2010-03-12 / Top Stories

Flake, Jay-Z Crap Out On Aqueduct Racino

By Howard Schwach

The Reverend Floyd Flake and rapper Jay-Z dropped out of the Aqueduct Entertainment Group consortium that was chosen by Governor David Paterson and other politicians to run the planned gambling video slot machine Racino at the aging Queens racetrack, published reports say.

Their defection came in the wake of probes by state and federal officials into the deal and accusations that the selection of AIG was rife with corruption and favoritism.

Published reports in the New York Post and New York Daily News on Wednesday said that the Governor was ready to pull the plug on AEG because it did not meet state requirements for the submission of paperwork in a timely manner.

“The failure by the winning team to finish its application on time and the withdrawal of the Rev. Floyd Flake and rap star Jay-Z from the group adds to the suspicion the process was rigged,” said Post insider Michael Goodwin. “If everything was above board and the players could pass muster in the final vetting process, [Flake and Jay-Z] stood to make serious money by staying involved.”

Flake met with Paterson. three days after the deal with AEG was made, to talk about the governor’s reelection plans – since stalled by all the controversy swirling around him. Paterson has said that there was no quid pro quo. Right after the meeting, however, Flake announced that he would not necessarily back Andrew Cuomo in the upcoming primary, but might back Paterson instead.

Paterson has since recused himself from the Racino decision-making process, passing his role as one of the three decision-makers to his top aides. “I’ve recused myself from the process on the advice of my lawyers,” he said in a one-line terse statement on Tuesday evening.

On Wednesday morning, Daily News Albany bureau chief Kenneth Lovett, considered by many to be one of the most knowledgeable people covering the story, said that AEG would be bounced from the Racino project as early as Thursday morning.

Lovett said that a memo was sent from the state lottery division to Paterson’s chief of staff on Tuesday stating that AEG is “unlicensable” for numerous reasons.

Long before the decision was made, The Wave posited the political clout of Flake and his AEG group.

“Queens political activists have begun to believe that the bid process to provide a gambling “Racino” at Aqueduct is rigged in favor of one of the strongest political and religious leaders in the city - the Revered Floyd Flake, who once served as the area’s congressman,” The Wave wrote. “Flake has close ties to one of the consortiums bidding for the multi-million dollar project, the Aqueduct Entertainment Group (AEG). One of AEG’s several partners, insiders say, is the Empowerment Development Group, founded by Flake, who is the spiritual leader of the massive Allen AME Church in Jamaica. One Queens Democratic insider, who asked not to be identified for fear of retribution from Flake, said, “Flake has close ties to State Senate President Pro Tem Malcolm Smith, who is a deacon in the church. He has close ties to Congressman Greg Meeks, who took his seat when he left Congress. He has close ties to [Governor] Paterson and his father, Basil.”

Insiders declined to comment on what might happen to the process if and when AEG is bounced by the state.

One conjecture is that the nod would quickly be given to another of the seven bidders. Others say that the process would start anew in an improved and more transparent manner.

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