A top adviser to Mayor Eric Adams under federal investigation delayed for months a multimillion-dollar contract to provide caseworkers at migrant shelters, an investigation by THE CITY has found — hampering urgent efforts to help asylum-seekers get work papers and exit the shelter system as their numbers in the city skyrocketed.
Without explaining his motives, Tim Pearson, a senior advisor to Adams assigned by the mayor to monitor asylum-seeker shelter contracts, held up the contract with Cherokee Nation Management & Consulting LLC in early 2023, even after it had already been approved by the agency in charge of the effort, the city Health & Hospitals Corporation.
Pearson was among the top Adams administration officials who were the subjects of federal law enforcement search warrants earlier this month. His involvement in awarding contracts related to the migrant crisis appears to be one focus of Manhattan U.S. Attorney Damian Williams investigations into possible City Hall corruption.
On Friday, Molly Schaeffer, the city official in charge of asylum-seeker operations, received a subpoena from federal authorities. Starting in the fall of 2022 and continuing into late 2023, Pearson met with Schaeffer almost daily. According to his schedules, those meetings list “asylum seeker update” and “contracts” as the subjects for discussion.
Schaeffer declined to comment to THE CITY on Friday, referring questions to Fabien Levy, deputy mayor for communications. Levy declined to address THE CITY’s questions about the federal inquiry.
In the Sept. 4 raids that hit Pearson, federal agents also seized electronic devices used by Police Commissioner Edward Caban, who resigned the following week, Deputy Mayor for Public Safety Phil Banks, and First Deputy Mayor Sheena Wright and her partner, schools chancellor David Banks.
Investigators also seized the phones of Terence Banks, brother to Phil and David, and an employee of Florida-based tech firm Saferwatch — suggesting the probe goes beyond just contracts related to the migrant crisis. As reported by THE CITY, Saferwatch lobbied both Phil and David Banks for a contract to install “panic button” apps in New York City public schools. Around the same time, the firm also hired a government relations firm run by Terence.
Pearson, a former NYPD inspector and close Adams associate for decades, is also the subject of four lawsuits accusing him of sexual harassment and retaliation by co-workers. In one suit, his co-workers quote him allegedly discussing his apparent desire to personally benefit from his work overseeing shelter contracts. “I have to get mine. Where are my crumbs?” he allegedly said.
The Health and Hospitals Corporation, which administers thousands of beds in city migrant shelters, is a public benefit authority run by an independent board, not a city agency. Pearson is on the payroll of another public authority, the Economic Development Corporation.
Yet Pearson wound up delaying Cherokee’s Jan. 1, 2023, start date by three months without explanation — putting off meetings, not responding to HHC’s communications about the contract, at a time of increasingly desperate need for the case management services, particularly help with work authorization papers, travel and housing to enable people to leave the shelter system.
In the three months Pearson delayed the contract, the number of migrants staying in Health and Hospitals-run shelters doubled, from 4,655 to 9,309. I would more than double again to 24,000 by the end of 2023.
On Thursday, city Comptroller Brad Lander, whose office is required to examine and sign off on all contracts with city agencies, noted that because Health and Hospitals is not a city agency, his office has no oversight of the contracts it hands out.
Lander, who recently announced he’s running for mayor, said that ferreting out fraud, potential conflicts and meddling by City Hall is particularly difficult with contracts signed by Health and Hospitals.
“Because we don’t see HHC procurement, I think what we typically ask if you don’t use competitive bidding, is, ‘How did you learn about this contractor?’ We don’t get the HHC contracts so we don’t get the opportunity to ask that question and get answers to it.”
Asked how he felt about having Pearson meddling in contracts awarded by an agency that is subject to little oversight, Lander responded, “I don’t like it at all.”
Lander described the interference as just one piece of a bigger crisis in city contracting under Adams.
“What’s going on right now is a scandal. It’s a crisis to have people believe that what’s substantially going on in our procurement system — whether it’s at HHC, whether it’s at the Department of Education or at the Police Department — is that favored contractors, sometimes who have family relationships, get sweetheart treatment in awarding contracts.”
Pearson Demanded Meeting With Cherokee
On Dec. 14, 2022, HHC’s board approved a contract to hire five providers, including Cherokee, to handle case management in Humanitarian Emergency Response and Relief Centers (HERRCs). All were scheduled to start work Jan. 1, 2023.
The chosen contractors approved by HHC’s board included three new providers, Cherokee Nation, International Rescue LLC and Horne LLP, and two firms that were already running shelters, Medrite LLC and Rapid Reliable Testing, otherwise known as DocGo. International Rescue and Horne later dropped out, leaving Cherokee, Medrite and DocGo to split up a retainer agreement with a not-to-exceed amount of $176 million.
DocGo had been running shelters under a contract with an actual city agency, the Department of Housing Preservation and Development (HPD), but Lander had refused to register it, questioning the medical company’s qualifications to provide social services. The comptroller also cited disturbing reports about DocGo deceiving migrants and hindering police investigations into assault allegations at its shelters.
An audit of DocGo’s contract with HPD released in August by Lander concluded that the department had failed to conduct basic oversight of the $432 million contract, including paying hundreds of thousands of taxpayer dollars to the company for rooms the city never used. Lander, however, lacks the authority to conduct a similar audit of contracts with Health and Hospitals, including those signed with DocGo.
Soon after Cherokee Nation Management’s contract had been approved by Health and Hospital’s board, the Tulsa, Oklahoma-based for-profit company, run by the Cherokee Nation tribe, learned that the deal was on hold for reasons that were not made clear.
According to a former government official with knowledge of the matter, Cherokee Nation Management soon learned from Health and Hospitals that “City Hall” was holding things up for unspecified reasons. Then it became clear that “City Hall” was actually Tim Pearson, the source said.
Pearson was delaying meetings and not finding the time to actually have conversations with HHC about the contract, according to the source. Every time HHC approached Pearson, he said he wouldn’t approve the contract until Cherokee met with him, according to the source.
What was evident, according to the source, was that Pearson was asking all sorts of questions that were out of line. Health and Hospitals’ contract with Cherokee Nation Management finally moved forward after Pearson backed off in mid-March, 2023.
Asked about Pearson’s interference, a spokesperson for Cherokee Nation Management referred THE CITY to Health and Hospitals, which in turn referred THE CITY to the Mayor’s Office.
Mayoral spokesperson Liz Garcia said, “Every HERRC contract is reviewed by staff, including the one with Cherokee Nation. Our intensive case management continues to allow us to provide new arrivals with the services they need, and thanks to these resources, to date, we have helped over 150,000 migrants take the next step on their journey toward the American Dream.”
Last week Adams again defended Pearson, explaining that he assigned the former NYPD inspector, who has no prior experience in procurement, because “Tim brought something to the dynamic that I knew we had to think outside the box to resolve this issue. And we saved hundreds of millions of dollars because of his partnership.”
