In an astonishing development, it has been revealed that New York City Mayor Eric Adams is implementing a pre-paid cash card program for migrants, potentially amounting to a multi-billion dollar endeavor, with significant concerns about fraud controls and accountability. The mayor’s administration, without public discussion, oversight, or consultation with the city council, has partnered with Mobility Capital Finance (MoCaFi), a Newark-based company referred to HPD by City Hall, to distribute debit cards with taxpayer money to migrants.
The purported rationale for this program is to address the issue of wasted meals for migrants staying in hotels. Rather than resolving the problem with the existing no-bid contractor, DocGo, which disposes of up to 5,000 meals daily, the city has opted for a new contract with MoCaFi, allowing them to provide migrants with up to $10,000 each in taxpayer money without ID checks, restrictions, or fraud control.
Notably, MoCaFi, a financial services provider, was the sole vendor considered for this complex financial service, despite the presence of numerous top-tier financial services and public benefits providers in New York City. The company’s founder, Wole Coaxum, was “referred to HPD by City Hall,” and MoCaFi lacks experience in large emergency contracts.
The contract raises significant concerns about accountability and transparency. The city is set to pay MoCaFi a fee of up to $53 million for issuing blank Mastercards, which has the potential to disburse at least $2.5 billion on prepaid debit cards over a year. The lack of built-in fraud protections is alarming, as cardholders won’t be subject to ID verification, and the city assumes responsibility for the security and delivery of the cards.
Furthermore, the debit cards are not restricted like traditional welfare cash assistance or federal food stamp benefits. There are no built-in protections to ensure that the money is spent on authorized products or that recipients don’t withdraw the cash. The contract allows flexibility for the city to change spending codes and even enable cardholders to withdraw cash from domestic and international ATMs, subject to the city’s changing discretion.
The mayor’s administration’s approach has sparked concerns about potential misuse, lack of oversight, and the considerable financial implications of the program. The absence of a competitive bidding process and reliance on a single vendor raise questions about the decision-making process and accountability in implementing such a significant financial initiative.
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