Parent Advocates
Search All  
New York City Metropolitan Transit Authority: Why is Service So Bad, and Where's the Money?
The MTA has been fiscally challenged for years, and now President Lawrence Reuter has some explaining to do about accepting $633 in gifts. We need to look at the whole corruption thing at this city agency. by Betsy Combier
The New York City Metropolitan Transit Authority is in a financial mess and many New Yorkers are enraged by this as well as the serious questions of ethical and financial improprieties surrounding the MTA. Basically, the issue is, "Where is the money?"

The latest in the 'no one watches the NYC MTA finances' story is that President Mr. Lawrence Reuter seems to be ethically challenged:

August 27, 2005
Transit Leader to Pay Fine in Ethics Case


The president of New York City Transit, Lawrence G. Reuter, has admitted that he accepted $633 in improper gifts, including golf outings and circus tickets, from companies that do business with the Metropolitan Transportation Authority, the State Ethics Commission announced yesterday.

Mr. Reuter has agreed to pay a $1,200 fine to settle ethics charges filed by the commission.

While the value of the gifts was small, the charges are an embarrassment for Mr. Reuter, who has supervised the city's subways and buses since 1996. He is the highest-ranking official to be implicated in a recent series of investigations that have highlighted close relationships between the authority and its contractors.

Mr. Reuter, 54, is one of the most visible officials at the authority as the leader of its largest subsidiary.

His tenure as president - the longest of any since New York City Transit was created in 1953 - has been generally considered a success. Subway service is far more reliable than a decade ago, scores of stations have been rehabilitated, and ridership is at its highest in decades.

But Mr. Reuter has been seen as less effective in communicating with the public. His efforts to remove conductors from trains and to reassign token-booth clerks to walk around and assist riders have met with resistance. After a fire in January crippled two subway lines for nearly two weeks, Mr. Reuter publicly apologized for having overestimated how long it would take to restore service.

From October 2000 to September 2002, according to the commission, Mr. Reuter accepted a total of five gifts from Atlantic Detroit Diesel-Allison of Lodi, N.J., which sells and repairs engines and transmissions, and from Motor Coach Industries, a manufacturer of coach buses, based in Schaumburg, Ill. The office of the authority's inspector general, Matthew D. Sansverie, uncovered the gifts through an investigation.

The gifts were a golf outing and lunch at the Roxiticus Golf Club in Mendham, N.J., worth $110; a dinner at a Morton's steakhouse in Washington, worth $112; a golf outing at the Wilds Golf Club in Prior Lake, Minn., worth $77; and food from Lawry's The Prime Rib, a restaurant in Las Vegas, worth $154. Mr. Reuter also accepted tickets worth $180 for himself, his wife and his son to a Cirque du Soleil show in Las Vegas. (A sixth gift - another outing at the Roxiticus Golf Club - was worth only $50, less than the $75 threshold for action by the State Ethics Commission.)

Mr. Reuter received the gifts either on his own time or when he was on official business, said Tom Kelly, an authority spokesman. He was in Las Vegas in September 2002 for a meeting of the American Public Transportation Association.

Mr. Reuter signed a settlement with the commission on Aug. 11. He gave complete cooperation and "settled the matter in order to put it to rest and to move on," according to a statement by his private lawyer, Steven M. Polan.

"These activities did not affect in any way, shape or form the business of New York City Transit, but could nevertheless be construed as violations," said Mr. Polan, who was the authority's general counsel from 1984 to 1990. "These incidents all occurred three or more years ago and do not reflect Mr. Reuter's current practice, nor are they consistent with current agency policy."

The authority considers the matter closed and does not plan to punish Mr. Reuter, Mr. Kelly said. "He has cooperated fully with the investigation, and the code of ethical conduct is crystal clear to all of our employees now."

In May, the authority adopted a 44-page code of ethics that established a "zero-tolerance policy" toward employees who receive gifts from companies and individuals conducting business with the authority. State law already forbids officials from receiving gifts that are worth $75 or more from contractors and from engaging in conduct that appears to violate the public's trust.

The adoption of the ethics policy followed a string of alleged ethical lapses. In December 2003, the inspector general found that a former president of the Long Island Rail Road, Kenneth J. Bauer, and five managers had received thousands of dollars in meals and entertainment from contractors. Mr. Bauer, who resigned before the investigation, was not fined or charged.

In January 2005, the commission charged 14 employees of the authority with accepting industry-subsidized meals, gifts and free tickets to galas at the New York Transit Museum in Brooklyn, which is run by the authority.

At least 3 of the 14 officials have left. Lauren M. Gregory, who was the authority's director of risk and insurance management, resigned on March 31 before the Ethics Commission could schedule a hearing, which could have resulted in a fine or a referral for a misdemeanor prosecution. Since then, the Legislature passed a law to close a loophole that allowed state workers to evade some ethics sanctions by quitting their jobs.

Joseph D. Cugini, an assistant manager for station operations at the Long Island Rail Road, agreed to pay a $2,000 fine; he retired on Feb. 1. Joseph N. Siano, who was a senior vice president at M.T.A. Capital Construction, which manages big building projects, agreed to pay a $10,000 fine; he resigned on April 21.

Four other employees paid fines of $1,500 to $2,500 each. Cases against the remaining seven are proceeding.

Megan Quattlebaum, associate director of Common Cause New York, a nonpartisan watchdog group, said the improper gifts seemed to be part of a disturbing pattern. "The ethics code is a positive step, but what is needed at the M.T.A. is an entire culture shift," she said.

Closeup of Lawrence Reuter

...or is he just a scapegoat who needs to be reminded of who is in control?

Who is in control?

The MTA seems to never have enough money, as Mr. Reuter states in his testimony to the NYC Council in 2001. He believes that the MTA needs to close subway token booths or reduce hours of operation.

Straphangers Campaign Testimony

Newsday Editorial on Token Booth Closings

The MTA has not been open about it's finances, but we do know that in 2006 New york City will get 660 new cars in the subway from ALSTROM:

ALSTROM reported in the Annual Reports the following:

1. a 2001/2002 deal with New York City Transit for 330 metro cars (p.15);

2. a 2002/2003 deal for 660 metro cars for New York City (p. 24); the Chaiman and CEO positions changed hands from Mr. Pierre Bilger to M. Patrick Kron; and on p. 43 of the 2003 Annual Report there was mention of possible "accounting improprieties on a railcar contract being executed at the Hornell, New York facility of ALSTROM Transportation Inc., (ATI), a US subsidiary of the Group." p.43-44. The new address of ALSTOM in Hornell is: 1 Horton Street, Hornell, NY 14843, (607) 324-4595; (607) 324-4521; (607) 324-4571

3. under Transport in the 2003/2004 Annual Report we found AMTRAK, p. 20, but no mention of the
330-660 metro cars for New York City.

July 31 2002


MTA NYC Transit has awarded a nearly $1 billion contract to railcar builder Alstom Transportation Inc. for the production of 660 new state-of-the-art subway cars, it was announced today by Metropolitan Transportation Authority Chairman Peter S. Kalikow and MTA New York City Transit President Lawrence G. Reuter.

The contract contains two options for up to an additional 1,040 cars. In order to attain operational compatibility with the R143 cars, Alstom and Kawasaki Rail Car, Inc., the manufacturer of the R143, have agreed to form a contractual relationship to produce the R160 cars under this contract.

MTA Chairman Peter S. Kalikow said, "I am delighted that we are today announcing what will be the largest subway car purchase in New York City Transit's history. And this unique agreement between Alstom and Kawasaki ensures that we will getting the best technology for the best price."

The $961,687,121 contract will be funded by the Federal Transit Administration. The contract includes an option for 620 additional cars and a second option for 380 to 420 cars. Funding for the options is planned for the next MTA Five-Year Capital Plan.

"These are truly the next generation of subway cars" said MTA NYC President Lawrence G. Reuter. "The new R160 fleet will allow us to not only update the B Division, or lettered lines, but give us the opportunity to provide our customers with a far more customer-friendly environment, using state of the art technology."

The base order of 660 cars will replace equipment in service since at least 1964, including R40, R42, R38 and R32 car classes. These cars are currently running on the A, C, E, J/Z, L, M, N and Q lines. Alstom will assemble the new R160 cars at its manufacturing plant in Hornell, New York. Kawasaki will assemble the R160 cars at its plant in Yonkers, New York.

Michel Moreau, President of Alstom's Transport Sector, said, "We are pleased to have won this competitive tender, where our advanced technology and efficient manufacturing capability were key success factors. Five years ago we made a significant investment in a facility in upstate New York. Today the nearly 1500 Alstom employees in New York State look forward to supplying these new trains to MTA New York City Transit and the to subway riders of New York City."

Yuichi Yamamoto, President of Kawasaki Rail Car, said, "As a company that has proven itself by providing subways cars to the most demanding subway system in the world, we are proud to be part of the mass transportation solution. Here and in other cities, we demonstrated what merit, work ethic, and performance can accomplish."

The stainless-steel R160 cars will be configured in five-car units, and equipped with several hi-tech customer amenities, including state-of-the art air-conditioning systems. Like the R142/142A and R143 cars currently in service, the R160s will have bench-style seating with lumbar supports, electronic strip maps and signs that display route and station information, final destination, next stop, and time of day.

Additional features include lighted arrows indicating which side the doors will open and a Passenger Emergency Intercom to allow passengers to communicate with the train operator or conductor in the event of a passenger emergency. The cars also have increased soundproofing and an air bag suspension for a quieter, smoother ride.

The base order of 660 R160 cars is scheduled to arrive beginning in 2006.

The American contact for ALSTROM is listed as AREVA T&D, Inc

NY State Comptroller Alan Hevesi says that the "fare hike (is) a sham" in the Daily News, April 24, 2003

Hevesi: Turnstile Politics

New York City Transit posted the following:

An article that was sent in by one of my readers who suggested that I link it to my site.

I have been asking for the past 10 years for somebody to investigate the shenanigans of the MTA, The Governor and the Office of The MTA Inspector General. Past experience has taught me that when I complain to the MTA Inspector Generals office about a managerial infraction it will inevitably result in a promotion for the manager. Apparently, there is no longer a fine line between The New York City and State politicians and the corruption of the MTA. They are obviously one and the same. The MTA has become a cash cow for the politicians of New York. We, the people of New York pay for this ongoing system of bribery, corruption and white collar criminal activity every day of our lives. The worst part of it all is the consequences that it has on the very legal system that we should be able to count on to protect us. That's right, it now reaches into the judges chambers and effects the decisions that to a very large extent effect every aspect of our lives. We see it everywhere, anyplace a crooked politician has his hand out there is always a business interest willing to put something in it. Whether it be the utilities, the health insurance, the auto insurance, the gas tax, labor contracts, workers compensation, pension rights, clean drinking water, environmental security, or the MTA; our representatives have sold us down the river to the big business interests. The only thing that comes as a result of complaining about it is the most insidious, severe type of retaliation that only a well connected group of politicians (state and city government) has the power to impose. The purpose of this web site is to help perpetuate those complaints, few as they may be, in order to help remove the thugs (politicians) that are the target of those complaints.

MTA inspector general suggests Silverite probe hampered
by LIAM PLEVEN, NEWSDAY, Albany Bureau Chief

Albany -- The outgoing inspector general of the Metropolitan Transportation Authority wrote a letter to the agency on his last day saying he was not given full access to information about a lucrative contract he was probing that the agency had awarded to one of Gov. George Pataki's major campaign contributors.

Asked about the letter, MTA officials said yesterday they had asserted attorney-client privilege about material the inspector general sought, and a retired federal judge mediated the dispute in their favor. "The inspector general had access to everything that he was entitled to," MTA spokesman Tom Kelly said.

The inspector general, Roland Malan, wrote to MTA Chairman Virgil Conway on his final day in office, Oct. 20, that a lack of cooperation had hampered his investigation and forced him to close his probe into a $97-million contract to refurbish the Queens Midtown Tunnel. Silverite Construction won the contract in 1997 from the MTA, which is controlled by Pataki appointees. Malan's letter also referred to three unrelated investigations.

"This action is taken because the investigations were impaired by qualification, restriction or outright denial of access to case related information necessary to complete the investigations, Malan wrote in the letter, a copy of which was obtained by Newsday. Malan added, "... Although we used every approach available to mitigate this problem short of litigation, we were unable to obtain the information we needed.

As a result, Malan wrote, "Professional standards require, that in circumstances such as this I notify executive management to seek relief, and if that is not forthcoming, decline to perform the work.' Accordingly, I am declining' to finish these cases because the conditions necessary for professional completion of the work were not met.

The inspector general is a quasi-independent position intended to oversee the MTA.

After speaking with Conway yesterday, Kelly said, "This is nothing more than sour grapes. The inspector general had access to everything that he was entitled to. At one point, there was a question about attorney-client privilege. He suggested that it be decided by a mediator, and a retired federal judge ... heard the issue and ruled on our behalf." Kelly said he did not know the judge's name.

Kelly also said he did not know what the material in question contained. Attorney-client privilege covers communications between lawyers and their clients in business or personal situations, and waiving it in one case could have implications for other situations, if others seek the same material.

Reached at his home, Malan said, "That letter was required by my profession. I think it's self-explanatory.He would not discuss what type of information he had been seeking, and he declined to comment on the MTA's statement.

The letter and the MTA's response focus new attention on the Silverite case, which has been in the public eye since 1998. Federal prosecutors opened an investigation into the tunnel contract and whether it was connected to more than $200,000 in campaign contributions that Angelo Silveri, a Silverite executive, and his associates and related firms gave Pataki and the state Republican Party between 1994 and 1998. Officials with the U.S. Attorney's Office in the Eastern District declined to discuss the status of that case yesterday.

Pataki aides have vehemently denied playing any role in the contract award, and aides have dismissed inquiries about the case as politically motivated. Yesterday, they referred questions about the letter to the MTA.

Calls to Silveri were returned by Anthony Lombardino, an attorney who is representing the firm. Lombardino said he was not familiar with the letter but said of the contract, "There's absolutely no wrongdoing whatsoever."

Pataki, who selected Malan for the inspector general's job in 1995, declined to reappoint him at the end of his five-year term, said Michael McKeon, a Pataki spokesman.

In addition to Conway, copies of Malan's letter were sent to Pataki and two top aides; Mark Shaw, executive director of the MTA; the MTA board; the inspector general's advisory board; and the majority leader and minority leader of the state Senate, which must approve Pataki's MTA appointments.

Malan's acting replacement is Matthew Sansverie, a former prosecutor in the office of Nassau District Attorney Denis Dillon and a one-time aide to former state Attorney General Dennis Vacco, a Pataki ally. McKeon said Pataki intends to nominate Sansverie to the job.

In the letter, Malan identified the other three investigations as having to do with Long Island Bus, which receives MTA funds, Keystone Construction and a parking garage in Manhattan. Malan provided no additional information about any of the probes in his letter. Both the president of the bus agency and a woman who answered the phone at Keystone declined to comment.

Staff writers Robert Kessler and Jordan Rau contributed to this story.

Article received on Friday, November 03 2000 at 06:32 EST

There is always corruption:

The December 16, 2003 racketeering indictment by NY County District Attorney Robert Morganthau of the MTA's former Director of Facility Operations, Howard Weissman, its former Facilities Manager Ronald Allan, and the current MTA building manager, Gary Weissbard shows what happens when no one is looking.

The NYC MTA Spent $15.1 Million Last Year on Police Overtime; Will Vote on Raising Fares

Lest we forget, after the Staten Island Ferry accident that killed 11 passengers, no one ever held Iris Weinshall accountable.

Staten Island Ferry Official Covered Up Negligence, and Mayor Bloomberg Will Have the Public Support Him

and let's not forget that Stephan Rachow Kaye is Judith Kaye's husband. She is the Chief Judge of New York State, and he is a partner at Proskauer Rose, the firm that won the New York Supreme Court Appellate Division decision to permit the MTA to raise fares and keep the finances out of the public eye.

Metropolitan Transit Authority Homepage

Fighting the Fare Hike

© 2003 The E-Accountability Foundation