Yesterday, In an open letter, SAIC’s Chief Executive Officer Walt Havenstein addressed the scandal behind the CityTime payroll project in New York City. Havenstein called the actions of his own employees “criminal.”
Three senior SAIC managers were fired in the scandal. Havenstein said in his letter that “failures of management” led to the firings. He expressed outrage with the project, which automated the timekeeping of 165,000 employees working under various contracts.
“The kind of behavior we have seen in CityTime is criminal and is an affront to everything SAIC stands for as a company. SAIC has a long and proud history, with an outstanding reputation for integrity and strong ethical business practices. That’s why the actions of those involved are so appalling to me and to all of us at the company,” said Havenstein.
When CityTime started in 1998 it was expected to cost around $63 million. However, as the scandal unfolded prosecutors say it became an international conspiracy charging up New York City’s debit card. Lead contractors received kickbacks for each hour worked by consultants, resulting in unneeded staff and inflated worktimes.
Mayor Michael Bloomberg demanded more than $600 million to be repaid back to the city. SAIC agreed to negotiate.
The Wall Street Journal reported that criminal charges were announced against eleven people and a company subcontracting with SAIC. Of the eleven, two are believed to have fled the country, two have pleaded guilty and one has died. The remaining six have pleaded not guilty.