In a historic crackdown on corruption, federal officials have charged more than five dozen employees with the New York City Housing Authority (NYCHA) for accepting cash payments in exchange for awarding “no-bid” contracts. The U.S. Attorney's Office for the Southern District of New York announced that 70 current and former employees allegedly received cash bribes from contractors, demanding over $2 million in bribe money and awarding over $13 million worth of contracts. This marks the largest single-day bribery takedown in the history of the Justice Department.

The defendants, who were all employees during the alleged scheme, were arrested in New York, New Jersey, Connecticut, and North Carolina. Charges include solicitation and receipt of a bribe, extortion, conspiracy, destruction of evidence, and false statements. One defendant was also charged with destruction of evidence and false statements. The alleged bribes occurred when repairs and construction work required NYCHA to use outside contractors. While contractors are typically chosen through a bidding process, there are times when designated staff can hire a contractor of their choosing without soliciting multiple bids.

The defendants demanded cash payments ranging from $500 to $2,000, depending on the size of the contract. Some employees demanded higher amounts. The contractors were required to pay upfront or after completing the work, in order to receive payment from NYCHA. The scheme allowed the defendants to line their own pockets, according to Attorney Damian Williams.

NYCHA's Chief Executive Officer, Lisa Bova-Hiatt, expressed zero tolerance for such illegal activities and emphasized that the agency will work with law enforcement partners to eliminate malfeasance. The agency has faced scrutiny in the past and has been plagued by corruption allegations for years. In 2022, numerous workers were fired for alleged overtime abuse. The Office of the New York City Public Advocate previously recommended that NYCHA establish a reliable tracking system for repairs to investigate substandard work.

Federal prosecutors have accused the defendants of running a "classic pay-to-play" culture of corruption. The scheme affected nearly a third of NYCHA's housing developments, which are home to one in 17 New Yorkers. The defendants awarded more than $13 million in no-bid contracts, under $10,000 each, for essential repairs such as plumbing and window repairs. The defendants demanded bribes valued at 10% to 20% of the contract value, or between $500 and $2,000. Some defendants demanded even higher amounts.

The charges against the 70 defendants include solicitation and receipt of a bribe, extortion, destruction of evidence, false statements, and conspiracy offenses. The New York City Department of Investigation has recommended significant reforms to NYCHA's no-bid contracting process, which the agency has accepted.

The bribery allegations not only harm tenant trust but also compromise tenant safety, as they contribute to dangerous conditions at NYCHA complexes across the city. NYCHA provides housing to more than 300,000 people in 335 developments and receives over $1.5 billion in federal funding annually. The crackdown on corruption aims to restore integrity and ensure high-quality affordable homes for NYCHA residents.