If there is one blot on Michael Bloomberg’s record as the data mayor, it was his administration’s failure to recognize that contractors who were supposed to be creating a new payroll system called CityTime were stealing from the city. What became known as the CityTime scandal was a massive case of an outside data contract gone berserk. New York’s most famous prosecutor of the era, U.S. Attorney for the Southern District of New York Preet Bharara, would call it “perhaps the single largest fraud ever perpetuated on the city of New York.”38
Bloomberg and his team often preferred getting outside contractors to do their work. It was a way of getting around city employees who too often said, “It can’t be done that way.” Or, “It can’t be done that quickly.”
Bloomberg’s predecessor, Rudolph Giuliani, originally approved the CityTime contract with Science Applications International Corporation, known for their expertise in organizing payroll services for employees of the military and the intelligence agencies. The new system was designed to scan the hands of workers as they clocked in and out. The unions hated it. It was degrading, some argued. One union executive called it “a backdoor form of fingerprinting.”39 More to the point, the installation of CityTime was supposed to cost about $63 million. The final bill, before the federal investigators and prosecutors got involved, was nearly $700 million.
Why didn’t Bloomberg or his data-savvy team notice? Why didn’t the city’s comptroller, who sanctioned every increase in the costs of this contract, raise the alarm? To be sure, once Bloomberg’s Department of Investigation realized the outrage, the city informed federal prosecutors that contractors had been stealing millions of dollars from the city. And when Bharara, then U.S. prosecutor in Manhattan, announced the outcome of the case, he said that Bloomberg’s chief investigator, Rose Gill Hearn, had been “our extraordinary partner” in the matter. “Commissioner Hearn deserves enormous amounts of credit for her leadership in uncovering graft and corruption in the city,” he said.40 But that was later, after the graft and corruption had been going on for years.
Bharara managed to get the company to pay back more than $500 million—with most of it returned to the city of New York. Three of the contractors were convicted of bribery and fraud and sentenced to twenty years in prison. The contractor who helped federal investigators got three years probation. Two other perpetrators fled the country and were believed to be hiding in India. At the sentencing of the three main characters, U.S. District Judge George B. Daniels said that the CityTime scam was “the largest city corruption scandal in decades.”41
In early 2011, sources within the Bloomberg administration had tried to pin the problem on a budget expert who kept assuring them all was okay. Another backup also failed—the city comptroller who was supposed to check on a mayor’s contracts. Comptroller William Thompson’s supporters would claim that Thompson had expressed concerns privately about CityTime. But during his eight years in the job, Thompson’s office conducted 626 audits. Not one uncovered the fraud at CityTime.42 The new comptroller, John Liu, elected in 2009, made CityTime a major issue.
Bloomberg, who valued his reputation as an honest man, was said to be furious in private. When the scope of the scandal was announced, he said, “We just have zero tolerance, absolutely zero tolerance for any kind of corruption whatsoever. And going forward, we’ve taken some steps to ensure this doesn’t happen again.”43
To his radio pal, John Gambling, on New York City’s radio station WOR, Bloomberg did a better job of shouldering the blame. “You can’t look everyplace. If you want to know how big projects have things that slip through the cracks, this is as good an example as you need,” he said. But ever the cheerleader, Bloomberg also found some comfort. “We actually did a pretty good job here, in retrospect,” he said. “We were lucky . . . because with the fines and paybacks, the final price tag was $100 million and cheap at the price. And in the end it turned out because of the recovery [by Bharara] that we saved a lot of money.”44 He would talk about a “few bad apples,” the ones that appear no matter who is in charge. “We actually did a pretty good job here, in retrospect,” he kept saying as the issue came up again and again.45
To his critics, however, CityTime was an important warning about the limits of Michael Bloomberg’s management style as adapted to government work. At his company, this system mostly worked. One former company executive described the way he ran Bloomberg LP:
“Mike is very results oriented. What that means is that how you get there is much less important than the result. When you work for a person like that you have much more freedom and discretion to make your goal . . . and you have autonomy . . . Mike gave you the freedom to reach your goal. It was very common for him to review an outcome and say, that’s not the way I would have done it, but, hey, you got it done.” But he was always watching warily, and “If he felt like the goal wasn’t being met, he would parachute in and become a micromanager.”46
That worked at his company, which had about 7,000 employees when he left for city hall in 2001 to be in charge of 300,000.47 To do their work the Bloomberg way, his top city officials got more freedom. Obviously. They succeeded in important ways, but there were also times when Mayor Bloomberg needed to be a micromanager—to curb abuses at his police department, which caused so much personal distress in his city, or to save taxpayers money by doing a better job of monitoring the contractors for CityTime.
As he left office in 2013 and the CityTime consultants were being convicted of corruption charges, Bloomberg defended his record as “the cleanest administration in New York City’s history.”48 City historians can certainly argue that point, but as one of his critics noted a few years later, “The main thing about the CityTime system is that it actually works.”49
* * *
As mayor, Michael Bloomberg’s goal was to make New York “the Nation’s Leading Digital City.”50 To do that, he pushed to make it more open, accessible, and responsive. He used the mass of data to improve the way the city worked. His administration sidelined many of the rickety, outdated systems to make room for faster, more modern technology. And by the time he left, virtually every office had email.
The Bloomberg way was to put a lot more of the city online, to make the Geek Squad’s data available and understandable for anybody with a phone or a computer. There would be hackathons and app contests—all efforts to figure out the best way to get New Yorkers in touch with their government and better ways to prod that government to respond. By the time Bloomberg left office, you could pay your water bill online and you could even see how much water you were using week by week. It cost the city $89 million to put 835,000 residences online, but you could figure out how much it cost for that relative who stayed a week and took forty-five-minute showers.
Even more important, the city spread its digital footprint to the latest favorite media outlets—at that point, Facebook, Twitter, Foursquare, and Tumblr. The Bloomberg teams wanted plenty of places for people to find news in case of an emergency. If the electricity went out, your city app would still work—at least for a while.
“This isn’t just some stuff,” Bloomberg said at the time. “This is the stuff that makes a difference, day in and day out.” Still, the mayor didn’t like all those extras personally. “I’m very old-fashioned,” he said to the consternation of some of his younger techies. “I still use email.” (That email would become controversial in later years when he failed to put it on the public record.)
Even more important for Bloomberg’s world, the city was doing a better job of keeping up with the boom in private technology. When he signed off at city hall, New York City had nearly 7,000 high-tech companies with 100,000 jobs with an average salary of $118,600 compared to $79,500 average for everyone else. Venture capital firms invested $1.3 billion in high-tech in 2013 alone.51 And the city was ready to provide more talent to these companies with Bloomberg’s new graduate school on Roosevelt Island.
As the New York Daily News put it at the end of Bloomberg’s ti
me in office, “New York is Nerdville-USA.”52
14
THAT PUBLIC SCHOOL BUSINESS
“I was hired to make the schools better. Hold me responsible.”
—Mike Bloomberg, 20031
Michael Bloomberg ran for mayor of New York City in 2001 promising to fix the largest and most complex public school system in the country. It was hardly a novel pledge for city politicians who had long recognized that the system was a mess—an impenetrable bureaucracy and a management structure so tangled and slow that a frustrated Mayor Giuliani once suggested it “should be blown up.” Most city politicians would only complain about the problem for 1,200 schools, 1.1 million students, and 80,000 educators. They could not, or would not, attempt to actually make the public education system work for so many students. Once again, Bloomberg vowed to be different. For him, the city’s schools were much like a distressed and mismanaged enterprise that could not serve enough of its students, or customers, as some Bloomberg people liked to call them. For starters, no one was really in charge. Then there were too few good choices for students who were too easily shoved into a failing school in their neighborhoods. It soon became clear that Bloomberg’s plan for city schools was nothing short of revolutionary.
* * *
A graduate of the public schools in his hometown of Medford, Massachusetts, Bloomberg was not an obvious advocate for public education. Both his daughters went to Spence, an elite academy in Manhattan. The children of most of his rich friends had also opted for expensive private institutions rather than the neighborhood school where your kid might be lucky and get a brilliant teacher, but could also get stuck with one who could dampen a child’s curiosity for years to come.
Even so, public schools were at the very top of Bloomberg’s list of city services that needed fixing, and Bloomberg knew that to throw out “the toxic stew of dysfunction,”2 as he once called the system, first he needed control.
The new mayor had inherited a disorderly network of thirty-two elected community school boards overseen by a central board that had strings attached to virtually every local politician. It was an almost-perfect recipe for stagnation, with an average graduation rate of 50.8 percent to prove it. Yet, it had served the political establishment well—if nobody was really in charge, then nobody was ever to blame.
Any major changes—like abolishing disruptive school boards or certainly taking control of the entire system—had to go through Albany, and that had been a problem for mayors who wanted to be in charge, going back to Abe Beame in the 1970s. Bloomberg’s predecessor, Rudy Giuliani, had tried, but the state crowd, many of them tucked comfortably in the pocket of the teachers union, refused and refused, just as state Republicans would make it hard years later for Bloomberg’s pro-union successor, Bill de Blasio, who was at first granted control over schools for only one stingy year at a time.
Bloomberg’s contributions to Republican lawmakers would help in Albany, but for Democrats, he needed support from the teachers. And the teachers needed a new contract. On June 6, 2002, Bloomberg and Randi Weingarten, the head of the teachers union, announced a two-year contract, with overall raises of 16 to 22 percent and the biggest increase in starting salaries.3
A few days later he was in control of the largest public school system in the country.4 The Albany crowd gave him seven years.5 That would nearly get him through two terms, and it was a clear signal from New York’s political veterans that the city’s troubled school system was now Mike Bloomberg’s problem.
Merryl Tisch, an education activist who became the powerful chancellor for the New York State Board of Regents (2009–2016), knew Bloomberg socially. She also knew Albany. “They were personally intrigued by him, and I think kind of mesmerized,” she said later.6 (It certainly did not hurt with a Republican governor and Republicans in control of the state senate that he was considered an easy touch for contributions to their many campaigns.)7, 8
A key player in Bloomberg’s success, Tisch remembered once asking him why he wanted school control so badly. “ ’Cause they wouldn’t give it to Rudy,” he replied, making one of his jokes that often edged very close to reality. Then he added, “The only way I can succeed turning around a complicated enterprise is by having the ultimate responsibility.”9
Bloomberg would exert his power in large and small ways. Once, when a panel of education experts under his control refused to change the way students were promoted from grade to grade, he simply had the dissenters removed and replaced with people who saw things his way.10 Bloomberg was sending a message about his management style, in case it was needed. When the head man spoke, you listened, and if you disagreed and couldn’t convince him of your view, it was time to go.
“This is what mayoral control is all about,” Bloomberg said at the time. “In the olden days, we had a board that was answerable to nobody.” He went on, “Mayoral control means mayoral control, thank you very much.” He added, “They are my representatives, and they are going to vote for things I believe in.”
Any questions?11
* * *
Once the mayor had control, Bloomberg moved to step two—closing the old Board of Education. For seasoned educators there was a standing joke that involved the unwelcome appearance of a school official who said, “Hello, I’m from Central, and I’m here to help.”12 “Central” was the central Board of Education’s office at 110 Livingston Street in Brooklyn, and it was such a dense bureaucratic hive that only an outsider could have dismantled it. One former educator suggested activating the building’s fire alarm and then locking the doors to keep everybody out.13 Shortly after he took office, Bloomberg essentially pushed the alarm button.
The new mayor stunned the education community when he suddenly announced that he planned to move the city’s education bureaucracy from Brooklyn to the nineteenth-century Tweed Courthouse behind city hall. The Tweed had been an embarrassment since Boss William Magear Tweed, the old Tammany Hall boss, had it built with bribes and kickbacks and other schemes that cost the city $13 million in 1878—about $178 million in 2002 dollars.14 Giuliani had helped renovate the building for another $89 million with the idea of using it for the Museum of the City of New York.
A museum? No way, Mike Bloomberg decreed. It would be the headquarters for education, just a short walk from his city hall bull pen. There would be a real, live school in the grandiloquent Tweed fortress, a school that would remind administrators “why they have jobs, what they’re supposed to focus on,” he insisted. “And if every day they see children getting an education, that will remind them when they go upstairs what their mission is.”15
Bloomberg would use the move to great advantage. He would pare forty district superintendents down to ten and eliminate nearly 75 percent of the jobs at the Brooklyn headquarters, essentially ordering an army of former teachers back to the classrooms. Many retired instead.16 The cuts included workers of all levels, from top administrators to ten “window shade repairers.”17
Step three for Mayor Bloomberg was even more important—finding a new chancellor. The task of finding someone to take over the New York City schools had often been so difficult that, as veterans often put it, “nobody who was smart enough to do the job was dumb enough to take it.”18
His staff proposed big names in education, Paul Vallas who ran Chicago schools, chancellors in Cleveland and Atlanta, even Donna Shalala, former U.S. secretary of Health and Human Services.19
Bloomberg was not looking for an educator, as it turned out. He wanted somebody tough enough to execute his radical reforms. When a friend suggested Joel Klein, Bloomberg liked the idea of a supersmart lawyer who would have to be lured away from a very cushy job as chairman of the American operations of Bertelsmann media group.20 Klein was a grasshopper-thin man whose nasal Queens accent had survived Columbia, Harvard, and the Justice Department in Washington, D.C. He was known for outsmarting even Bill Gates in a seminal anti-trust case against Microsoft. Bloomberg liked the idea. Anybody who could take on Microsof
t could take on the city school system. His record as an educator? New York magazine wrote that Klein’s “experience in the education field seems to consist chiefly of—well, of having gone to school.”21
“Jesus Christ wasn’t available,” as Bloomberg told one interviewer after the stunning appointment of Klein. “And I thought Joel was smart and tough as nails for a job that really required that.”22
Shortly after the announcement stunned and horrified New York’s public school establishment, David Yassky, then a city councilman, ran into Bloomberg at city hall. Yassky told the mayor that he had once worked for Klein and that he was one of the ten smartest people he had ever met. Bloomberg grinned, his classic impish grin, and whispered, “And nobody saw it coming.” That jazzed him, Yassky said. “He liked to surprise people and show that something people don’t think is going to work, it works.”23
* * *
Bloomberg approached education reform like a businessman. He wanted a market-based system, where customers (i.e., students and their parents) would be able to choose the best schools possible. What he and Klein envisioned was a kind of educational emporium where students, especially high school students, could pick and choose among public schools. Then, with considerable push from his administration, the worst schools—the failing ones—would wither and die like any business that failed to serve its clientele.
To die-hard supporters of public education and the unions, the term “choice” was conservative code for dismantling much of the public system in favor of private, charter, and parochial schools. Bloomberg insisted his idea of choice was different. He wanted students to choose among public school options, including well-regulated public charter schools. He insisted that he saw “choice” as a way to enhance the public school system, not destroy it.
The Many Lives of Michael Bloomberg Page 18
