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Monday, January 11, 2010

Nothing New Here

There's nothing really new in this note in Crain's New York on Sunday - neither the fact that Governor Paterson favors SL Green while the Senate wants Aqueduct Entertainment Group; nor the notion that the decision will come within a specified time frame (this week, as reported in this case).

And there's nothing new in the following, but I'll say it again: It seems hard to believe that, with the recent focus on ethics (especially in light of the Bruno conviction), and given all of the publicity surrounding the ties between elements of AEG and Senate president Malcolm Smith (plus the rumors, which he's denied, that he's interested in a post-Senate career at an AEG-run racino), that the Senate would persist in its insistence on that group. Perhaps it's all innocent, and they really feel that AEG is the best selection....but you would think they would want to avoid any hint of an appearance of improper influence unless the group is so outstanding that they are, say, promising to turn horse manure into cash.

However, on the other hand, James Odato reports today in the Albany Times-Union of a tie between Governor Paterson and his favored bidder.

SL Green hired Bill Lynch as a $7,500-per-month lobbyist in November; Lynch is Paterson's political adviser. Lynch said the Paterson campaign paid him $10,000 last year but he has been working for free for months. He said he doesn't talk to the governor about Aqueduct.
Yeah, right, I'm so sure! Plus, SL Green raises other questions/problems such as its connections to the Seminole tribe, and its exposure to the NYC commercial real estate market.

Odato also reports that NYRA requested and was granted an extension until January 19 to turn over its financial records to State Comptroller Thomas DiNapoli. And he writes that, whereas the association initially resisted what is an obviously politically motivated ploy to investigate a financial fiasco created by the state's shameful failure to name a VLT operator (not to mention the whole flawed OTB system), it will now be turning over salary information which it considers proprietary.
Among 2008 and 2009 materials demanded are all purchase orders, contracts, consultant agreements, invoices, vouchers, payroll registers and any and all documents supporting payroll expenses, including employee time and attendance records.

[Charles Hayward] said that money is so tight that he and other non-union employees will have their wages frozen this year. He would not provide details on executive salaries, which NYRA considers proprietary -- although other tracks, such as Churchill Downs, publicize salaries. [Editor's note to James Odato on this little bit of editorializing: Churchill Downs is a public company, and therefore obligated to disclose its officers' salaries.]

According to people familiar with NYRA's finances, Hayward, chief attorney Patrick Kehoe and Chief Operating Officer Hal Handel are paid more than $400,000. In 2006, when NYRA was required to reveal expenses as part of its bankruptcy filing, Hayward's salary was listed at $377,746 and Kehoe's at $376,923.


Teresa said...

I thought that non-profits had to be listed at sites like Guidestar, where salaries are a matter of public record; I know that there are different types of non-profits, and I guess that that's why NYRA's not listed.

Anonymous said...

So Governor David Paterson's political consultant and confidant Bill Lynch is lobbying on behalf of a bidder for the Aqueduct VLT award? How can this be when Paterson is now out there with his "reform" agenda that includes aproprite lobbying conduct in NY State? This is surely contrary given the Governor is rumored to be a supporter of the SL Green bid. Seems every decision maker really does have a preference; political or practical.

NYRA handing in some information seems reasonable. Whatever happened with the Odato/Times Union FOIL request from December 2008 that ended up in litigation by NYRA against the State and Laura Anglin?

Anonymous said...

So SL Green has an inside track with The Governor via Bill Lynch. Not surprising.

There had to be some reason the Governor would choose SL Green when their gaming operator is totally wrong for Aqueduct.

There will be a huge outcry now if SL Green wins this one.

Steve Zorn said...

Teresa's right that, in general, not-for-profit charities are subject to the jurisdiction of the attorney general and do have to supply information, inter alia, on their top salaries. NYRA is a special case, a not-for-profit that's not a charity. But, in initially opposing DiNapoli's subpoena, Charlie said thatNYRA wasn't subject to the Comptroller's oversight because it was, in fact, subject to oversight by the attorney general. Well, they've now seen the downside of getting the political judgment wrong.

As for the salaries that Odato reported, I almost don't begrudge Charlie his $400,000. It's a reasonable enough rate for the CEO of an organization NYRA's size, and he certainly puts in the hours, including way too many hours at the obligatory charity functions. What bothers me a lot more is the $400K-plus for Pat Kehoe and Hal Handel, who are not the public face of NYRA and who, in the opinion of many, are lucky to have those jobs and salaries. In any event, it certainly gives me a starting point if I'm ever looking for a job at the track.

Anonymous said...


Your link to the NY Times article sets out the incredible danger of the State leaders choosing SL Green for Aqueduct because of the treacherous waters they and others are currently navigating through the NY Commercial Real Estate Market. Leading economists are predicting a 40% chance of a double dip recession which will devastate the Commercial Real Estate even further. Governor Paterson and the other State Leaders who will make the Aqueduct decision must be fully aware of the danger of SL Green not being able to perform in this environment.

We cannot afford to have another Delaware North disaster and have SL Green not perform for reasons beyond their control. Remember we were told in October 2008 that Delaware North was fully funded then and look what happened.

Governor Paterson, if the press is to be believed and your choice is SL Green and you prevail, you will never be forgiven if SL Green fails to perform and VLT's at Aqueduct are delayed even further.

Anonymous said...

Glad to see NYRA is cooperating with NiNapoli's office. Better late than never.

However I cannot see Hayward and maybe even Dunker surviving this debacle.

Anonymous said...

It is staggering how much Patrick Kehoe is making.

No wonder NYRA has financial problems.

Teresa said...

Steve, there are a lot of non-profit entities that are not charities: independent schools, colleges, etc. The school at which I work is listed, and a Guidestar subscription will get you the salaries of the top 5 highest-paid employees. Interesting that a school would be listed, but not NYRA. Wonder what the rationale is.

Anonymous said...

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Anonymous said...

4:28 post actually a bit funny!!

But, the New Nyra was supposed to be more transparent than the Old, not the other way around.

Anonymous said...

Maybe NYRA will learn that New NYRA has to be transparent and will be so, otherwise I suspect that Tom DiNapoli and his auditors will drag them kicking and screaming to this point.

Anonymous said...

My money is now definitely on AEG. On top of this their plan is just a good as the others.

The Malcolm Smith connection has been in the public arena for a while and the Senate has not walked away from AEG, consequently the allegations must be baseless.

Bill Lynch appears to be a very close associate of Governor Paterson. His connection to SL Green is disturbing and will definitely put a tinge of corruption should SL Green prevail and be selected by Governor Paterson.

Anonymous said...

I dont know if there is a tinge of corruption with Governor Paterson on his choice of SL Green for Aqueduct. However I suspect that this allegation will follow him whether it is true or not.

Anonymous said...

NYRA as articulated by Hayward wants SL Green.

For this reason alone I am vehemently opposed to SL Green because I have lost all trust in NYRA, its management and so called independent Trustees.

I for one will realize the crooks win if Albany chooses SL Green.

Anonymous said...

The crooks have won already, no matter who is chosen.

Anonymous said...







Anonymous said...

Surely the Aqueduct decision will come down this week. I hope they choose anyone but The Hard Rock. We will have nothing but trouble if we have the Hard Rock Casino in Queens.

Each of the other bidders is better than that lot.