so here's something they should keep in mind: As long as we continue to lack local control over our own schools in Philadelphia, we expect the governor and the SRC to ensure precious school dollars are spent on our children - not lost to fraud.

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THE KANSAS CITY Federal Reserve’s annual symposium in Jackson Hole, Wyoming, attracts central bankers, economists and the global elite. The past two years, some new faces came to Jackson Hole: low-wage workers who object to the Fed raising interest rates when too many at the bottom rungs of the economic ladder still struggle.

This year, somebody appears to be ensuring that ordinary people won’t disrupt the party.

The Fed Up campaign, a coalition that brought the workers to Jackson Hole in 2014 and 2015, has filed a formal complaint with the departments of Justice and the Interior, along with the National Park Service, because their hotel reservations for this year’s conference were mysteriously canceled.

Despite paying in advance for spots at the 385-room Jackson Lake Lodge, the Grand Teton Lodge Company told the campaign July 26 that their reservations would not be honored, citing a “computer glitch.” Grand Teton operates the lodge, a publicly owned facility, under a contract with the National Park Service.

Thirty-nine members of the coalition planned to attend this year, but the lodge said computer glitch resulted in overbooking its rooms by 18. Instead of spacing that out among all Jackson Lake lodge guests, the company cancelled all 13 of the Fed Up campaign’s rooms. So nearly three-quarters of the cancelled reservations belonged to the Fed Up group, even though they were told when they booked that 100 rooms were still available at the lodge.

“There is no legitimate explanation for the company’s decision,” wrote Fed Up campaign chair Ady Barkan in the complaint, which alleges possible violations of the Civil Rights Act of 1964 and the First Amendment right to peaceable assembly. “This is egregious and disparate treatment.”

The coalition’s reservations were made in the names of staffers for three of its member organizations – the Center for Popular Democracy, the Economic Policy Institute, and the Center for Economic and Policy Research – using work email addresses.

In an email statement, Alex Klein, vice president and general manager of Grand Teton Lodge Company, said: “This summer we encountered an error with our booking system that resulted in our Jackson Lake Lodge property being oversold by 18 rooms for three peak nights in August. We worked proactively and diligently with guests to relocate them to our nearby Flagg Ranch property, and offered to keep them on a wait list for available rooms should there be cancellations at the Jackson Lake Lodge. We regret inconveniencing any of our guests.”

The Jackson Hole symposium takes place from August 25-27. The event typically features a highly anticipated speech by the Federal Reserve chair – Janet Yellen is expected this year.

In 2014 and 2015, Fed Up brought unemployed workers and local activists to Jackson Hole to highlight how the economy has left behind communities of color and to urge the Fed to hear their voices. Last year, they held an alternative conference in Jackson Hole lodge conference rooms, featuring economists like Nobel Prize winner Joseph Stiglitz.

This year, Fed Up planned to hold a teach-in outside of the lodge, and secured permits for a protest. They still expect 120 members, their largest contingent ever, to attend the proceedings, but they will have to stay in alternative accommodations that are a 20- to 30-minute drive away, separate from symposium guests and the press.

The majority of Fed Up members planning to attend the conference are African-American and Latino, which is why the campaign wants the Justice Department to investigate the matter as a violation of laws ensuring nondiscriminatory treatment in public accommodations. They also want to know if the Kansas City Federal Reserve was at all involved with the decision.

Kansas City Federal Reserve President Esther George has consistently drawn criticism from the Fed Up coalition for wanting to raise interest rates and slow down the economy.

The lodge’s general manager told Fed Up that their reservations were pulled because they were booked in a group of 13, making it easier to cancel them. This, the campaign believes, also violates First Amendment rights to freedom of assembly.

“I recognize that our presence is not desired by either the company or the organizers of the symposium,” Barkan wrote. “But the physical and virtual segregation of Federal Reserve decision-makers far away from the voices and opinions of working class people of color is precisely what the Fed Up coalition is trying to dismantle.”

The incident comes at a sensitive time for the Federal Reserve, which has already been criticized by 127 members of Congress for a lack of diversity among its leadership, which is disproportionately white, male, and either current or former executives of large corporations and financial institutions. Activists believe this homogeneity in race, gender, and background drives central bank decisions that cater to the wealthy and neglect communities of color.

Barkan’s letter to Justice and the Interior concludes: “Once again, the voices and faces of working class people of color have been marginalized … and an opaque, inaccessible, and incredibly powerful quasi-governmental institution has received a bit more insulation from the opinions of the people over whose lives it has so much power.”

The Intercept has reached out for comment to the Justice Department, the Interior Department, and the National Park Service, but did not immediately hear back.

Top photo: National Park Rangers stand silhouetted inside the lobby of Jackson Lake Lodge during the Jackson Hole economic symposium in August 2015.

By David Dayen

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