2010-02-26 / Top Stories

Silver Reins In Aqueduct Racino

Awaiting Results Of State Investigation
By Howard Schwach

An artist’s rendition of the Racino planned by the Aqueduct Entertainment Group. An artist’s rendition of the Racino planned by the Aqueduct Entertainment Group. Governor Paterson’s plan to give the planned Aqueduct Racino to a consortium that includes politically-connected ex-Congressman Floyd Flake and rapper Jay-Z was put on hold this week until the state inspector general wraps up a probe of the controversial deal.

Assembly Speaker Sheldon Silver, one of the three men tasked with approving the Racino deal – along with Paterson and Senate leaders – said on Monday that he would not put his signature on the project until Inspector General Joseph Fisch completes his investigation into the bidding system and subsequent decision to give the planned gambling facility to the Aqueduct Entertainment Group.

“I think that everything should wait until that [investigation report] is available,” Silver told Daily News reporter Glenn Blain. “I think what’s important is we know that we’re signing on to something that is appropriate, and if not, we’re not going to [sign on].”

A spokesperson for the inspector general said that there is no indication of how long the probe will take, but that such investigations often take months, if not years.

In addition to the state probe, the U.S. attorney’s office in Manhattan has reportedly subpoenaed the state for Aqueduct-related documents as part of its own probe into the decision.

Silver’s decision to delay the process until after the investigations are completed comes in the wake of a new Sienna College survey that found that only three percent of the state voters who responded to the poll said that the decision is “fair and appropriate.”

Thirty-three percent said that the decision was “politically motivated.” The rest said that they did not have the information to make an informed decision.

The decision to give the Racino, which would house thousands of video gambling machines as well as a restaurant and conference space, was made by Governor Paterson, Assembly Speaker Sheldon Silver and leaders in the State Senate, including State Senator Malcolm Smith and conference chief John Sampson.

All of those men have close ties to Flake, and opponents of the decision claim that the vetting process was skewered to give Flake and his partners the Racino deal from the first.

Last weekend, Peter Kiernan, Paterson’s top attorney, admitted to Daily News reporters that politics was a key factor in choosing AEG for the Racino project.

“It’s not a typical bidding process,” Kiernan told reporters. “It is not governed by procurement laws. It is a political process because you have three political leaders that have to make the decision.”

Just days before the decision was made, a Daily News story says, Flake, one of the major Democratic powerbrokers in the city as an ex- Congressman and the pastor of one of the largest churches in the state, talked about backing Andrew Cuomo for governor in the next election.

Paterson reportedly called Flake to the executive mansion after the decision was made, and Flake later announced that he had not yet made up his mind as to whom he would back for governor.

“That smacks of pay for play,” one insider said. “That is the way things are done in Albany.”

Several local politicians, including Assemblywoman Audrey Pheffer, say that the plans should proceed, despite the charges of cronyism and wrongdoing against those who made the decision.

“It is imperative that New York State moves expeditiously to finalize the contract that establishes the racino at Aqueduct Racetrack. It is a long-awaited project that will bring both construction and permanent, full-time jobs to our community. We welcome this project as an economic engine that is vital to the future of our local economy,” Pheffer said. “Also not fair game is the attack on AEG now, at the end of this much-delayed process.

This current process has been going on for over a year. There has been ample time for all the calls for documents from all bidders to be released and calls for scrutiny of all investors in each of the bids, over the course of the past year.

Further delays now in moving this project forward will hamper efforts to ease the state’s financial crisis, create further problems for the future of horseracing in the state and at Aqueduct, and lose the opportunity of witnessing thousands of quality jobs open up in the area. The potential jobs this Racino project offers are needed now, not later. The potential economic development in southern Queens is needed now, not later. The state has to deal with its budget now, not later.”

Last week, several of the bidders who lost out to AEG said they planned to bring suit against both Paterson and the state.

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