The Department of Education, meant to be one of the defining triumphs of Michael Bloomberg's mayoral career, has become a "fiscal black hole" with a serious consultant problem to the tune of $982 million, according to Manhattan Borough President Scott Stringer. That title comes after yet another consultant-related financial scandal came out of the department. Turns out the former Chief Financial Officer of the DOE, George Raab, and several consultants used their time their to plot Raab's exit to a private financial firm, according to a report [PDF] from Richard J. Condon, the special commissioner of investigation for the city schools.
According to Condon (who has been on a scandal busting roll this year) Raab—who joined the DOE with a salary of $196,000 in October 2008 from the late Bear Stearns—used his position and choice of consultants to assist him in planning a department at Guggenheim Securities, where Raab ended up just 11 months after starting at the Department. Raab and four consultants from the late Stearns allegedly used DOE e-mail systems and resources to make plans for Guggenheim—and then charged the department for their time.
The ever-vigilant DOE only started to notice something fishy after the Bear gang was gone, but once they did they immediately reported it to the special investigator, they swear. But since no actual crime was committed by the group and since none of them still work for the city, Condon has recommended banning them from further work for the DOE and the DOE seems to agree.
But maybe it should just stop with the consultants all together? In the light of this latest development, Stringer has been on a press rampage regarding the massive amounts of cash the city is spending on education consultants while threatening to fire teachers. According to Stringer the DOE's spending on outside consultants soared 455% from 2004 to 2012, rising from $177 million to $982.3 million.
For an example of what exactly these consultants are doing, look no further than William Howatt, one of the consultants hired by Raab and implicated in Condon's investigation. For less than a year's work Howatt received $374,000 to help the DOE's mid-level managers by "improving their ability to adapt to change." Which we're totally sure he did...from his home in Nova Scotia where he billed the majority of his hours from. Jeez, where can we get one of these consulting gigs!