Investigation of the Waterfront Commission of New York Harbor

Recommendations

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The Commission reported to the Inspector General that “separate bank accountshave been set up for forfeiture funds which will be audited and reconciled on a timelybasis. The Comptroller has received training on the CFR sections pertaining to thehandling of federal forfeiture funds.”The Waterfront Commission Improperly Expended Federal Homeland SecurityGrant MoneyThe Inspector General found that the Waterfront Commission misused funds fromtwo federal grants intended to improve port security. A boat purchased with federalfunds was used sparingly and did little to enhance port security. A second grant devotedto technological improvements was poorly implemented, and the equipment purchasedwas not utilized as reported to the federal government. Moreover, the Commission didnot separately account for grant expenditures, and did not meet requirements tocontribute its own funds to the grant projects.The Waterfront Commission received two federal grants from the Department ofHomeland Security (Homeland Security) to enhance port security. The first grant, “DTSA20-03-G-01085,” entitled “Project Safe Port” was awarded in the amount of $619,294for the period between May 1, 2003, and April 30, 2004. The objective was to usecomputers and wireless communications to allow Commission detectives to accessremotely its photo identification, licensing, and registration databases to help combatterrorism. The original budget listed personnel costs of over $550,000, with the restallocated for equipment, travel, contractual services and other costs. The WaterfrontCommission was required to provide $1,010,540 of its own funds (non-federal share) tomeet the project objectives. Homeland Security later approved a time extension to July15, 2004, and a modification which allowed the Commission to use most of the funds topurchase equipment and software instead of paying for personnel costs.In response to the Inspector General’s request for financial records concerning thegrants, the Waterfront Commission provided a number of schedules, copies of canceledchecks and supporting documents. The schedules were created to show how theCommission accounted for the grant funds. However, there was no indication ofseparate, historical information such as ledgers or journals to show how it accounted forthe grant funds at the time they were expended. The examination of those recordssuggested that the Commission did not maintain proper records for the grant funds at thetime they were expended.The review of the schedules showed that the Waterfront Commission expendedall grant funds, $619,294, to purchase equipment and software and also expended$1,150,001 of its funds in personnel costs as the non-federal share of the project. Thatamount included $814,601.62 in regular time, $123,791.69 in overtime and $211,607.69in fringe benefits. According to Wolf, the non-federal share represented payments toemployees that were involved only in port security. Wolf added that the schedulesshould not include personnel who were assigned to task forces or other investigations.However, the Inspector General determined that the schedules listed at least twodetectives that were on federal assignments but whose compensation was included in the53
non-federal share of expense, and that the information submitted to the federalgovernment was inaccurate.In addition, the review determined that the Waterfront Commission submittedend-of-grant reports to the federal government indicating that all the funds had beenexpended in accordance with the terms and conditions of the grant and that the programwas fully operational including the communication system. However, interviews withpolice division supervisors and other Waterfront Commission employees revealed that, asof the end of 2008, the system was not operational. Laptops that were purchased withgrant funds to give police access to databases were not installed in the police cars andwere never used for their intended purpose. There was little or no use of other wirelesscommunications proposed in the grant due to inaccessibility or lack of proper training.The report to the federal government was submitted electronically and Wolf waslisted as the contact person. Wolf claimed that he did not recall submitting the reports andmight have only reviewed it with one of the Waterfront Commission’s auditors.The Inspector General has notified Homeland Security concerning the abovementionedirregularities.The second grant, “2005-GB-T5-0111,” entitled “Port Security” was awarded inthe amount of $170,487 for the period between September 1, 2005 and February 28,2008. This grant was awarded for the purchase of a patrol boat for use in New YorkHarbor. According to Waterfront Commission records, the boat was purchased fromBoston Whaler on October 11, 2006 for $170,487. In its proposal to Homeland Security,the Waterfront Commission indicated that the boat:would be capable of early detection of a waterborne attack and wouldbe specially equipped to react and coordinate a response to a threatwith the faster, more heavily armed DHS US Coast Guard patrolvessel.that it:Waterfront Commission also represented in its proposal to Homeland Securitywould deploy officers on the vessel at high risk target locations suchas the NYC Passenger Ship Terminal, Cape Liberty Cruise Port inBayonne, and the various intermodal terminals throughout the port todetect and deter an attack by a small craft with an IED or underwaterattack on a passenger or cargo vessel.The Waterfront Commission further represented in the proposal that itscontribution to this project would be the cost of salary and benefits for two additionalofficers as well as recurring operational and maintenance cost for the boat. TheWaterfront Commission’s records reveal that two budget lines indeed were assigned tothe operation of the boat. However, the Inspector General was unable to obtain recordsof the operational and maintenance costs for the boat.54
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State of New YorkOffice of the Insp
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STAFF FOR THIS INVESTIGATION AND RE
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Personal Use of Waterfront Commissi
Page 7 and 8: mandated core responsibilities. 2 T
Page 9 and 10: enforcement officer, he was hired a
Page 11 and 12: II. BACKGROUNDHistoryIn the early 1
Page 13 and 14: Commission regulates the employment
Page 15 and 16: There was virtually no communicatio
Page 17 and 18: and, therefore, the Waterfront Comm
Page 19 and 20: did identify individual instances o
Page 21 and 22: Maria that he “should have been m
Page 23 and 24: Q.: Why did it change?Deutsch: Beca
Page 25 and 26: all the things that has gone on wit
Page 27 and 28: Police Division. That testimony not
Page 29 and 30: had been completed within the curre
Page 31 and 32: epercussions of his felony convicti
Page 33 and 34: Michael DeCotiis testified to the I
Page 35 and 36: offending companies, although Kelly
Page 37 and 38: Web sites were blocked by software
Page 39 and 40: At all of the police academies, the
Page 41 and 42: epresenting the Waterfront Commissi
Page 43 and 44: training facility has been created
Page 45 and 46: Madonna’s other recommended candi
Page 47 and 48: Madonna denied providing the exam t
Page 49 and 50: which car they would drive, they ne
Page 51 and 52: F. ABUSE OF PUBLIC RESOURCESPersona
Page 53 and 54: A Waterfront Commission Vehicle Was
Page 55 and 56: Wolf also attempted to disclaim res
Page 57: determining the outstanding forfeit
Page 61 and 62: comptroller received this informati
Page 63 and 64: Commissioner Madonna compelled the
Page 65 and 66: Fiscal Management• The Commission
Page 67: JON S. CORZINEState GovernorOFFICE
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Investigation of the Waterfront Commission of New York Harbor

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