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Wednesday, February 24, 2010

A Fisch Story

It could be weeks if not months for Inspector General Joseph Fisch to complete his investigation into....well, whatever it is that he's going to investigate. Assembly Speaker Sheldon Silver, who now says he won't sign off on AEG until Fisch has issued his conclusion on the matter, didn't add that the state will aid NYRA in the meantime as it is required to do by the franchise agreement. Silver had his own ideas as to what the probe should encompass, but Fisch isn't saying. Maybe he'll want to take a look at Silver's role as one of the three men who decided that they, alone, would decide.

Governor (and candidate) Paterson seems to relish the opportunity to tell the IG all about his interactions with the other leaders during the selection process. Back on Feb 12 when the idea of a probe was first raised by the Speaker, Paterson said:

"If the inspector general would like to come in and examine this, I would welcome that because I have not shared any of the conversations that I had with any of the other leaders in the process.."

"But when the inspector general comes in and asks, I will share that information and you may find it very interesting. [Daily Politics]
Yeah, it should be extremely interesting to hear what the governor has to say. Silver told the News:
"I think what's important is we know we're signing on to something that's appropriate, and if not, we're not going to."
Something that's appropriate, what does that even mean? That Fisch is going to investigate whether AEG can run a racino? Or just whether or not the selection process stunk? If it's just the latter, why shouldn't the project just proceed (if they come up with money really soon. I mean, why, really, should they have not already come forward with the cash in hand)?

If it's determined that AEG is perfectly qualified, but that there was indeed political influence involved in its selection, does that mean that we throw them out and start the process all over again? Unless one believes that another bidder would provide so much more benefits to the community and state, why would anyone be rooting for that? It almost seems as if the losers have become sympathetic victims to some. Does it make you all warm and fuzzy to hear William Bissett, the president of Delaware North, whose failure to see its winning bid to fruition triggered, or I guess I should say, compounded this whole mess, tell Reuters: "Without question, we still remain very interested in the Aqueduct project and committed to its success for the community and the State."

Jay Z has been in the news regarding his role at AEG, but Penn National had its own hip-hop mogul in Russell Simmons. And writing on this website, Simmons stated the case for Penn National, and asked: "Speaker Silver, Senator Abrams [who?] and Governor Patterson [sic], can any of my dear friends in NY government tell me where and when did it all go wrong?"

Maybe Joseph Fisch will fill us all in. Soon, I hope.


Anonymous said...

Interesting how the Daily News now spins this by indicating AEG was "selected by Governor Patterson", conveniently leaving the other crooked pols out of the discussion as if the decision was the Governors alone to make.

Think they are biased?

As for why AEG has not produced the cash, why would they when he deal has not been legally finalized?

Would you as a businessman just hand over $300M to a bankrupt entity without the paperwork being in place?

Anonymous said...

Mr. Simmons clearly has not read the paperwork submitted by Penn National Gaming, INC.

Extract from Penn National Gaming, INC Submission August 13, 2010:
The Penn National offer (originally $5 million, later raised to $250 million and then $300 million) is contingent on the resolution of the items noted on our prior communications, which include, but not limited to:

1) Retention of control of the access and parking in regards to any NYRA or non-gaming/mixed use development
2) Protection in the manner of the refundability of the fee on a pro-rata basis over the term of the right to operate Aqueduct VLT's if the state allows tribal gaming south of Yonkers Raceway or East of Walt Whitman Road/Route 110
3) A cap of $1M on pre-existing and NYRA generated environmental liability
4) NYRA expenses to be paid from the $250 million fee
5) The Aqueduct ground lease not to exceed one-half of one percent of gaming revenue.

These contingencies are potentially VERY costly to the State and NY taxpayers. The facts speak for themselves. In my opinion the State could never accept Penn National's $300 million offer with these onerous conditions attached.

Mr. Simmons clearly needs to do a little more homework before making outrageous claims against his "dear friends" in New York Government.

alan said...

>>As for why AEG has not produced the cash, why would they when he deal has not been legally finalized?

True. I wouldn't mind though hearing them say that they are prepared to immediately satisfy all conditions. The fact that they haven't makes me suspect that they don't presently have the cash.

Anonymous said...

Bill Bissett and Delaware North have cost us a fortune. They were chosen in October 2008 and confirmed that their financing was in place then. The state also confirmed that all three bidders had their financing in place despite the turmoil in the financial markets at the time. They defaulted and as a result have put NYRA and the best racing in the world in jeopardy.

Given these facts, the state could not choose Delaware North this time. Surely Bissett must know this.

El Angelo said...

Fisch sounds like the NY version of Inspector Javert.

Anonymous said...

Don't forget that while all of this is going on affecting Aqueduct, the clock is still ticking for the lights to be turned off at NYCOTB. It will be here before people realize.

Anonymous said...

Meanwhile, Alan, as a fellow hockey fan, how about commenting on a positive situation, i.e., the success of the U S hockey team to date? And the Rangers' Chris Drury? Or, are you holding your breath until the games are over?

Anonymous said...

Skeptics should check out NYRA website to see and hear pro NYRA testimony before a NY Senate committee on February 3rd. First up is a youth outreach rep from Elmont regarding NYRA involvement in the community.

Second up is Joe Dalton, long time head of the Saratoga Chamber of Commerce discussing NYRA and throughbred industry's impact on Saratoga County and the entire NY State economy. We went over much the same ground back at the time the franchise was up for renewal but how quickly we forget.

Mr Dalton also points out that it is the state now in default of the VLT contract and the fact that the state has lost possibly as much as $3 billion in revenue since the Aqueduct VLT's were first approved eight years ago. Of course both of these organizations were telling a pro-NYRA story but don't forget they also have the facts on their side.

Not at all the tune the pols are singing. Will it ever change? The frustration level with the state's continuing bumbling of the whole racing/pari-mutuel isssue has reached a new high. /S/greenmtnpunter

alan said...

>>Or, are you holding your breath until the games are over?

Yeah, well let's wait until after the game this afternoon, no score after one....

Anonymous said...

Queens Courier

Pheffer, Addabbo and Braton come out in favor of AEG:

'Mud’ slows Aqueduct VLT race in the stretch
BY VICTOR G. MIMONI - Wednesday, February 24, 2010

Local officials are defending Governor David A. Paterson’s decision to award the Racino franchise to local business group Aqueduct Entertainment Group (AEG), despite a virtual river of mud in tabloid reports following the announcement.

“It is imperative that New York State moves expeditiously to finalize the contract,” said Assemblymember Audrey Pfeffer in a statement calling for an end to eight years of delays, jointly signed by State Senator Joseph Addabbo and Community Board (CB)10 chair Betty Braton.

Aqueduct Racetrack, the eventual site of the 4,500 Video Lottery Terminal (VLT) facility – which will include a hotel, entertainment complex and shops under the AEG plan – is entirely inside CB10.
“We've roundly criticized the process; it’s not the best way to make this kind of a decision, but it's time for this project to move forward without any further delay,” Braton said. “The AEG selection meets our criteria and we can work with them,” she added.

“The potential economic development in southern Queens is needed now, not later. The state has to deal with its budget now, not later,” said Addabbo.

In their joint statement, the trio pointed out that the selection process is identical to the process set in motion by then-governor Eliot Spitzer, which failed when winning bidder Delaware North could not come up with a promised $370 million down payment before April 1, 2009.

“There was controversy then, as there is now,” the statement reads. “Yet no call for a special investigation or media attack was evident then,” it continues.

Pfeffer was one of three Democrats on “The Ad Hoc Committee on the Future of Racing in New York,” a bipartisan group established by former Governor George Pataki to recommend an operator for Saratoga, Belmont and Aqueduct racetracks, as well as the operation of VLTs at the tracks – first authorized in the wake of the terrorist attacks of September 11, 2001.

Spitzer dissolved the group, ignored any of their findings, and set up the system whereby he, the Majority Leader of the Senate and Assembly Speaker would choose an operator.

Assembly Speaker Sheldon Silver has announced that he will not sign-off on AEG’s contract until New York State Inspector General Joseph Fisch investigates the process.

“I think everything should wait until that information is available,” Silver said of the investigation being conducted by Fisch.

State Comptroller Thomas DiNapoli, however, is warning that not receiving the $300 million up-front payment from AEG before the end of the fiscal year would push New York’s current budget more than $2 billion into the hole.

Observers point out that since, in exchange for the payment, the state is supposed to float a $250 million bond issue to help finance the construction (with the interest paid out of VLT profits) further damage to the state’s financial picture could raise the cost of the bond issue.

A spokesperson for Fisch’s office declined to comment on the investigation.

Anonymous said...

Green Mountain -

Don't forget that Mr. Dalton is the primary reason why NYRA doesn't have video slots up and operating. He filed lawsuit against former Governor Pataki challenging the legitimacy of VLTs under the State Constitution. See, Dalton v. Pataki, 5 N.Y.3d 243, 835 N.E.2d 1180 (2005).

NYRA had, prior to the lawsuit, contracted with MGM to construct and operate the VLTs at Aqueduct. The lawsuit caused MGM to withhold proceeding until the outcome was assured. By that time, NYRA had a going concern problem and the rest, so the saying goes, is history.

Anonymous said...

Anon, I must confess that I don't recall the details of that episode at all. Why did Joe Dalton and the Saratoga Chamber oppose NYRA running the slots at the Big A? Saw it as competition to a longer season at The Spa? Or, NYRA would lose interest in The Spa once the VLT ATM kicked into high gear?

Over the years, the Saratoga Chamber of Commerce has been one of NYRA's staunchest supporters, through thick and thin. And, in turn, NYRA pays very close attention to Saratoga since The Spa City grew into NYRA's most popular meeting and biggest revenue generator. What is the rest of the story? Must be politics like everything else to do with NY racing? /S/greenmtnpunter

Anonymous said...

Alan- getting closer. I know, it's bad luck to even think about it. Russians looked awful against Canada....Canada looks to be peaking just right. So, against Slovakia in the semis, I would pick Canada. USA-Finland? A toss-up? Who is motivated the most? Remember USA had to beat Finland for the Gold in 1980, after first getting by the Soviets. Anyway, USA vs Canada is the Gold Medal match everybody wants to see. I know, better not say any more and jinx the deal. /S/greenmtnpunter