This article originally appeared in the New York Times on May 17, 2019.

A vulnerability to payroll abuse at the Metropolitan Transportation Authority is coming under the scrutiny of federal prosecutors in Manhattan after revelations that some employees were able to claim staggering amounts of overtime last year.

One worker at the Long Island Rail Road, asserting that he logged about 74 hours of overtime every week atop his regular duty, was paid $461,646 last year — more than the combined salaries of Gov. Andrew M. Cuomo and Mayor Bill de Blasio.

Federal prosecutors have subpoenaed pay records for that worker, Thomas Caputo, and more than a dozen other employees at the Long Island Rail Road and New York City Transit, according to three people with direct knowledge of the investigation. The three who spoke with The New York Times this week declined to be identified because they were not authorized to discuss it publicly.

Beyond those individuals, prosecutors plan to review the 19th-century timekeeping practices used in some departments of the Long Island Rail Road: handwritten records submitted by employees.

Modern machines, better able to detect fraud, were installed but not used because, managers said, they feared pushback by employees. Some areas of New York City Transit, which oversees subways and buses, use timecards with mechanical punch-clocks, technology that dates to the early 20th century.

The inquiry is being led by prosecutors in the public corruption unit of the United States Attorney’s office for the Southern District of New York. The Queens District Attorney’s office has also started a separate investigation along with the authority’s inspector general, which looks into wrongdoing at the agency.

Mr. Caputo, who recently retired as a senior track worker after three decades with the railroad, did not respond to requests for comment.

James M. Margolin, a spokesman for the U.S. attorney’s office, declined to comment. John Samuelsen, the international president of the Transport Workers Union, which represents city subway and bus workers, said he was unaware of a criminal investigation.

“There is no evidence of systematic abuse or criminality or fraud at New York City Transit,” Mr. Samuelsen said. “This is putting the cart before the horse.”

Anthony Simon, the general chairman of a major union that represents many Long Island Railroad workers, did not respond to requests for comment and the governor’s office and a spokesman for the transportation authority declined to speak about the investigation.

The individual cases of huge overtime payments for Mr. Caputo and others — first revealed to the public last month in an annual report from the Empire Center for Public Policy, a fiscal research group — have highlighted failures by the authority to modernize the timekeeping systems for its 70,000 employees.

Officials at the authority say many Long Island Rail Road workers are paid based on handwritten documents they submit listing the number of hours claimed, with little to no review before payment.

Employees of the railroad are, by far, the highest paid of any workers at the region’s transit agencies; 19 people whose pay rate was around $50 an hour or lessmade $300,000 or more with overtime in 2018.

Mr. Cuomo, who controls the authority, and one of his representatives on the authority’s board have said that the overtime hours suggest fraud, sparking an angry standoff with union leaders who said employees had been invited or pushed to work long hours so the system could be fixed.

Five years ago, the Long Island Rail Road installed about 120 biometric clocks, which would require employees to sign in with their thumbprints at the start and end of shifts.

Despite this, the paper timekeeping system remains in use for union workers in the department that maintains tracks, signals, buildings and bridges.

Management feared that insisting on the use of the automated clocks would have “an adverse impact on employee productivity,” according to an internal memo by the transit agency’s inspector general, which was described to The Times.

Maintainers at the railroad have the lowest productivity among maintainers at the five biggest commuter rail lines in the country, according to a report published in April by the Citizens Budget Commission.

Last week, transportation authority officials presented plans for the installation and use of biometric clocks for all employees on the Long Island Rail Road and the other commuter railroad the agency oversees, Metro North, within 90 days. The subway and bus systems, which still use time clocks with cards at many locations, would change in six months.

Overtime has become a pressing issue for the authority as its payroll costs have been rising faster than the fares and tolls that support them. Officials say the agency is facing a $1 billion deficit by 2022 and they are considering layoffs and other measures to reduce costs.

Not surprisingly, overtime soared as leaders scrambled in recent years to catch up with basic maintenance that had been ignored or deferred and led to poor service. Both management and union officials say that most of the higher bills resulted not from fraud, but from an urgent need for more work.

Union workers on Long Island also enjoy generous overtime provisions, some of them a century old, under contracts agreed to by their 10 unions with the authority and its predecessors. Though reform of the work rules on the railroad was a leading goal of the M.T.A. in its most recent round of contract negotiations, none of them were changed under the resulting agreements. They were signed in 2014 after intervention from Mr. Cuomo, who was then running for a second term as governor.

The Long Island Rail Road was embroiled in scandal more than a decade ago, when an investigation by The New York Times found that nearly every career employee who retired received a disability pension, though many continued to enjoy vigorous, active lives.

A total of 33 people — railroad workers, doctors, and a union official — pleaded guilty to federal fraud charges.

An emergency M.T.A. board meeting last Friday to discuss overtime turned into a series of brawling arguments between union representatives and Lawrence Schwartz, an ally of the governor on the board.

Union leaders blamed management for assigning the overtime and even raised the prospect of a subway strike, something not seen in New York City since 2005.

The authority has started contract negotiations with its largest union, Transport Workers Union Local 100, which represents the city’s subway and bus workers.

While its leaders have been close to Mr. Cuomo and contributed more than $275,000 to his political campaigns, they face internal political challenges from insurgents critical of their relationship with the governor.

Mr. Samuelsen, the union leader who is also a transportation authority board member, has recently taken a decidedly harsher tone with the governor, expressing outrage over Mr. Cuomo’s comments on overtime fraud and comparing him to President Trump.

© 2019 The New York Times


You may also like

Faced with $10B deficit, MTA says it’s eyeing cutting overtime spending

Alfonso Castillo The financial impact of the COVID-19 pandemic on the Metropolitan Transportation Authority is adding urgency to the agency’s efforts to curtail overtime numbers that critics say remain alarmingly high. The MTA said at Wed Read More

Comptroller warns of financial distress at the MTA, and the MTA goes on a hiring spree

According to Ken Girardin, a labor analyst at the right-leaning Empire Center for Public Policy, every new police officer will cost the MTA roughly $56,000, which means the new personnel would initially cost the MTA roughly $28 million a year. Those costs should rapidly increase over time, as police salaries rapidly increase. Read More

LIRR union chief blames OT on inadequate staffing levels, increased workload

“That’s one heck of an incentive,” said E.J. McMahon, research director for the Empire Center for Public Policy, the organization that publicized the MTA’s alarmingly high overtime rate in an April MTA payroll report. Read More

MTA, LIRR union relationship worse than ever; up next is collective bargaining

The MTA’s heightened focus on overtime follows an April financial report from the Empire Center for Public Policy that revealed alarmingly high overtime rates among some MTA employees, including former LIRR chief measurement officer Thomas Caputo, who made $344,147 in overtime on top of his base salary of $117,499. Read More

EDITORIAL: The MTA’s culture of fraud

Raymond Murphy, a foreman with the LIRR’s Buildings and Bridges department, was one of the MTA’s top earners in 2017, pulling in $405,021, including $295,490 in OT, according to data compiled by the government watchdog Empire Center. Read More

MTA worker on family and medical leave got married, coached baseball instead: watchdog

DeLeon — who began at the MTA in 2007 and earned $44,754, according to the Empire Center — was fired by the agency. But he still kept his pension, according to sources close to the investigation. Read More

Top MTA cop busted blowing off work, using cruiser for suspected funeral gig: report

The cop — who earned $240,926 that year, according to the Empire Center — was then busted using his cruiser to make 14 visits in eight weeks to funeral homes on Staten Island, where investigators suspected he was moonlighting. Read More

LIRR overtime ‘cheat’ hung out at home on the clock, retired with full pension anyway

Murphy was one of the top earners in the whole MTA in 2017 — making a jaw-dropping $405,021, with $295,490 coming from overtime, according to data from government watchdog group the Empire Center. Read More