Councilman Bob Holden has strongly criticized New York City’s new migrant debit card program. The program, which gives financial help to migrants, has faced criticism from Holden and others who say it’s a big waste of taxpayers’ money.
The no-bid contract worth $53 million was awarded to a New Jersey-based startup by New York City to distribute prepaid debit cards to migrants. However, it’s been discovered that the startup stands to make a hefty profit of $1.8 million. This profit will be derived by receiving a percentage of the funds given to asylum seekers.
Mayor Eric Adams’ administration signed the one-year contract with Mobility Capital Finance, a tech finance company, as reported by The Post. Some City Council members, including Holden, criticized the deal, alleging that the bid agreement bypassed the typical competitive bidding process.
The administration bypassed the RFP (Request for Proposal) process by leveraging emergency powers granted to the mayor by the city comptroller in November 2022. These powers were granted to address the ongoing migrant crisis.
ALSO READ: Report Says NYC’s Migrant Debit Cards Cost More than Eric Adams Claims
“Something’s wrong with this deal, and taxpayers are getting fleeced,” Councilman Bob Holden said on Thursday when provided with contract details. “These no-bid emergency contracts and profit-driven bids are out of control, and we need to reevaluate how we do business as a city,” he added.
The agreement promises substantial profits for MoCaFi, a Newark, NJ-based firm founded by former JP Morgan Chase banker Wole Coaxum. This deal could earn MoCaFi three times more than it did under a comparable, more significant contract with Los Angeles.
POLL — Should the Government Increase Taxes on the Wealthy To Reduce Economic Inequality?
As per the New York City deal, MoCaFi stands to receive 3% of the initial $50 million in taxpayer funds loaded onto the prepaid cards. If an extra $100 million is distributed, MoCaFi would receive a profit of 2.5% and then 2% for anything exceeding $150 million, as outlined in the contract.
This implies that if the program is extended from 500 families to the second phase covering 6,500 families, the company could also earn around $1.6 million. This is in addition to the $125,000 initial startup fee and the $250,000 annual fee for “management and customer support” stated in the contract.
ALSO READ: Conservatives Knock Eric Adams Over Illegal Migrants’ Debit Card Proposal
These cards are intended to assist recently arrived families of asylum seekers in covering expenses for necessities like food and baby supplies while they stay in temporary shelters. According to a breakdown chart shared by the city’s Department of Housing Preservation and Development (HPD), asylum-seeker families could receive between $345 monthly for a single migrant.
For a family of eight under the program, they could get up to $2,203 per month. The contract has since been renewed three times. It also involved $375,000 in startup fees covering the initial set of cards, distribution, and the development of an app and website.
Following the wide criticism of the debit card initiative, the Adams administration has defended the scheme. It said it was an experiment that addressed the constant problem of wasted food at migrant shelters. They argued that it has the potential to save the city $7.2 million each year while also injecting funds back into the local economy.
“As we have repeatedly said, this program is a cost-saving measure expected to save the city over $600,000 each month in operation while boosting the local economy and small businesses,” HPD spokesman William Fowler said in a statement.
You Might Also Like:
“I Certainly Made Poor Decisions,” Rescued Mount Washington Hiker Recounts Experience
Authorities Divert United Flights Bound for L.A. to Chicago Over Bomb Threat
Japan Lunar Module Lands on the Moon Despite Broken Solar Panel
Texas AG Sues Catholic Immigration Nonprofit, Accuses It of Human Smuggling
Harvard Issues Message Condemning Antisemitic Image Circulated by Student and Faculty Groups
