Exit AEG

Remember that Governor Paterson had, laughably, recused himself from the mess surrounding Aqueduct Entertainment Group that he helped to create. (And recusing sure seems to be a trend these days in the eternally conflicted capital.) So the announcement of the demise of the group's racino project was in the form of a statement issued in his name; and a terse and detached one at that.

“The Division of the Lottery has concluded that it cannot issue a gaming license to Aqueduct Entertainment Group.....Therefore, the state has officially withdrawn its support for AEG” to develop and operate the video lottery facility. [Bloomberg]

I can't imagine though that even Paterson couldn't help but roll his eyes shake his head when he saw was read the part about the next selection being "done pursuant to an expedited, transparent, apolitical, and publicly accountable procurement process." Of course, the process that led up to this latest failed selection was none of the above; had it been, perhaps the outcome would have been different. Nice of him to think of that now.

There seems to be some question as to whether the problem is that Lottery, as Paterson claims, cannot issue the license (not that the governor would ever lie); or whether they just don't want to.

An official at the lottery who spoke on the condition of anonymity said that the lottery division did not want to issue AEG a license because the structure of its partnership underwent continual changes since the group submitted its bid last May, including several changes just prior to a deadline to submit background materials on the partners on Tuesday. [Daily Racing Form]

Those last minute changes included the departures of Floyd Flake and Jay-Z; and Elizabeth Benjamin reported that those were the final straws.

"Such belated removals could not be expected during the ongoing (Lottery) investigation since they created the appearance that AEG was being allowed to conceal relevant information,” an official with the state Lottery Division said.

“AEG claims they’ve given us everything, but you can’t say someone is in one day and then when we want to see their (background) information, say, ‘No, they’re not in anymore. It doesn’t work that way.” [Daily Politics]

But, for one thing, by eliminating individuals with any possible issues - all investors with insignificant stakes as far as I've seen - wasn't AEG merely complying with the conditions set forth to it by Sheldon Silver? And what's really the big problem with two investors who owned barely over 1% combined withdrawing out of their own substantial self-interest in keeping their personal financial information to themselves (knowing the details would turn up in a Fred Dicker column before too long)?

OK, I know, now I'm sounding like a big AEG supporter again, and say what you will. I know, they obviously were not the most qualified. But at this point, I'm fed up enough to settle for qualified enough. The group was apparently prepared to hand over the $300 million and finally get this thing going. If Lottery can't license these guys over some minor stakeholders that are no longer even connected, how, in the case that SL Green/Hard Rock is up next, are they going to license an entity which is running blatantly illegal table games in Florida? And what will a likely AEG lawsuit do to the process?

And besides, do you want to see this thing go on for the rest of the year? While we've generally heard calls for a new winner to be selected from the losing bidders from this round, James Odato reports on Capitol Confidential that Paterson’s office said it wants to rebid the project and select a winner by Dec. 31, the governor’s last scheduled day in office. (!!)

That frightening statement is blind ignores the fact that NYRA is running out of money, and that the state is broke (though maybe Dick Ravitch has a plan to borrow money on NYRA's behalf).

It's funny - I recall when Paterson selected AEG, there was an initial report I read that it was all a clever scheme. The Assembly Speaker would reject the choice, thus putting the onus on the Senate Democratic leaders who persistently insisted on the group despite the obvious appearance of impropriety given the connection between Flake and Senator Malcolm Smith. And though it didn't quite work out that way, the end result was the same. However, the focus is all on the beleaguered governor instead of where it really belongs. Maybe if he wasn't foolish enough to have that ill-fated meeting with Flake, at a time when he was still delusional enough to believe he had a shot at re-election, that wouldn't be the case. Instead, it's Paterson who, again, ends up looking bad.

Of course, these days the governor looks bad compared to everyone around here. (Well....almost everyone.)