The Department of Sanitation under then-Commissioner Kathryn Garcia awarded a $14 million, emergency contract to a construction company owned by a convicted tax cheat — because it didn’t bother to run a Google search, according to a blistering audit obtained by The Post.
Garcia — now a top-tier Democratic candidate for mayor — was also in charge when the DSNY terminated the no-bid deal with Cariati Developers Inc. of Wallingford, Conn., to deliver food amid the COVID-19 pandemic after just three weeks, the audit says.
The contract was canceled because CDI was repeatedly late making deliveries and dropped off meals in crushed boxes that rendered them “unusable” — and also because officials had belatedly learned of owner Donald Cariati Jr.’s conviction, according to a 27-page report prepared by outgoing Comptroller Scott Stringer, who is also a Democratic mayoral candidate.
Stringer’s audit says that the DSNY “did not adequately follow the City’s procurement guidance and displayed insufficient due diligence” before awarding the three-month contract to CDI on April 2, 2020, to deliver between 5,000 and 10,000 boxes at a rate of $29.35 each.
More than a month earlier, on Feb. 28, 2020, the Connecticut US Attorney’s Office posted an online news release announcing that Cariati had waived indictment and pleaded guilty in New Haven to obstructing the IRS.
Cariati admitted paying employees as independent contractors, subcontractors and “off the books” to avoid paying as much as $1.5 million in withholding taxes between 2013 and 2017, and also tried to cover up the scam with phony invoices, officials said.
Cariati, 45, was later sentenced to one year and one day in prison and ordered to pay nearly $1.1 million in restitution and a $95,000 fine.
The fact that CDI got the contract despite its owner’s conviction was first reported last year by the Wall Street Journal.
Garcia campaign spokeswoman Annika Reno said, “If this audit reveals anything it’s that Comptroller Stringer is dead-set on using his taxpayer-funded office to launch a smear campaign against a leading candidate beating him in the polls.”
“At the height of the pandemic, Kathryn Garcia as Sanitation Commissioner took on the unprecedented job of ensuring no New Yorker went hungry in the middle of a deadly pandemic,” Reno added.
“Where was the Comptroller during that time? At home, drafting reports and pointing fingers. We’ll leave it to New Yorkers to make up their own minds as to who has a real track record of delivering.”
The Post obtained a copy of the audit on Sunday, two days after a second woman accused Stringer of groping her.
Stringer, who adamantly denied the initial allegations against him in April, on Friday instead said he didn’t remember Teresa Logan and apologized “if I ever did anything to make her uncomfortable” when she worked at a bar he co-owned in the early 1990s.
On Saturday, the women’s group UltraViolet called on Stringer to quit his campaign “and commit to addressing the harm he has caused.”
Stringer’s audit also notes that DSNY awarded the CDI contract despite not having “any evidence that the vendor had prior food sourcing, packaging and/or delivery experience, even though the bid booklet called for…at least three years of such experience in the preceding five years.”
CDI was paid more than $1.4 million for its three weeks of work, including a “double payment of $15,644 for the same five deliveries,” which the DSNY didn’t detect because it “did not have a tracking system in place,” according to the audit.
There’s no evidence that CDI was paid for any undelivered or damaged food, the audit says.
Stringer’s report makes seven recommendations, including “routinely” adding a Google search when reviewing potential vendors, requiring potential vendors to disclose the criminal histories of their owners and recouping the $15,644 double payment from CDI.
In a statement Sunday, DSNY spokesman Joshua Goodman said, “We dispute the audit’s conclusions, and had implemented many of its recommendations before the audit was drafted.”
“Our contract with this firm adhered to and exceeded all City procurement guidance for emergency procurements,” he said.
Goodman added: “Last year, when New York City was hit with an unprecedented crisis, DSNY was tasked with immediately soliciting and managing contracts to get food to starving New Yorkers – work of which we are extremely proud. By late May, we were delivering over one million meals per day.”
In responses included in the audit, the DSNY said that it was seeking to recover the double payment and that it consulted “five separate databases (two more than recommended) as part of its background check” of CDI.
The DSNY also noted that it began seeking bids for the food-delivery program less than a week after Garcia was named “COVID-19 food czar” by Mayor Bill de Blasio on March 21, 2020.
Additional reporting by Sam Raskin