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Thursday, March 01, 2007

The Empire That Won't Go Away

- The announcement by Governor Spitzer that he will convene a new panel to conduct public hearings and hear presentations by the current, and perhaps new franchise bidders, comes as a blow to Excelsior (not to mention the members of the Ad Hoc Committee who so diligently performed their duties), though certainly not an unexpected one. Though Spitzer said that the committee's report and recommendation will serve as a "starting point," the process has been opened up to any new bidders who emerge by March 6. You can expect Excelsior to still refer frequently to the Committee's recommendation, and I imagine that it certainly won't hurt their chances, especially if it comes down to a mano-on-mano with Empire.

For NYRA, the additional $32 million in state loans approved by a New York bankruptcy court on Wednesday clears the way for them to make it through the end of the year and their franchise term. In addition, Spitzer, who in the last two days has presided over two deals - one over worker's comp, and the other over civil confinement of sex offenders - that his predecessor was unable to broker during his ten years in office, wants the VLT's up and running at Aqueduct. State officials are looking to have a deal with NYRA and its business partner, MGM Mirage, by March 16 [Albany Times Union], and I believe that it will really happen this time. Just a guess here, but perhaps the deal, in conjunction with the new loan, will involve NYRA dropping its bankruptcy filing (though it has adamantly insisted it will not drop its land claim....and we fervently hope it won't drop its suit against the Pataki Administration for its blatant and inexcusable stalling on the racino approval.)

The new panel serves as a breath of fresh air for NYRA, and Charles Hayward was understadably ecstatic.

"NYRA is eager to participate in a process where integrity is a prerequisite and advancing the future benefits to New York racing and the state’s interests are aligned,'' Hayward said in a statement. "NYRA is currently the industry leader in integrity and believes strongly that the pure not-for-profit model is best positioned to meet the primary standard for selection.” [Bloodhorse]
This clears the way for NYRA to get out from under the RFP process and have a new chance to make its case. By virtue of the Ad Hoc Committee's working assumption that the state owns the land, the RFP process was by its nature virtually an adversarial one for NYRA. The formalities of the procedure that required the association to detail all of the transgressions of their past management put a big black mark on their bid. NYRA may now have a chance to frame the debate more in terms of which entity is really best qualified to conduct racing in the state, a category in which their experience gives them a big advantage, and to question the true motives of the other bidders in terms of their commitment to racing as opposed to enriching themselves from slots.

As far as Empire goes, man, to me, they are like the Thing That Won't Go Away. They were losers in the RFP process, the subject of political scandal and popular disdain - really, I don't know anyone who likes them - yet here they are with as good of a chance as anyone. I'm not going to rehash the details of my beef with them; you can read that in this post I wrote in October. But to sum up, I feel that they made themselves difficult to root for as a result of their arrogance (especially in ignoring widespread sentiment against Magna and bringing them on board), cynicism, some gross lapses in judgment, and, especially, their bellicose, boorish, and downright sophomoric press releases and statements in which they twisted the facts (if not outright lied) and stomped their feet like two-year olds when informed of the Committee's decision to recommend Excelsior.

Since that time, they have apparently fired the PR agency behind that failed strategy, and have thankfully toned down the rhetoric. However, we have also since learned of the federal grand jury investigation into the ties between their former director Jared Abbruzzese and Senator Bruno, as well as their proposed takeout increase that was tucked into their bid, behind their sunny "we're all about the racing fans" town meetings.

Empire has tried to sweep the Abbruzzese affair under the rug by buying out his shares, and issuing a press release in which they hailed themselves for their "integrity" for conducting a sham investigation that resulted in his removal. But isn't that the same as the Ad Hoc Committee dismissing NYRA's integrity efforts as one that would not have occured if not for the corruption there in the first place?

Empire has succeeded in making a huge issue out of the NYRA indictments, which involved a tax scam amongst low level employees several years ago. So how can they expect us to disregard any suspected recent attempt to illegally influence a government official by one of their key figures - a Director, a maximum shareholder, and a man described as a "driving force" behind their organization? In fact, given Abbruzzese's well-documented reputation as an agressive and hard-driven businessman, isn't this recent suggestion by a commenter totally plausible?

On December 9, James Odato reported in the Albany Times-Union that Empire wrote to the Committee to accuse Excelsior of utilizing unregisterd lobbyists.
Failure to disclose bidding team members or to report any lobbying to the lobbying commission would be "a ground for disqualification," said Jeff Perlee.
Given the fact that Abbruzzese himself is being investigated for being an unregistered lobbyist, don't you think that's a statement that Perlee would like to have back? Considering that this story was published one day after word of the investigation into the relationship between Bruno and Abbruzzese broke, what was he possibly thinking?

Here I actually agree with Perlee - I think Empire should be disqualified if those allegations against Abbruzzese prove to be true. (And for that matter, so should Excelsior if Richard Fields is found to be guilty of the same.) At the very least, they should be questioned long and hard about how they can declare themselves to be this shining beacon of integrity without addressing, in a meaningful manner, both the Abbruzzese affair, and the entire matter of how and why so many principals of Friends of New York, which proclaimed themselves as a neutral fact-finding entity with no interest in bidding for the franchise (and which solicited donations on that basis), ended up doing so anyway as Empire Racing.


Tote Board Brad said...

Is everyone to busy snorting cocaine of of strippers' tits in Vegas to give us an update on the Horseplayers Expo doings? There's got to be some worthy stories begging to be told with that crew out there.

Where are you Walter? Can you pop down and spy on the lads for bit?

Anonymous said...

I vote for whichever entity agrees in writing that each racetrack land parcel will continue to run race meets no shorter than that currently run by NYRA, for overnight purses no lower than those currently offered, and with a wagering takeout rate no higher than currently taken, for as long as they hold the franchise.

That should be the bare minimum standard for being granted the bid, and is all I really care about.

Methinks NTRA would be the only entity to sign that agreement.

The state needs to declare the land permanently green (or gray in the Big A's case) and that it's primary use will never be for anything other than racing purposes.

Anonymous said...

Fact #1 - Abbruzzese approached Tim Smith and members of the FONYR Board to form what later became Empire BEFORE FONYR issued its final report in December 2005 and BEFORE the infamous fund raising trips to KY and Mar a Lago for Bruno. Why else do you think the NYS Lobbying Commission launched an investigation of both of them?

Fact #2 - The only reason MEC and CDI are interested in New York is because they want to control the outbound simulcast signal. If Empire were to tell the truth on that score we would all learn that MEC and CDI together will have veto power over the setting of NYRA's simulcast rates.

There are similar seamy stories about the reasons behind other members' participation in Empire. It's not quite the home grown, world class, one big happy family that Perlee would like to have us all believe it is.