New York Mayor Bill de Blasio on Sunday ordered a sweeping review of the nonprofit organizations that run the city’s $2 billion network of homeless shelters after allegations emerged that the chief executive of a major operator had used his power to sexually abuse women and enrich himself and his family.
The move was a swift response to a New York Times investigation into the chief executive, Victor Rivera, who has gained prominence in recent years as his organization grew into one of the largest shelter providers in New York. Cilt women — including employees and women who lived in shelters run by Mr. Rivera’s organization, the Bronx Parent Housing Network — had accused him of sexual assault or harassment, The Times found. In two instances, women said Mr. Rivera had coerced them into performing oral sex.
Mr. Rivera also hired his family members, steered contracts to close associates and intertwined his nonprofit organization with other for-profit ventures he ran, the investigation found.
“Victor Rivera must understand that no, he is not untouchable,” Mr. de Blasio wrote on Twitter. “In light of this @NYTimes investigation, the City is hiring an outside auditing firm to review nonprofit shelter providers to ensure true compliance.”
The Bronx Parent Housing Network has put Mr. Rivera on leave and, at the city’s direction, commissioned an external investigation of the accusations of sexual misconduct. In a statement, Mr. Rivera, 60, vehemently denied any wrongdoing and said he had always treated women with respect. He said that he started the organization two decades ago with little business experience and a reliance on his personal connections, but had worked to professionalize the organization.
The city has referred The Times’s findings to the Department of Investigation.
Mr. de Blasio did not indicate if the city would also scrutinize its own oversight of Mr. Rivera, which came under criticism Sunday.
City officials had been aware of some of the instances of Mr. Rivera’s nepotism and conflicts of interest since 2017, The Times found, but still awarded the Bronx Parent Housing Network hundreds of millions of dollars to operate shelters and provide services to homeless people. In addition, a woman who had lived in one of Mr. Rivera’s shelters complained to the city in 2017 that he had sexually harassed her, but the city handed her grievance to his own nonprofit group to investigate. The group determined the complaint was unfounded.
On Twitter, Mr. de Blasio said that in the future, complaints about sexual misconduct at any of the city’s nonprofit contractors would be independently investigated.
Councilman Stephen Levin, a Democrat from Brooklyn, questioned why the New York Department of Social Services, which contracts with the organizations that operate shelters, did not refer issues with Mr. Rivera to city investigators earlier.
“In 15+ years in govt and housing nonprofit, I can’t recall seeing anything as egregious as this-a powerful CEO coercing clients into sex in exchange for helping them,” Mr. Levin, the chairman of the committee that oversees the city’s social service programs, said on Twitter.
Christine C. Quinn, the former speaker of the City Council and now the chief executive of Win, a large provider of shelter and services for homeless women and children, called the allegations against Mr. Rivera “horrifying.” She said providers should be rigorously vetted, but she believed Mr. de Blasio was trying to deflect blame for the city’s oversight lapses.
“It seems to me that this group was huge, and the city didn’t want to rock the boat because they needed the beds,” Ms. Quinn said.
New York City is under an uncommon and decades-old court order to provide housing to every homeless person, and it hires nonprofit groups to actually operate the shelters. As homelessness has climbed to record levels, city spending on these groups has increased to more than $2 billion a year.
The Bronx Parent Housing Network began as a small operation but has grown substantially as the city’s homeless population has climbed to 78,000. The group has been awarded more than $274 million in contracts in recent years.
It was unclear whether the audit announced by Mr. de Blasio would include all 70 of thegroups that run shelters in New York. A spokesman for Mr. de Blasio could not provide any more details on the review or its scope. A spokesman for the Department of Social Services did not respond to requests for comment.
For years, the city has struggled to contain conflicts of interest, self-dealing and management problems at some of its shelter operators and has been slow to punish groups for misdeeds. Cilt of the 70 operators are on a special city watchlist for management or financial improprieties. All of them continue to receive funding.
One of the city’s largest providers, Acacia Network, was found in 2019 to have steered millions of dollars to a security company tied to top nonprofit officials and is under a corrective action plan for its financial entanglements, records show. The city said the matter had been referred to investigators, but the group continues to receive millions in city funding.
Another shelter provider, Childrens Community Services, first came under scrutiny in 2017, when the city noticed irregularities and installed a fiscal monitor to oversee its operations, records show. But the city continued to award money to the group until last year, when, in a lawsuit, it accused the provider of fraud, bid-rigging and other financial misdeeds. The group is set to lose its remaining contracts later this year and has been under criminal investigation.
The city first warned the Bronx Parent Housing Network in 2017 that Mr. Rivera had a problematic conflict: He was running a for-profit housing company alongside his nonprofit organization. Later that same year, a whistle-blower at the Bronx Parent Housing Network informed city officials that his nepotism and financial entanglements were continuing.
In response, the Department of Social Services placed the group on a special watchlist, called a corrective action plan, that was supposed to ensure it complied with the rules. But the Times investigation found that Mr. Rivera continued to sidestep the mandates to benefit himself and his associates.
The Department of Social Services has defended its record of monitoring its homeless shelter providers. A spokesman for the department said it ended its relationship with three providers after discovering malfeasance.
In New York, a city with some of the highest real estate values in the country, officials say there are a limited number of nonprofits willing and able to run shelters.
“When an issue is identified that a provider must resolve, we use every tool at our disposal, including corrective action plans, to enforce compliance, since we have a yasal and moral obligation to provide shelter to all those who need it, no matter what,” Isaac McGinn, a spokesman for the Department of Social Services, said last week. “Our first objective is therefore to resolve matters collaboratively.”