Firm behind Brooklyn ballot snafu benefited from sweetheart deals, records show

This story was originally published on Oct. 8 by THE CITY. Sign up here to get the latest stories from THE CITY delivered to you each morning.

The $4.6 million deal handed to the upstate firm that bungled the Brooklyn presidential election absentee ballot rollout wasn’t the outfit’s first no-bid contract, THE CITY has learned.

The city Board of Elections hired Phoenix Graphics despite a state examination that found prior no-bid work notched by the same company wasted millions of taxpayer dollars, records show.

THE CITY delved into Phoenix’s past as Mayor de Blasio said Thursday he’d asked the city Department of Investigation to probe the vendor and what happened with the batch of botched absentee ballots that went out to 100,000 Brooklyn voters late last month.

De Blasio added that Attorney General Letitia James “is aware” of the issue.

A DOI spokesperson said the agency, even before the mayor’s request, had already begun an examination of the screw-up that sent internal envelopes with wrong names and addresses to many.

A spokesperson for James, meanwhile, declined to confirm or deny an investigation into the debacle, which necessitated the sending of replacement ballot packages as the Nov. 3 election approaches.

The screwup drew the scorn of President Donald Trump, who has cast baseless doubt on absentee ballots as he trails in the polls leading to an election in which millions are expected to vote by mail due to the pandemic.

‘Significant Unnecessary Costs’

New York York City election officials picked Phoenix in May to print and distribute absentee ballots for this year’s election without the rigorous vetting that comes from asking several firms to competitively bid for the work.

Just five years earlier, a state watchdog had criticized the city for hiring the same Rochester-based contractor the same way: with no-bid contracts to print paper ballots.

In a March 2015 audit, state Comptroller Thomas DiNapoli examined paper ballot contracts for 13 local election boards around the state, including the New York City Board of Elections.

DiNapoli found that city taxpayers incurred “significant unnecessary costs” because the BOE brought in Phoenix on a no-bid basis to print the paper ballots voters fill out at polling locations.

DiNapoli estimated that the city wound up paying $2.4 million more than it would have if the contract had been competitively bid. He found Phoenix charged 52 cents for each ballot printed, compared to an average competitive bid price of 35 cents.

Officials in the comptroller’s office said in 2010 BOE chose not to competitively bid the paper ballot contract, instead relying on Phoenix, a subcontractor already working for the manufacturer of the voting machines used by the board.

The BOE also greatly overestimated by 70% how many ballots it needed Phoenix to print, ordering 14.1 million but only using a fraction between 2010 and 2012. All told, the auditors found, the BOE wound up with 9.9 million unused ballots that cost the taxpayers an extra $5.1 million.

In an August 2013 meeting with the comptroller’s auditors, BOE officials said they planned to competitively bid the printing of ballots going forward in 2014.

In 2015, a city agency, the Department of Citywide Administrative Services, hired Phoenix and two other contractors on a competitive basis to supply the BOE with paper ballots.

City agencies are usually required to seek competitive bids when awarding contracts of more than $20,000 to encourage businesses to offer lower prices and provide better service. The protocol can be waived if the city finds it needs to hire on an emergency basis.

‘Emergency Circumstances’

That’s precisely what happened in May when the BOE needed to hire a firm to print and distribute absentee ballots. This time, BOE officials said they had no choice but to ditch competitive bidding.

For years, the BOE had printed all absentee ballots in-house. But in April, Gov. Andrew Cuomo issued an executive order allowing all voters to vote absentee in the June primary due to the coronavirus pandemic. He later extended that to the November general election.

The BOE decided it couldn’t handle the work in-house and turned to three firms that had been printing ballots for city elections for years, including Phoenix, which has a history of contributing to GOP committees and candidates.

Officials at two of the companies, Phoenix and Fort Orange Press in Albany, said they could handle printing and distribution of absentee ballots.

In May BOE awarded Phoenix a $4.6 million no-bid contract to print and distribute absentee ballots across Brooklyn and Queens, first for the June primary and then extending the contract through the November general election.

Fort Orange got a $6 million no-bid contract to distribute absentee ballots to Manhattan, the Bronx and Staten Island.

“Really, circumstances decided for us that we needed to stick with the plan we implemented in June,” BOE Executive Director Mike Ryan said during a virtual meeting with Brooklyn Democrats last week. “We acted under emergency circumstances in June and we carried that through to November because the process worked in June.”

Caught in a ‘Trap Door’

While Phoenix had printed ballots for the city for years, distribution of ballots, it turned out, was not the company’s forte.

Starting Sept. 26, Phoenix sent out its first print run of nearly 100,000 ballots to Brooklyn. A series of missteps and a computer glitch city officials blamed on the vendor resulted in a still-unknown number of voters receiving ballots with useless, mislabeled envelopes.

For days, Ryan declined to explain to the public what went wrong. But in a briefing with the Kings County Democratic Party Executive Committee last week, he provided some details.

Ryan said the absentee ballots were run through a device that scans the voters’ bar code ID visible through a window in the external envelope and compares it to the name of the voter on the face of the envelope receiving the ballot. During the print run, this so-called trap door is supposed to open and receive ballots that don’t match up.

The “trap door” didn’t function, which Phoenix was aware of, Ryan said. That triggered a separate spot check by Phoenix that discovered some of the mismatches.

Phoenix then tried to examine the entire run by contrasting voter ID data sent by the Board of Elections with the ballot packages already printed.

That double-checking didn’t happen, however, because Phoenix officials discovered they needed to update the software they use to do that analysis — an update that turned out to be a disaster, Ryan said.

“When they updated the software, all of the data was lost,” he said, confirming THE CITY’s reporting last week.

As a result, an unknown number of ballots went out across Brooklyn from Sheepshead Bay to Crown Heights to DUMBO that contained return envelopes assigned to other voters. If a voter sent in a ballot without noticing that, a signature match performed by BOE would result in the vote being voided.

“We don’t have an explanation other than ultimately human error for not appropriately going through these ballot envelopes and ensuring that the inside envelope matched the outside envelope,” Ryan said.

‘BOE Screwing Up’

Ryan contended it’s impossible to know precisely how many voters got the wrong ballot packages because of the data wipeout by Phoenix, although he said the BOE had received 500 to 600 complaints about them.

This week, Phoenix began re-sending ballots with the correct return envelopes to all voters in the original print run, with the vendor picking up the cost.

“They created the problem and they’re going to have to solve the problem,” Ryan said.

During the briefing, executive committee member Josh Skallar pressed Ryan on whether any Board of Elections staff performed any type of oversight of Phoenix’s press run in Rochester before it went out.

“This is not a problem of a bad vendor. This is a problem of the BOE screwing up,” Skaller said.

Ryan confirmed there was no BOE oversight of Phoenix’s print run, stating, “When you’re in an emergency circumstance and you have to rely on an outside vendor to do work that prior to that you did in-house, you have to rely on them to do it well and do it properly.”

He noted that Phoenix is based in Rochester, adding, “When you hire a vendor to do a job, you don’t hire your own staff to go live in Rochester, New York, to watch their operation.”

“Yes, you do!” an exasperated Skaller blurted. “You absolutely send somebody to spot check. You need to know the ballots you’re sending out are on the up and up.”

An Apology and a Ballot

Going forward, Ryan says the BOE plans to seek proposals from multiple vendors for absentee ballot contracts. And he said the board is considering having city BOE employees more closely monitor future print runs.

It’s still not clear how this will ultimately affect the vote in Brooklyn. Some voters may have mailed in their ballots without noticing the different voter ID on the return envelope, and their votes will be voided. They may not understand that they must mail in the corrected version — or cast a ballot in person — or their vote won’t count.

The do-over ballots all have a red bar on both the internal and external return envelopes and a letter telling voters to destroy the first-round ballot if they haven’t mailed it in.

“We apologize for this error,” the letter states.

THE CITY is an independent, nonprofit news outlet dedicated to hard-hitting reporting that serves the people of New York.