Shakeup in Hochul administration with top execs facing scrutiny

ALBANIA – New York’s former acting budget director was forced out of her post Monday, and a top official at the state’s Office of Information Technology Services is taking voluntary leave amid an investigation into whether government contracts for which they worked had followed procurement instructions. .

State officials said Rajiv Rao, deputy chief information officer for technology and chief technology officer at the Office of Information Technology Services (ITS), is currently using accrued vacation time. He went on leave Tuesday, a day after acting budget director Sandra L. Beattie left her post.

On Wednesday evening, after the Times Union asked Gov. Kathy Hochul’s office about any concerns about the work of Beattie or Rao, who had a close working relationship and partners on major projects, a spokeswoman for Hochul said they had referred the matter to the state. inspector general’s office.

“As she has said since day one, Governor Hochul is committed to restoring trust in government,” Hazel Crampton-Hays, a spokeswoman for Hochul, said in a statement. “When concerns arose, we immediately referred them to the inspector general.”

Beattie’s tenure ended at a critical time during the final month of budget negotiations and less than a week after it was announced that Robert L. Megna, who had been state budget director for Governors David A. Paterson and Andrew M. Cuomo, would be back. in that role for Hochul, who announced Megna’s appointment last week.

The position of budget director is one of the most critical roles in the governor’s administration. That person oversees the state’s fiscal policies, executes the state’s annual budgets — plans that now total $200 billion — and also manages New York’s debt portfolio.

Rao has not been charged with wrongdoing. In a recent post on Linkedin, a social networking site for business professionals, he noted that he had the “privilege of working closely with Sandra (Beattie) on a daily basis.” He also said she has “deep understanding and knowledge of how government works, along with a strong desire to challenge the status quo,” and called those qualities “a huge plus for New York.”

People who work for companies that do business with the state have privately raised concerns about the number of multimillion-dollar contracts New York has awarded to Deloitte Consulting, a company where Beattie worked for roughly two more years than one. decade ago. There have also been internal questions about the number and type of consultancy contracts awarded during the coronavirus pandemic.

The state originally contracted with IBM to develop Excelsior Pass, a digital application for vaccination credentialing, but Beattie in 2021 stepped in and pushed for Deloitte to become a system integrator, according to a person familiar with the matter. Rao worked with Beattie on that project.

“The State Budget Division … which advises the governor on issues affecting the state’s financial health, partnered with the Office of Information Technology Services … to explore how digital technologies can help speed the reopening of economy without compromising public health,” Deloitte says in a post on its website. “Sandra Beattie, the state’s first deputy director of the budget, and Rajiv Rao, ITS New York’s chief technology officer and deputy chief information officer, worked quickly to pool resources and leverage expertise from internal agencies such as the US Department of Health.

That project was not publicly bid – at a time when many projects were being fast-tracked and allowed to bypass normal procurement procedures.

Other concerns have been raised within the ITS ranks about Rao-led projects that often relied on funding sources authorized by the state Budget Division. A person familiar with the investigation said another of those cases involved a project two years ago in which Rao had led a brief and later abandoned pilot project to migrate hundreds of government employee email accounts to a Google platform.

Rao, 58, did not immediately respond to a request for comment. He has been a key figure in the state’s major technology initiatives for about a decade, and last year was named one of the nation’s “25 Leaders, Dreamers and Leaders” by Government Technology magazine. In 2012, Rao was named the lead architect for the design and creation of the state’s data center, a process that state officials said involved more than 50 agencies and 20,000 computer servers.

Beattie, 48, who also has not been charged with wrongdoing, could not immediately be reached for comment. She had been budget director for just a few months after Robert Mujica, who was appointed to the position in 2015 by Cuomo, announced in November that he was leaving to become head of Puerto Rico’s Financial Management and Oversight Board.

On October 4, the Times Union asked Hochul in an editorial board discussion if she was aware that Mujica was planning to leave her administration and if Beattie would take over as budget chief. “This is news to me,” Hochul said at the time. “You are a source of information.”

Beattie’s sudden departure and Rao’s layoff come after Angelo “Tony” Riddick, who had been ITS’s chief information officer, announced he was stepping down. Riddick, a retired US Army colonel who had more than 30 years of military service experience, had been in that role for more than two years and had previously served as chief information officer for the US Virgin Islands.

An ITS spokesman said Riddick, 61, will retire at the end of the month and that his departure is unrelated to Rao’s leave.

“While he is forever grateful to the state of New York for the opportunity of a lifetime, now is simply the right time to return to Florida and settle into the home he and his wife built together for the coming out pension,” the agency said in a statement. . “Tony is proud of the work he helped lead at ITS since December 2020, including helping state agencies emerge better, stronger and more responsive after the pandemic, making real and meaningful progress in efforts to modernize state and creating the Joint Security Operations Center – a national model for cybersecurity cooperation across all levels of government.”

Deputy Chief Information Officer Jennifer Lorenz will lead the agency in an acting capacity while a search is conducted for a permanent replacement, the ITS spokesman added. Lorenz has been with the office since it was formed more than a decade ago.

In the Budget Division, Megna will move into the director position while on sabbatical from the State University of New York, where he is president of the Rockefeller Institute of Government and senior advisor to the chancellor. He is scheduled to serve temporarily as budget director through this year’s legislative session, which ends in June.

During Megna’s previous tenure as budget director from 2009 to 2015, the state “achieved the highest financial rating in 40 years from three major credit rating agencies,” according to Hochul’s office.