A standpipe that contractors told responding firefighters was working had in fact been chopped into segments in 2006 to make it easier to remove asbestos. Firefighters vainly pumped hundreds of gallons into the pipe, thinking the water was getting to the upper floors.

FDNY officials missed a chance to learn of the severed standpipe after a piece fell off the Deutsche building and went through the roof of the firehouse next door. Fire Commissioner Nicholas Scoppetta personally inspected the firehouse but did not order a followup inspection of the bank building.

The FDNY rarely, if ever, inspected the building every 15 days as required while it was being demolished, a failure Morgenthau said "implicates high-ranking FDNY officials."

Demolition workers were supposed to build plywood walls around stairwells to contain dust during asbestos cleanup, but instead sealed off the openings completely. When firefighters arrived, their access was blocked.

Buildings Department inspectors saw the blocked stairwells, but were unaware it was a code violation. They also never visited the northeast quadrant of the building where the standpipe gap was plainly visible.

A memo prepared for the FDNY's chief of operations in 2005 outlined an emergency firefighting plan for the building, but it was never distributed.

The Lower Manhattan Development Corp. knew about several fires inside the tower just before the deadly August 2007 blaze but did not report them.

Perhaps the saddest finding was a missed warning two weeks before the fire from a construction consultant URS Corp., which called the building "an accident waiting to happen." The general contractor, Bovis Lend Lease, could "no longer be trusted" to ensure building safety, the consultant warned.

Morgenthau, whose office conducted 150 interviews, subpoenaed more than a million documents and called 80 grand jury witnesses, decided not to charge the city or any of its employees. The DA cited sovereign immunity, which protects city workers from prosecution for actions taken on behalf of the public.

The DA is continuing his investigation into why city and state officials allowed John Galt to stay at the Deutsche Bank tower after the city Department of Investigation told them to get rid of the company.

The Bloomberg administration plans to review Morgenthau's findings to see if any FDNY or Buildings Department employees should be fired. The mayor said he will set up a new group of civilian inspectors to check construction sites.

"The city accepts responsibility for the inspectional and enforcement failures by its agencies," Mayor Bloomberg said in a statement.

Morgenthau also decided not to indict Bovis Lend Lease, the general contractor that hired Galt, arguing that the giant company would be fired from jobs all over the city.

Instead, the DA charged subcontractor Galt, whose ties to a mob-controlled firm had been revealed by a Daily News investigation.

Two Galt supervisors, Mitchel Alvo and Salvatore DePaola, were charged with manslaughter, criminally negligent homicide and reckless endangerment. A Bovis site safety manager, Jeffrey Melofchik, faced those and other charges.

Firefighter Graffagnino's father, Joseph Sr., blasted what he saw as selective indictment.

"If all they wanted to indict was Galt and three contractors, they could have done it the day after the fire," he said. "They didn't need a 16-month investigation."