D-A-V-E GOV! GOV! GOV!

Governor Paterson was on the FAN this morning, and revealed himself to be a Jets fan with a prodigious memory of some of the (many) low points in the team's history. His recollection of Bruce Harper fumbling the opening kickoff in a 1981 playoff game against the Bills transported me back in time to Shea Stadium, where the team was playing its first playoff game in 12 years. I'll never forget the dead silence that descended upon what was until then a deliriously raucous crowd when Harper simply dropped the ball along the Jets sideline, and the Bills picked it up and ran it into the endzone. Oh man. A furious Jets comeback from a 24-0 deficit ended when Richard Todd was picked off in the endzone in the closing seconds of the game.

When asked for a prediction of Sunday's game in San Diego, the governor reluctantly picked the home team by "something like 17-14." Perhaps he was simply trying to demonstrate his independence from his advisor Bill Lynch, whose lobbying firm was paid $10,000 for its services by the team this past summer; that according to the Project Sunlight website.

Meanwhile, the Governor faces a comeback of his own in his fundraising for his re-election campaign. As alluded to in the last post, Paterson fared quite poorly in the last six months, and has just $3 million on hand. Andrew Cuomo is said to have more than five times that amount (his totals will be announced later today). The Paterson campaign provided the usual bravado.

"With rising poll numbers, growing recognition of his strong leadership in tough times, and a clearly articulated plan to rebuild New York, I share the Governor’s confidence that our campaign will raise what we need to win.” [Daily Politics]

But clearly, this governor is backed up on his own five yard line late in the 4th quarter, at least as far as the money game goes. His only hope in my view is to build enough support among influential African-American officials so as to dissuade Cuomo from running, or otherwise find a way to take him completely out of the game without resorting to illegal chop blocks.

Change of Tone

Almost two weeks after Governor Paterson said that he would take the initiative and pick an operator for the Big A racino himself in a week or so if a consensus amongst the three deciders, his spokesperson Morgan Hook told the Queens Chronicle:

“We have no announcement for today and have not offered a specific time for when an announcement will be made.....The governor cannot ‘declare a winning bidder.’ The winning bidder must be a consensus decision, selected by the governor, speaker and leader of the Senate.” [Queens Chronicle]

Well, that's a completely different tone, isn't it? I might speculate that perhaps he was advised that the talks were going particularly poorly, but that would be presuming that there were talks. One gets the feeling that the governor may presently be more concerned about his own cash issues.

However, while any outrage over the situation should be aimed directly at the state capitol, politicians there continue to use NYRA as their favorite whipping boy, a facile target with which to score points. Now, two state Senators are piling on and demanding financial records for their own little dog and pony show, in the form of a hearing in Elmont on Feb 3.

The letter to NYRA President Charles Hayward notes the senators’ surprise that NYRA needs money, given that it received $105 million from the state two years ago. [Capitol Confidential]

I wonder if the Senators are simply ignorant of the fact that, of that sum, $75 million was to pay creditors and just $30 million was for operating expenses to get NYRA through to slots time, or if they're merely and conveniently ignoring that fact. Look, I have no desire to become an apologist for NYRA, and it's up to them to demonstrate to their various inquisitors that they're barking up the wrong tree. And, being that these two members of the world's most dysfunctional legislative body want to probe "the ways in which the performance of our racing industry compares to the performance of similar enterprises in other states," maybe they'll learn a thing or two about the way that OTB has ravaged the industry here as in no other jurisdiction. However, this all reeks of political grandstanding and waste of taxpayers' money to me.

- A reader points out that Paterson's political advisor Bill Lynch, who, as we noted, is also a paid lobbyist for SL Green, was recently fined $10,000 for failing to disclose that his client Columbia University had increased its compensation by almost $400,000 (from $180,000 to $570,000) in 2007. And that's not all.

While in negotiations with the PIC over this infraction, Lynch.....revealed other discrepancies of which the commission had not previously been aware.

This, in turn, led the PIC to mandate that Lynch hire an outside monitor. [Daily Politics]

I wonder if the monitor is monitoring the obvious conflict between Lynch's role in the Paterson administration and his employment by SL Green.

- Here's NYC OTB's response to NYRA's objection to its bankruptcy (pdf file, via the Paulick Report). There will be a hearing on the matter on Jan 20. I have no further comment at this time; let the bankrupt organization's high-priced PR firm speak for themselves.

Delayed Reaction

I kinda just glossed over that item in Odato's column about Bill Lynch being a paid lobbyist for SL Green, and I really shouldn't have. I try to be fair after all, and I've been going on for months about Aqueduct Entertainment Group's ties to Senate President Malcolm Smith. But isn't this just as bad, if not worse?

I mean, the governor's political advisor is a lobbyist for one of the bidders? And not only that - it's the one that Paterson is said to be favoring? Are you kidding me? A couple of readers picked up on it, but I'm surprised that I haven't seen anyone in the press do so regarding such an obvious potential conflict. And we're supposed to believe that Lynch "doesn't talk to the governor about Aqueduct?" Seems to me that his political team talks to him about everything - what he says, how and where he says it, even how to look. But his top political advisor doesn't talk to him about Aqueduct, really?

Well, actually, considering how long this fiasco has dragged on and how horribly the Governor has handled it, maybe he hasn't! Of course, that's not the (entire) point anyway. If you make ethics the centerpiece of the year's legislative agenda (other than the budget) as the governor has done, you just cannot permit even the appearance of a conflict of interest, especially one as glaring and potentially significant as this one. Seriously, it's just mind boggling what goes on up there in the capitol sometimes. What are these guys thinking about? Are they thinking at all?

(By the way, Bill Lynch Associates has also performed paid lobbying duties for the New York Jets, 7 1/2 point underdogs in San Diego on Sunday.)

- In the 4th at the Big A on Wednesday, Count Her In (10-1) goes turf to inner dirt in her second career start, for trainer George Weaver. This is really mostly a guess. The probable favorite, Freud's Notebook (9-5), seems vulnerable; so I figure I could do worse than the morning line on this horse from a barn I like to follow. Count Her In ran quite decently in her debut, and her breeding suggests that she may prefer the dirt, as well as the distance. This is a three-year old daughter of Include, out of a Saint Ballado mare; solid Tomlinson and dosage numbers for distance, and quite a bit of stamina in the pedigree if you go back to third dam Bartlett North, a half-brother to the great Temperence Hill, possibly my favorite horse of all time. This is also the distaff family of the Jockey Cup Gold Cup and DC International winner Vandlandingham, and the CCA Oaks winner Funny Moon.

The Bigger Picture

- With nothing else worthwhile on their schedule during the winter months, TVG is all hepped up for its exclusive Eclipse Awards telecast on Monday night. Don't know how Todd Schrmmppff could possibly ramp up the drama anymore than he usually does; it might be a good idea to have some paramedics on hand in case he implodes. Of course, the rest of us might be fighting sleep after the nearly three hours (plus the hour pre-game show) of awards which nobody cares about which will precede the climactic Horse of the Year announcement at around 11 PM. I myself will be seeing Dinosaur Jr. at Brooklyn Bowl that night, but I'll be able to follow the action on Twitter (ha ha). There's been speculation that Zenyatta is not really retired, but I think she's just working out for her acceptance speech after she wins in a mild upset (and she probably has Peter Rotondo's phone number too).

The inimitable Chris McGrath of the UK's Independent hopes that, whatever the result, the sport of kings takes a wider view.

In refusing to run Rachel Alexandra on what they disparaged as "plastic" at the Breeders' Cup, her connections significantly retarded the American sport's painful journey towards a more humane racing surface. A year previously they had embraced the same gamble with Curlin - and done so pointedly, too, for the good of the sport. After his defeat, which may or may not have revealed him to be less formidable on a synthetic track, they got their retaliation in first with Rachel Alexandra. At the very moment when her story was beginning to intrigue a broader public, they vowed she would never set foot in Santa Anita and would instead reserve her Breeders' Cup debut for the dirt at Louisville in 2010.

In the no less regrettable absence of Sea The Stars, the great carnival faced a crisis - rejected by the champion three-year-olds of both Europe and America. And then along came Zenyatta, whose sensational performance turned everything on its head. Where the Breeders' Cup had seemed diminished by the absence of Rachel Alexandra and Sea The Stars, suddenly the reverse seemed true.

While it was undeniably a "home game" for Zenyatta, her connections had been just as bold as Rachel Alexandra's had claimed to be with Curlin. With a record unbeaten career on the line, she could have lapped her rivals in the Ladies' Classic. Instead, with the stakes at their highest, they took on all comers and showed the spirit of adventure required to overcome powerful vested interests in American bloodstock.

For now, the anguished schism between conservatives and pioneers will doubtless be replicated among Eclipse voters. Significantly, Jess Jackson, who campaigned both Curlin and Rachel Alexandra, has not even been nominated for Owner of the Year. But the big one will surely be close.

There will be an East Coast bloc, cherishing Rachel Alexandra as a modern great in the traditional theatre of dirt; and Californian voters will register their admiration for Zenyatta, a poster girl for the obligations they sense to the welfare of the breed, and the integration of its different cultures. Bystanders over here will be united in the hope that a majority bring themselves to see the bigger picture. [The Independent (UK)]

Tuesday Morning Notes

Churchill Downs' deal with NBC to televise six key Derby preps during the stretch run of the Derby Trail (with one of the programs to be on the USA Network) stands in stark contrast to the disappearing coverage of Breeders' Cup preps on ESPN, where horse racing vanishes into thin air once college football starts, with no telecasts during six definitive weeks of Cup preps from late August until October, at which point most of the participants have already been determined (and, increasingly, are already done racing until the big day). Recall that ESPN even stooped last year to sticking one race on its college football scoreboard show, and tried to make it seem like it was some kind of expanded coverage. While Churchill and NBC touts their successful "Big Event" strategy, the Breeders' Cup seems more like a nuisance to ESPN.

And, in fact, it was ESPN's reluctance to televise any Derby preps itself that led Churchill Downs to step in and take matters into its own hands.

Over the past decade, most television productions of major Derby prep races had been co-funded by the National Thoroughbred Racing Association's television production arm, and those broadcasts typically appeared on ESPN.

However, ESPN's commitment to racing in the spring has begun to wane as the network seeks out highly rated programming while seeking to shift lower-rated broadcasts to its Internet platform.
.....
Keith Chamblin, a senior vice president for the NTRA, said the association had not planned to reach any production deals with ESPN on the prep races, citing Churchill's involvement this year. [Daily Racing Form]

- Er, Mr. Governor, it's been more than a week (or so) now, what's up?

- Frank gets to keep his favorite toys.

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.

Sunday Morning Notes (Green Version)

OTB Hearing

NYC OTB Chairman Sandy Frucher, appearing at Friday's public hearing conducted by members of the state Assembly and Senate in Lower Manhattan, didn't take long to get to the yuks when, early on in his testimony, he declared that OTB had "succeeded" at its objective "To operate in a manner compatible with the well-being of the New York horse racing industry.."

Oh, really? And just exactly how has it achieved that? Yonkers Raceway VP and GM Robert Galtiero helped to fill us in on that in his testimony when he noted:

"Giving OTB our product, decimating our attendance base, destroying our revenue stream, requiring the tracks to seek relief from our heavy tax burden and, in a short time, looking for ways to keep OTB afloat."

That seems to sum the matter up pretty succinctly. Charlie Hayward noted that while NYRA "puts on the best racing in the country year round and gets $7.4 million from NYC OTB on its races, NYC OTB turns on the lights, turns on the TV sets, opens the pari-mutuel windows," and receives $39.4 million. I'd like to hear Mr. Frucher elaborate on just how that is compatible with the well-being of the sport.

Funny that the abovementioned portion of Galterio's testimony did not stop NYC OTB's PR representative, David Vermillion of Edelman, from sending out an email entitled Yonkers Raceway Testimony Supports NYC OTB Plan. A couple of points here before I move on: How is it that an operation which has filed for bankruptcy and is threatening to lay off "over a thousand workers" in a few weeks can find the money to hire a fancy public relations outfit?? Seriously, there oughta be a law! And secondly (and rather hilariously in my view), Vermillion and Edelman also once handled PR for Empire Racing. This guy is obviously not very selective about the quality or ethics of his clients; at least as far as I'm concerned.

Indeed, Galtiero did state that Yonkers Raceway wants OTB's bankruptcy plan, which includes a new formula which would slash, by approximately 50 percent over the first two years, the already meager payments it would make to the industry, to succeed (this in contrast to Hayward, who labeled it "preposterous.") Of course, unlike NYRA, Yonkers has slots and can therefore afford to take a short-term hit in the hope of profiting down the road from a revitalized OTB. Recession be damned; business at the Empire City Casino at Yonkers Raceway incredibly continues to thrive; it's virtually a straight line upward since it opened its doors in October of 2006, check it out (pdf document). In fact, the week ended Jan 2 was easily the biggest week in its history, with a net win of nearly $12.5 million. Figure they retain roughly a third of that, and I'd imagine that any change in Yonkers' share of the OTB revenues from its harness racing operation is almost immaterial by comparison.

That's indeed not the case for NYRA, whose financial woes are well-documented, or the horsemen. NY Thoroughbred Breeders Association president Jeff Cannizzo noted:

““This accounting trick will dramatically reduce revenues to those who are at the heart and soul of Thoroughbred racing, remove OTB accountability, and create a death spiral for an industry that employs tens of thousands of New Yorkers,” [Thoroughbred Times]

Aqueduct Friday

In the third at Aqueduct, Gentle Edwin (7-2) goes second off the claim for trainer Cody Autrey. This four-year old gelded son of Trust N Luck was moved smartly up in claiming price in his first race for Autrey, and won with a career high Beyer of 82 in what was his first dirt race around two turns. This barn is hitting at 34% (20 for 58) in the second-off-claim category, as compared to 21% first out over the same period, so perhaps further improvement is due, with David Cohen (30% for this trainer) aboard. This rich Starters Allowance is a chance for connections to make hay on this horse, claimed for 15K. African Diamond (3-1) is two-for-two in two turn dirt races, most recently in a short field at the Meadowlands for the live Bruce Brown barn. Looks like the likely winner should he run back to his win in open 35K claimers at Saratoga in August. I'll use him in exactas with the top choice with the morning line favorite El Tamberito (2-1) looking vulnerable in his first start around two turns; and the recent good form of Coach Gravy (7-2) having come over synthetic surfaces.

NYRA To Court: Throw the Bums Out

NYRA's motion in the U.S. Bankruptcy Court in the Southern District of New York to throw out NYCOTB's bankruptcy petition is a two front assault - a highly technical and legal argument that OTB is not eligible to file for Chapter 9 protection; and a more subjective and skeptical view of its motivation to do so. And it would seem as if NYRA got its moneys worth (though the Comptroller will no doubt want to know where it came from); the citations of precedent-filled 23 page filing by the law firm Weil, Gotshal & Manges systematically and meticulously seeks to shred OTB's contentions to pieces on both counts.

I won't go too far into the Chapter 9 argument, which is far beyond my pay scale. Suffice to say that it lays out the criteria required to achieve such protection and, other than accepting the fact that NYCOTB qualifies as a "municipality," proceeds to explain why it fails to satisfy each of the other required precepts. A couple of key points: NYRA contends that legislative action is necessary for OTB to file for Chapter 9, and that Governor Paterson's Executive Order which specifically authorized it to do so is invalid.

Critically, however, there was and is no statute that empowered Governor Paterson to authorize — pursuant to Executive Order or otherwise — NYC OTB to file for bankruptcy protection under chapter 9. Therefore, the Executive Order could not provide the express written authority required for NYC OTB’s chapter 9 filing.

NYRA also claims that OTB did not, as required, negotiate with its creditors prior to the bankruptcy filing, disputing its claim that such negotiations were "impracticable" (impossible to do or carry out). NYRA argued that OTB's creditors were neither too difficult to identify (in fact, the entities that NYC OTB considers its principle creditors are statutory distributees, like NYRA..), and that such negotiations would have posed no risk of significant loss of NYC OTB's assets.

More interesting to me is NYRA's second line of attack; the notion that the filing was not made in good faith, and was rather "merely a tactic" to, among other things, delay further payments to creditors (payments which, as it notes, are statutorily mandated, and, as it does not note, are desperately needed by an entity fast running out of cash); and that OTB has no "reasonable prospects" for a reorganization.

First, NYC OTB’s business plan hinges on the State legislature’s “swift and decisive” action to modify the legislative distribution scheme..

That has to be by far the most self-explanatory statement in the entire filing; and perhaps a veiled swipe at Albany's failure to name an operator at the Big A. And here, in this section, lies the crux of the whole matter, and what was likely the main impetus behind this whole action - the fact that OTB is seeking to have its already low-by-comparison payments to the industry reduced even further.

Second, the most critical of the legislative changes NYC OTB seeks is modification of the legislative distribution scheme to allow NYC OTB to pay its operating expenses before it calculates its mandatory distribution to the State horse racing industry, as well as State and local governments (i.e., payment on the "net" rather than the "gross". However, it is likely that, if distributions are made on percentages of revenue after NYC OTB satisfies its hefty overhead costs, there will be insufficient funds to distribute to the State horse racing industry.

Ironically, this could put the State horse racing industry out of business, which would, in turn, put NYC OTB out of business. This result casts doubt on NYC OTB’s ability to “effect a speedy, efficient reorganization on a feasible basis.”

(Sarcasm here was not added by me.)

Finally, NYRA contends that OTB did not consider its alternatives to a bankruptcy filing, and saves one of its most effective points in my view for last.

For example, NYC OTB intends to incur $250 million of debt to finance its reorganization. However, it is unclear why, prior to coming into bankruptcy court, NYC OTB did not use its authority to issue bonds to raise revenue to pay its obligations, fund operations, and grow its business. NYC OTB's failure to make such an effort to raise revenue before filing points to its lack of good faith in this proceeding.

What would OTB chairman Sandy Frucher say about that? Perhaps he'll return Matt Hegarty's call and explain. And while he's at it, he can tell us what happened to his statements of this past September, when he spoke in far more profound terms then the simplistic survival plan of simply paying less to the industry which is OTB's lifeblood, actually questioning the dysfunctional structure of OTB in the state.

"There is no reason, candidly, to have seven totes, more than seven totes. Every track has its own tote. Every OTB has its own...it’s done seven times and it has to be done identical."

"It really comes down to a bit of redundancy. I mean, how many presidents of OTBs do you want to pay for?"

Grand Finale

It's funny how things work out in life sometimes. My mom decided that we would sit shiva for my dad through sundown on Sunday. So wouldn't you know that NBC would "flex" the starting time of today's climactic Jets game to 8:20 PM. So, early this evening, my brother, three of my nephews, my stepson, and I will make our way to the frozen Meadowlands for what should surely be the final game at Giants Stadium.

It all seems fitting, and brings far more than just this season, and this past sad week, to a conclusion. My dad became a season ticket holder in 1964, the team's first year at Shea Stadium; from Section 15 there, we were transferred to Section 216 at the Meadowlands, practically in the same exact spot relative to the field. And though we are retaining two seats at the new stadium, tonight will be the final time that the family will be able to attend en masse and all sit together. It will be a strange feeling for many reasons, not the least of which is the fact that the wind chill factor is forecast to be seven degrees. (The way I remember it, there once was an unwritten rule that night games - even 4 PM games - were not scheduled in cold weather cities late in the season. This little bit of civility and consideration went out the window when the Pats hosted the Raiders in a playoff game in a snowstorm on a Saturday night in 2002. We've all been fair game since then.)

A truly heartfelt thanks to all of you who wrote in to express condolences (and I will get around to responding individually to those of you who emailed). I'm planning to resume regular posting this week, a time during which we're told that Governor Paterson will step to the plate and name an operator for the Big A. Ha ha, we'll see.

A Mann Amongst Men

My dad, Norman Mann, passed away early Monday morning after an all-too-short and futile fight against lung cancer, an unsparing, undiscriminating, relentless and utterly merciless disease; truly a terrorist right here in our midst. My dad had been as healthy and robust as a 79 year old man could be, yet he was no match for this insipid sickness. Still on the golf course as recently as this past summer, he was reduced to utter helplessness and confusion in a matter of months. Seeing him relegated to that state over the last few weeks has been the most difficult experience of my life. Fortunately, we were able to console ourselves somewhat with our success in bringing him home from the hospital on Christmas Eve. There, he was far more comfortable and died in relative peace (content, we hope, in the knowledge that the fortunes of his beloved Jets have been miraculously and fortuitously revived, and mercifully spared from enduring the disappointment which is sure to come on Sunday).

The expected relief from the knowledge that he is tormented no more has yet to supplant the sadness of his passing. We grew apart during my stupid teenage years (which ran well into my 20's, a common affliction as I've learned of late). But though we grew closer over the ensuing years, I feel like we were still getting to know each other, and that I could only have grown wiser and kinder from having done so.

My dad leaves Honey, my mom and his wife of 57 years, his adoring family (including nine grandchildren), and a huge throng of friends. He was loved for his kindness, extraordinary generosity, perpetual good spirits, and his keen sense of humor. We already miss him greatly.

Thanks as always for dropping by the blog, and here's wishing all of you a happy, prosperous, and, above all, healthy New Year. Speak to you again soon.

NYRA Vs. The Comptroller

Personally, I don't recall NYRA ever claiming to be "financially stable," as Comptroller Thomas DiNapoli claims in demanding to see its books. I could have missed something of course, but why would it ever say that? And why would the mainstream press, both industry and otherwise, merely accept such a statement without making any effort whatsoever to confirm or dispute it (especially when it doesn't seem to make any sense)? I haven't seen a single reporter follow that claim by writing either something like: "In July, Charles Hayward issued a statement saying that NYRA was on solid financial footing;" or "DiNapoli's claim seems unsubstantiated based on NYRA's public pronouncements." That's just lazy reporting to me.

Regardless of what NYRA may or may not have said, you and I know of course that the state has been well aware that NYRA's solvency was on a timeline, and that it would not be financially stable until slots were up and running. Why else would the state have promised to provide funding to NYRA for its operational needs if a casino at Aqueduct was not up and running by the end March 2009. [DRF] In March, following the collapse of the Delaware North deal, Hayward said that NYRA would be fine though the third quarter of 2010. The latest warning comes a little earlier than that, but so has business continued to lag, not to mention the $14 million owed to it by NYCOTB.

To me, this reeks of an effort by the state to take the focus off of its pathetically shameful failure to name an operator at the Big A. And while Steve Zorn thinks that NYRA is mistaken to take on DiNapoli in his fine analysis of the situation, I don't blame the association for telling the Comptroller to take a hike. DiNapoli, remember, is just a politician who was strongarmed into the position over far more qualified candidates by an Assembly flexing its muscle against a crassly domineering new governor. And when a politician starts spewing recycled meaningless crap like "It's the same old NYRA in new sheep's clothing," then he or she is probably up to something. Financial records can be subject to misinterpretation by politicians who know nothing about the industry or how it operates, especially one with an agenda, which certainly seems to be the case here.

The Day After

Hope everyone had a great holiday. Not so great of a day-after at the Big A; a gloomy grey and wet day with a lot of rain already having fallen last night. Sloppy and sealed seems a certainty.

So let's take a peek, and a shot, out west. In the Malibu at Santa Anita, Coronet of a Baron (20-1) looks like a live longshot to me in a wide-open race filled with horses with ample reason to stand against. This son of Pure Prize started his career with great promise in 2008. Plucked out of last year's Ocala sale for a healthy $550,000 (this for a horse by a $12,500 stallion), he won his debut handily before plunging directly into stakes competition. A second (by DQ) in the Best Pal was followed by his nose loss to the highly regarded Midshipman in the G1 Del Mar Futurity; and a third in the BC Juvenile Turf. Coronet of a Baron got off to a slow start in 2009 with two disappointing allowance efforts at Del Mar.

But trainer Eoin Harty took the blinkers off at that point, and improvement has ensued. Cutting back to a sprint and making his Pro-Ride debut at Santa Anita, he won an allowance, and then ran 4th in the 7 furlong Damascus stakes after a sluggish start from the rail post. Despite taking the long way around the field turning for home, he finished just 1 1/4 lengths behind the rail-skimming Smart Bid, who will go off at far shorter odds than he today. He's been off since that Nov 7 effort, but has not been idle, with six recorded workouts since that time as Harty points his colt towards this race. Further improvement will be needed, and this barn has hit a cold patch, not only 0 for its last 16, but no in-the-money finishes in that time. But the odds make him worth a wager in this spot.

13 horses but not a ton of obvious early speed; so the speedy M One Rifle (5-1) figures to have an uneventful trip to the top from the outside post. The aforementioned Smart Bid (6-1) won that race fresh off a seven month layoff for trainer Graham Motion, and also hasn't started since. Figures to need to cover more ground today from the 11 post. Misremembered (4-1) seems the class here for Baffert with two G2 wins and his narrow loss in the Clark last month. But it's his first-ever try at a one-turn sprint, and that makes him an automatic throwout as the favorite in my view. Similarly, the trainer's Mythical View (8-1) was a dominant winner of the Lone Star Derby in his last start, in May; but has never won around one turn. Ditto for the overrated Papa Clem (6-1). Supreme Summit (8-1) is an in-and-outer; he was "in" in his second in the Damascus, close today on his best try. Hunch (10-1) is unbeaten in two starts, the latest over a four-horse field of decidedly non-stakes quality; a lot to prove here. Square Eddie's (15-1) better days are behind him, or so it seems. I'm really not enthralled by any of the horses considered to be the top contenders in this race; will stick to a simple win-place wager on my top choice. Best of luck and have a great day.

Tuesday News and Notes

I was far too depressed after the Jets game on Sunday to bother watching races when I got home. And when a reader (and fellow Gang Green sufferer) alerted me to Blind Luck's win in the Hollywood Starlet, I merely babbled unenthusiastically about synthetics and her having an uninspiring pedigree. But seeing is believing as they say, so check it out if you haven't already. Vic Stauffer almost fell out of the booth as she quickly bolted away from the field in the stretch. She came home in 30.52 seconds for the final 2 1/2 furlongs (a pretty good time, but perhaps an indication that there was an illusory element to her dominance attributed to the others tiring after a quick pace), and earned a Beyer of 93; that as opposed to the 83 earned by Lookin At Lucky on Saturday. (Though I wouldn't jump to any conclusions given the drastically different paces in those races...and we've seen how meaningless these figs can be on the artificial stuff anyway.)

Blind Luck is the only graded stakes winner for the first crop sire Pollard's Vision, currently ranked #3 on the rookie stallion list (with this filly accounting for roughly half of his $1.4 million earned). Here's one stallion whose stud fee is actually holding steady for 2010, at $10,000. About that pedigree, a speed-favoring dosage of 5.22; and the only familiar name under the first three generations of her distaff side is Chas Conerly, a popular sprinter in the early 80's here who won the Fall Highweight when it was a Grade 2 stakes. You have to go back to her sixth dam to find classic names such as Honest Pleasure and his full brother For The Moment (plus that dam herself, the Irish Oaks winner Suntop). Still, we can certainly look forward to her next start, perhaps in the Las Virgenes in Feb.

Discreet Picks emailed me about Tiz Chrome, who won a 6 1/2 furlong two-year old stakes on the Cash Call Futurity undercard (and has now won on dirt and synthetic in two career starts). Baffert also trains this one, and he called him a "pretty serious horse." Tiz Chrome earned a Beyer of 97. He's by Tiznow out of a Woodman mare (in turn out of the Grade 1 winner Fantastic Look). who's a half-sister to the G1 (turf) winner Designed For Luck.

Baffert also unveiled Clutch Player on Saturday, an impressive winner in his debut, also earning a 97 Beyer. This is a two-year old son of Malibu Moon, out of an unraced Awesome Again mare. And the barn had a 4th juvenile winner on the day in Quiet Invader, who ran a virtually identical time to Clutch Player, but yet earned a Beyer of only 85. If someone can please explain that to me I would appreciate it.

- According to the New York Times, Steve Wynn was the anonymous buyer of a painting by Rembrandt for a record $33.2 million at a Christie's auction in London last week.

This time around Mr. Wynn has gone quiet. Reached by telephone on Thursday, he said only, “I’m not discussing it, I’m not acknowledging my paintings anymore.”

On Dec. 8, the day of the auction, though, Mr. Wynn called several old-master dealers and Rembrandt scholars to ask their opinion of the work, “Portrait of a Man, Half-Length, With His Arms Akimbo” (1658), experts said. [NYT]

Maybe the reason he withdrew from the Aqueduct bidding was so that he could invest his money more wisely in this way. And perhaps he'll be more careful with this one.

Charlie Changes His Tone

A couple of weeks ago, Charlie Hayward told Paul Post of the continuing delay over the Big A racino: "I don’t believe it’s a crisis." He was referring to the fact that NYRA is supposed to receive an upfront payment from the winning bidder to cover any gaps in its operating budget (though the exact nature of that payment is subject to negotiations).

However, the NYRA CEO's comments have been more dire (or at least have been portrayed that way by his interviewers) in subsequent articles, emphasizing the fact that the association may run out of money and have to close after the Aqueduct spring meeting. And in today's Daily News article, Hayward resorts to the most drastic threat in his arsenal.

"If we can't make payroll, we have to shut down. There is certainly a possibility that Belmont may not open and there will be no third leg of the Triple Crown."

That's the kind of headline-making assertion which I've already seen picked up in articles elsewhere. Hayward is, I'd surmise, being a bit dramatic here in an attempt to move things along; assuming, that is, that NYRA really is in line to receive a life line from the winning bidder as soon as it is chosen. However, given the state of the negotiations as portrayed in the DN piece - somewhere ranging between nowhere and nonexistent, to be precise - maybe he's not.

A legislative source said the "sails went flat" on Aqueduct talks after leaders agreed on a budget plan.

"The Assembly was amenable to more than one bidder, but the Senate was at loggerheads with the governor," the source said.

Spokesmen for Silver and Sampson say the ball is in Paterson's court. "It's really the governor's office that's running the whole process," Silver spokeswoman Melissa Mansfield said.

A source with knowledge of the deliberations (or lack thereof) informs me that Governor Paterson is "very upset" by the Daily News story; specifically, regarding the above criticism of his office's role in the stalemate. Some feel that his general counsel, Peter Kiernan, has favored SL Green all along and has "manipulated" the process. Paterson, I'm told, insists that he alone will make the decision, that he does not favor one bidder over another, and that he is merely trying to get all the parties to agree.

If that's the case, then the governor should consider my suggestion that he demonstrate the same kind of leadership and assertiveness that he has in his recent dealings with the legislature on the budget (not to mention in his recent and frequent appearances on local and national TV and radio in an attempt to bolster his re-election chances), and make that decision, announce it publicly, and put the pressure on the other two to agree, or to tell us all why they don't.

Snow Day

Hope everyone is having a nice and productive run-up to the holiday. Sorry for the lack of posting, but it's a busy time as you know. And besides, what is there really to write about? NYRA has been dark all week, and will continue to be so until the day after Xmas. (Yeah, I know, there was that big Derby prep yesterday (gimme a break).) Not that there would have been any racing today anyway given the snow. Amazingly, the Big A is open for simulcasting, even today with the snow piled pretty high - looks like some 8-10 inches where I am in Queens. Anyway, unfortunately, in addition to the holiday merriment, an ongoing family matter is cutting into my blogging time, and will continue to do so for the immediate future; so please excuse in advance what will likely be some light blogging for awhile.

Us Jets fans have learned to live with low expectations. Having a meaningful home game in December is always a reasonable goal to set when the season starts in the heat of the late summertime. At 3-0, that seemed more of a likelihood than a dream; at 4-6, more like a pipe dream. But what do you know, three consecutive wins later, and here we are, set to dig out the car and make our way to the Meadowlands for a big game against the Falcons. Who woulda thunk? So, whatever you're up to today, be it shopping, cooking, football watching, or the late double at the Fair Grounds, best of luck, be safe, and have a fantastic day.

Shinnecockypop

- With the news that the Shinnecock tribe has taken a huge step towards federal recognition, a reader emailed: "Who fronts $200 million for Aqueduct knowing that the tribe could put up a full casino in NYC area tomorrow?"

Good question, though it won't quite be tomorrow. While recognition is virtually assured, a public-comment period of up to six months must be held before the final order is issued. [NYT]

In addition, while federal recognition by itself entitles the tribe a build a Class II (slots only) casino on their reservation on eastern Long Island - a concept which has generated fierce opposition from the local communitythe tribe has now ruled out, additional negotiations with the feds and the state will be required for a full-blown casino located outside of the reservation; that due to a a Bush administration decision that Indian casinos must be within commuting distance of reservations - or 75 miles - so that Indians would be able to work there. [Newsday]

Nonetheless, one state senator already wants to start the process towards the inevitable casino at Belmont.

State Senator Craig Johnson, a Long Island Democrat whose district encompasses Belmont, said the state should immediately begin serious talks about the issue.

“The first topic I want to discuss is how Belmont fits into this,” he said. [NYT]

Newsday reported that Johnson wrote to Governor Paterson asking that discussions begin on the feasibility of adding a casino at Belmont Park.

A little Googling led me to The Verifiable Truth, the long-running blog which has followed, in quite fastidious and critical fashion, the exploits of the Detroit casino magnates Marian Ilitch and Michael Malik for some time. Their Gateway Casino Resorts is the financial backer of the tribe; and that's a whole other subject which I'm sure we'll be hearing, reading, and writing about should a project at Belmont move towards fruition. In a post dated Oct 12, verifiable links to a campaign filing [pdf] which shows that Malik contributed $2500 to the Friends of Craig Johnson last February. Pretty funny the way the Michigan address stands out like a sore thumb amongst the almost exclusively local contributors. Just thought I'd point that out.

Of course, the Shinnecock decision has been expected since the Obama Administration took over, and should come as no shock to the Aqueduct bidders. Still, it may very well change their perception and send the accounting staff back to their spreadsheets. Maybe they'll be the ones to request a change in the rules this time?

- A couple of polls released on Tuesday contained some mixed news for Governor Paterson. He showed improvement in his approval ratings - to varying degrees between the polls conducted by Siena and Quinnipiac University . Remarkably, according to the latter, his job approval rating is up to within nine points at 40-49 approve/disapprove; with his favorability rating up to 38-46 from 28-52. The governor continues to be highly visible; and in an appearance on CNBC on Monday, I found him to be assertive and in confident command of his facts. He has obviously worked hard along with his political team to rehabilitate his image, and, with help from the Senate, has made big strides in my view.

However, he remains well behind Andrew Cuomo (60-23) in a possible primary matchup.

“It’s strange,” said Bill Montfort, chairman of the Warren County Democratic Party. “It’s strange that he keeps pressing on. But hey, you know, Spitzer thinks that he can make a comeback, too. I don’t know. I have no idea. Nobody’s committing to anything, even Andrew isn’t saying anything. Nobody’s committing to anything because they’re waiting to see what this guy does, and he keeps going forward.”

“He thinks he can turn this around,” said Democratic consultant Hank Sheinkopf. “But look at Andrew Cuomo’s numbers. How does he even get close?” [New York Observer, interesting piece]

Paterson's best and only hope is Cuomo not running altogether. The Qunnipiac poll also showed that the governor now has a 41-40 lead over Cuomo amongst African-American Democrats. That compares [to] Cuomo’s 51-24 margin over Paterson in October’s Quinnipiac poll. And though a spokesperson from the school qualified those results as being based on a small sample, if the governor can establish a clear advantage in that category, and pick up some enthusiastic endorsement from black leaders (other than John Sampson), perhaps the AG, recalling the hard feelings generated by his primary run against Carl McCall in 2002, would have second thoughts.

Hunch Bets for Wednesday, Dec 16

Indian Joy 8th at Penn National
One Man To Beat 8th at Tampa Bay
I'm A Numbers Guy 5th at Penn National
Play The Market 9th at Beulah Park
Book Value 3rd at Penn National
The Lady Waffles 8th at Tampa Bay
Rejected 6th at Tampa Bay

No Problem Mon

There is quite an interesting, if not possibly revelatory, assertion by Charlie Hayward in the story by Paul Post in The Saratogian (and actually originally in the Thoroughbred Times). While conceding that NYRA will run out of cash by the time racing shifts to Saratoga next summer, Hayward claims that NYRA is entitled to a share of the up front payment by the eventual winner of the Big A racino sweepstakes. "I don’t believe it’s a crisis," he said of the continuing delay. I've not heard that before.

That would lessen some of the drama surrounding the fiasco, because, certainly, the selection will be made in time for the payment to be made by June or July. Right? Huh? I mean, for sure, right? In fact, the money is included in the deficit reduction plan for the budget year which ends on March 31. [Senator Joseph Addabbo, the creep whose early 'no' vote help send the gay marriage bill down to its ignominious defeat, expressed doubt about the timing:

Once an operator is selected, it will take 60 days to work out a memorandum of understanding and another 30 days to transfer cash to the state, Addabbo said. “We risk not realizing the $200 million this fiscal year if a decision isn’t made soon,” he said. [Thoroughbred Times]

But where Hayward's optimism starts to fray is here:

A set amount hasn’t been determined and is subject to negotiation.

Good luck with that. You probably recall past standoffs between NYRA and the state when the former was on the brink. I imagine that, as then, NYRA would be presented with conditions at which it would balk, perhaps including another look at those benchmarks that a reader mentioned the other day.

Having said that though, the $30 million that NYRA got when it emerged from bankruptcy in September 2008 will have lasted 20+ months by summertime, so it shouldn't take too much cash to get it through to the time that slots go live. Assuming of course....

- The upstate Times Herald-Record reports that not only is the construction of Louis Cappelli's Concord project stalled, but his accounts payable department is too.

Some 19 contractors are owed $18.3 million for steel, architectural plans, engineering, environmental studies and demolition work for Cappelli's Entertainment City project, according to public records....."We have continually sent invoices and they are just not interested in paying.." [Recordonline.com]

As you may recall, Cappelli was relentless in his determination to press on despite the financial crisis. But it proved to be too much, and a brain aneurysm that Cappelli suffered in July certainly didn't help.

Interesting note in the abovelinkedto article about Cappelli claiming to be negotiating with Penn National....to join him as a full partner. That company is of course one of the Big A bidders, and one which, for several reasons, makes sense to me. (Though not to Representative Audrey Pheffer, who finds their plans "a little too boxy, unimaginative and not too exciting.” [Queens Chronicle]) A deal with Cappelli might not be a bad consolation should they not get Aqueduct. They're certainly in position to negotiate favorable terms, and remember that Cappelli won a 75% cut of VLT revenues at the facility.

- I linked to an article in the Queens Chronicle a few weeks ago which contained a quote attributed to NYRA's marketing director Dan Silver for which I called him out for being insensitive to the vendors at the Big A Flea Market. He wrote to inform me that he was "heavily misquoted," and that he would never be that much of an asshole. And it's true, I've met and dealt with him, and he's a nice guy who's done a fantastic job since he took over. Should have checked with him first.

Aqueduct Sunday

Cody Autrey is at the Big A for the winter. The leading trainer at Delaware Park this year, Autrey is a regular at the Fairgrounds and on the Kentucky circuit. But, prior to this month, he had never started a horse at a NYRA track in the last five years, according to Formulator. He's a welcome addition to the claiming game here this winter, especially with Scott Lake apparently sitting it out this year. You've certainly noticed him if you've followed the racing the last two days - he has three winners in a row, and he's 4-1-1 from eight starters since racing switched to the IT.

In the first today, Autrey moves Regents Ridge (3-1, part of an entry) significantly up in class, from a conditional 25K claimer at Delaware to this open 35K affair. On Friday, the barn scored with Gentle Edwin ($14), moving him up from a 15K NW3 to one for 25K (that one first off a claim). This horse looks like possible lone speed here, both on style and Moss pace figures. He's been a bit faint-hearted in his last two, so I'd be wary at odds lower than his morning line, but I like the confident move up the ranks, and I think he could very well control matters should he break free. Desert Falcon (4-1) is another one taking a step up; this one, off a claim, for trainer Peter Kazamias shipping in from the Meadowlands. Nice form of late, and he was moved up to win his last by his prior barn; should be running at the end and could catch the top choice should he falter again.

In the third, Autrey takes the opposite tack, dropping Thenputitback (4-1) to the 10K ranks after claiming her for 14K at the Meadowlands. Some recent precedent here too - he won with Kid Freud ($4.70) off a similar maneuver on Friday. She's another one with some quick early foot, and though she may get some pressure here, I consider those possible challengers- Maggie's Miracle, She's Smokin' Hot, and even the ML favorite Iberian Gate based on her present form - to be a bit cheaper. And note how she battled gamely to the end in her races two and three back. Good luck, have a great day, and Go Jets!

Aqueduct Saturday

In the second, Wall Street Wonder (4-1) makes just his second career start on dirt, and his first for trainer John Terranova (44% in the turf to dirt category). His one dirt effort was a 12 length defeat; his next biggest margin of defeat in his ten race career was four. But he could hold a speed and class edge in an interesting entry-level open allowance. His one dirt race was in a Grade 2 stakes at Calder, where he flashed excellent speed with Moss pace figures that far outrank his competitors here; and that after a stumble at the start. He succumbed after dueling on the front end with Prince Joshua, who won the Select Stakes at Monmouth in his next start, and then, after two throwouts in the slop at Saratoga, ran a close second in a FL-bred stakes at Calder with a Beyer of 103.

Wall Street Wonder is by City Place, a Storm Cat sire (remember when they were all the rage?) standing in Florida. Though the stallion stands for just $5,000, this colt sold for $325,000 at the Barretts sale in March 2008. So I surmise that he must have been pretty impressive over the dirt surface at Fairplex Park. Looking for him to outbreak and outclass a field featuring three NY-breds out of state-bred conditions (one off a 21 month layoff) and a maiden graduate from Philly Park.

- The Toddster keeps rolling along; another winner on Friday - Every Little Thing ($5.20) in the finale - gives him a three in a row here; and he's been in the money with his last 12 (8-3-1)!

Dear Governor.......WTF??

Governor Paterson was in Queens on Wednesday, and when asked about the Aqueduct racino, he said:

“I am willing to take what ever choice that the other two can arrive at because we need the money and we need to start generating work and opportunity right here in southeast Queens." [Queens Chronicle]

Now, c'mon governor. As you no doubt know, I'm one of your biggest fans. I've praised you for consistently and loudly sounding the alarm on the deficit from the moment you took office, for showing leadership in your dealing with the Senate, and for properly taking matters into your own hands when appropriate. And, on top of all that, you're a fucking pisser too.

But what really is the story here? You've shown no hesitation in acting unilaterally when it was called for. You moved to withhold Senators' pay during the coup stalemate, and appointed a lieutenant governor even though everyone, including the state Attorney General (in extremely adamant terms), said that you didn't have the constitutional power to do so. You told the legislature that if they couldn't agree to the measures necessary to close the deficit, you would do it yourself. And now that they indeed fell short of your goal, you've declared that you're indeed going to withhold payments from localities, including schools.

"I will probably be sued for this, but I will not let New York state run out of money on my watch...." Paterson reiterated that he would unilaterally hold back the funds because the state is about to run out of cash and shouldn't borrow money from other accounts to make payments to counties, municipalities and school districts. [Times Union]

So I don't understand what exactly is going on here. Is there something we don't know? The state is so desperate you say, literally on the verge of issuing IOU's and having its credit rating destroyed, that you are resorting to measures you know may be unconstitutional. But when it comes to Aqueduct, you'll "take what ever choice that the other two can arrive at?" What the fuck is that? I know of at least one bidder that is willing to write the state a check for $300 million tomorrow. So why is it, in this case, that you haven't taken charge? Why don't you tell Shelly Silver and John Sampson who you want!? And then, tell the public too, explain your reasoning behind the choice, articulate once again the dire importance of the up front cash and continuing cash flow. Then (assuming, of course, that you pick the bidder who you honestly and objectively, free from politics and influence, feel will be of most benefit to the taxpayers), should they not go along (and why, really, if they truly have the state's best interests at heart, would they not?), let those bozos be the ones to tell the voters why they are costing the state a million dollars a day!

Top 20

Thanks to the reader who sent along this link [PDF] to a bankruptcy court filing by NYC OTB which lists its Top 20 unsecured creditors. And it's not NYRA, but rather Yonkers which leads the way with over $18 million in Shift Settlement, Host Fees, Commissions, Maintenance of Effort, & Contractual Fees.

NYRA is close behind at $14.7 million, a material sum which would no doubt come in handy with the association's cash dwindling as the slots fiasco drags on with no end in sight. There's been no news at all, and not a peep from the grapevine. You never know, but at this point, I'm not expecting anything to happen before the 2010 session of the legislature which commences in early January.

OTB's filing lists NYRA's contact as Charlie Haywood (no relation to Spencer). I mean, really, how about just a little professionalism here.

Monticello and Finger Lakes are also on the list; NYC OTB owes almost $40 million to the state's tracks and another $1.8 million to the breeders. It owes the state and city around $12 million in taxes/pension obligations/fees. Somehow, it comes as little surprise that despite the fact that the in-state tracks are owed far more money than the government (and not to mention that they supply the product which is the basis of OTB's business), it is they who OTB proposes to cut payments to going forward. There are some out-of-state tracks and a few pending lawsuits too. But I don't see this guy on the list.

- A rumor briefly swirled around this comment section regarding Joe Bruno being stripped of his box at Saratoga; but sources at NYRA said that's not the case (though it was added that final decisions on boxes for next summer will be made in the second quarter). Here's a wild guess that should the former Senate Majority Leader retain his box, he would not be the only convicted felon sitting in the area.

- I hope you hung on to those Save The Train to Belmont signs. Big trouble at the MTA with the commuter tax designed to bail it out coming up about 20% short of the mark, which was $1 billion. Whatsmore, another $143 million was cut in the recently passed deficit reduction package. With no fare hikes planned until 2011, service cuts, which Crain's New York says figure to be noticeable, could very well be next. And you gotta figure that Belmont would certainly be at or near the top of the list.

- Here's a story I find pretty weird - a House of Representatives subcommittee approved a bill which would force college football to adopt a playoff system to determine the national champion. Seriously! Of course, if there were some racing fans on that committee, they might vote to abolish Filly Friday; dump ESPN; mandate that the Breeders' Cup be run on natural dirt; force a single entity model on the industry (never happen....far too many competing interests at play); award Horse of the Year to Zenyatta; make the installation of lights for night racing mandatory; force NYC OTB to spell Charlie Hayward's name right. But I'm sure they have more important things to do!

- Kasey K has a first-time starter at the Big A on Thursday; Splitting Heirs, a $40,000 purchase at Timonium in May, debuts for trainer Bruce Brown, winless with his last 28 first-timers going back to July, 2008. This is a two-year old filly by Wildcat Heir, a highly impressive 15 for 54 (28%) with his debut runners according to the Form. He's fifth on the rookie sire list, but has by far the most winners on the list, with 37. Still not enough however to prevent his stud fee from falling from $8,000 to $6,500 (live foal, stands, nurses, and recites the pledge of allegiance by heart).

Honestly (w/updates)

With Albany still absorbing and evaluating the effect of the verdict which made Joe Bruno a convicted felon, the constitutionality of the "honest services" law under which he was prosecuted was argued in the Supreme Court on Tuesday. And apparently, not very well for the federal government.

The 21-year-old statute, which makes is a crime to "deprive another of honest services," has recently been criticized by both the left and right as overly broad. Judging from their questions, justices from both ends of the ideological spectrum also appeared united in their skepticism of the law. Justice Stephen Breyer said the law's language could enable the indictment of tens of millions of people, while Justice Antonin Scalia mockingly said that the law has come to mean, "Nobody shall do bad things." [AmLaw Litigation Daily]

Y'know, for a guy who's supposed to be so charming and bright, Scalia has never struck me as being either. Just seems like your garden variety radical in robes as far as I'm concerned.

Most of the other justices sounded the same theme. Justices Stephen G. Breyer and Chief Justice John G. Roberts Jr. suggested several times that the law might be unconstitutional because it was so vague.

"A citizen is supposed to be able to understand the criminal law," Breyer said, yet it was unclear what the law in question branded as a crime. [LA Times]

I don't really understand what's so unclear here. An elected official compromises the interest of the public which elected him or her in the course of enriching himself personally.

The honest-services law, on the federal books since 1988, broadly requires that public and corporate officials act in the best interests of their constituents or employers.

Is that so complicated?

[UPDATE1: Justice Breyer added:

Complimenting the boss’s hat “so the boss will leave the room so that the worker can continue to read The Racing Form.....could amount to a federal crime. [NY Times]

Can't say I've ever thought of that one.]

Bruno was convicted on counts four and eight; the latter was regarding his "failure to disclose his participation through Mountain View Farm in a partnership with Abbruzzese involving thoroughbred race horses." But interestingly, and contrary to what was reported in some articles I've seen, this was not the count which dealt with the $80,000 (actually $40,000 cash and a $40,000 debt forgiveness) that Abbruzzese paid Bruno for a horse now generally accepted as being "broken down." That was count six, of which Bruno was acquitted. Recalling that the jury asked to hear a readback of testimony regarding Friends of New York Racing, I'm thinking that it just could be that Bruno's conviction, at least on that count (and perhaps the other as well), stemmed in large part from suspicions the jury may have harbored about efforts by Abbruzzese to influence Bruno during the battle for the racing franchise.

That would be ironic, because, as I recall, Bruno remained rather aloof during the Ad Hoc Committee process and even afterwards; and I don't ever recall him expressing any favoritism towards any particular group, Empire included. I thought at the time that maybe he was chastened by the persistent press (and blog) reports of the connection between the two men (as you would think Malcolm Smith would be wary of endorsing AEG).

And, if that's the case, it would also answer the question, which a few readers have recently posed, of just what the hell all of this has to do with racing. Not, of course, that I'm not allowed to write about it even if it doesn't relate at all. But it does.

Personally, I thought that the part of the case which involved Wright Investors (count one) was an even clearer case of Bruno depriving the public of his honest services than his dealings with Abbruzzese. Soliciting business (from which he earned commissions) from unions to whom he did not disclose that arrangement, and, as the prosecution alleged, favoring them in the course of their business before the state. Perhaps the jury didn't find the evidence of the latter to be persuasive. I certainly did.

- The verdict seems not to have damaged Bruno's reputation among his former constituents.

- Bruno resigned his position as the CEO of CMA Consulting. I'm not sure if he'll have to give up his box at Saratoga.

- Very bad weather headed this way; wouldn't be surprised if the Big A is washed out on Wednesday. [UPDATE2: The card is indeed canceled.]

Service Interruption

We're down at my parents' place in Florida, but there's currently no internet access at the house; thus the lack of posting. Probably saving some money too, since the weather hasn't been so great, and I'd likely be sitting inside betting on races. Still here for a couple more days, so if you don't hear from me you'll know why.

Paul Post wrote in The Saratogian of the expanded racino hours that were not a part of the deficit reduction bill passed last week.

Plans called for keeping racinos open two more hours, from 2 a.m. to 4 a.m., a move that might have netted the state an extra $45 million.

Well, I support slots at tracks while holding my nose; more as an acceptance of a life line, and in the interest of leveling the playing field. But that support only goes so far, and not as far as the thought of the state relying on the folks who sit glued - in fact, literally tethered by their cash cards - at those machines at 3:30 A.M. They could make up that $45 million tomorrow if they would just choose the Aqueduct winner and collect the excess over the budgeted $200 million that they figure to be able to receive.

Nonetheless, once the governor and the legislature look at the even bigger deficits to come, there's little doubt in my mind that expanded gambling will be a key part of the equation. I mean, they agonized to enact a mere $600-700 million of real cuts; facing billions more, I think I can say that table games at New York's racetracks are a near certainty...and in the very near future too. I think you'll see blackjack at Yonkers before the first coin card is slipped into a machine at the Big A.

Chapter 9 (Updated)

This is the press release about this morning's announcement regarding NYC OTB's Chapter 9 bankruptcy filing. Here's a key portion regarding OTB's strategy for getting back on its feet. And notice that it's the racing industry, and not the state or the city, which figures to take it hit if their plan is approved.

The business plan will call for a dramatic overhaul of the NYC OTB business model. New technologies are expected to enhance customer service while increasing efficiency and cutting costs. A new bricks and mortar strategy is intended to reinvent old storefront locations while creating new, modern flagship attractions in select city locations.

Most importantly, the business plan will ask for changes to the racing laws, including a modification of the current legislative distribution scheme, which at present require NYC OTB to calculate and pay the State, the City and the horse racing industry a percentage of gross wagers placed with NYC OTB. The business plan will propose instead that NYC OTB make calculations and payments to the horse racing industry based on Wagering Commission revenue it actually receives after allowance for costs of NYC OTB's functions have been met. NYC OTB will not be asking for any changes to the legislation as it relates to payments to the City and State. Without this change, NYC OTB may be forced to cease operations, which would cause the City, the State and horse racing industry to lose all revenues that could be provided by NYC OTB.

UPDATE - NYRA responds that they have no response.

In response to today's announcement from the New York City Off-Track Betting Corporation (NYC OTB) that it intends to file a petition for adjustment of its debts under Chapter 9 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York, The New York Racing Association, Inc. (NYRA) expects to be one of the largest creditors to the NYC OTB bankruptcy action and therefore it would not be prudent for NYRA to comment on the filing outside of the court proceedings.

Jurors On Track

No verdict yet, but the jury in the Bruno trial showed some interest in what is generally, but not exclusively (it does say Thoroughbred Racing and other opinions, after all), the main topic around here. They requested a readback of testimony by Jared Abbruzzese regarding the worthless horse for which he paid Bruno $80,000. You may recall that Abbruzzese told the court that he purchased the horse, named Christy's Night Out (pedigree not available on Pedigree Query), to fulfill a "moral obligation" to compensate for a consulting gig from which the former Senate Majority Leader was terminated.

Horse breeder Stuart Jamison Morris, who runs Dapple Stud Farm in Lexington, Ky., said he examined the horse and said there was nothing exceptional about it physically that would give it a high value as a race horse.

Morris said it was a small horse, the “bottom of the barrel in the world of thoroughbred” horses and worth less than $5,000. [Troy Record]

And the jury asked to hear Abbruzzese's testimony about our old friends at Friends of New York Racing, the predecessor entity to Empire Racing.

It included Abbruzzese being asked about an Aug, 26, 2004 golf outing he had with Bruno, then-future NYRA executives Tim Smith and Steve Duncker. [ed.-In fact, Smith was the future president of Empire and never worked at NYRA; Duncker was already on NYRA's board and became sole chairman the next year. Whatsmore, Duncker was considering Smith for CEO of NYRA until he learned that Smith was scheming for an Empire takeover all along..] At the time, Bruno was being paid $20,000-a-month to work at two Abbruzzese-backed companies.

Abbruzzese was also asked about an “off-campus” meeting in his Loudonville living room with Bruno he arranged in May 2005 while Friends of New York Racing was hoping to succeed NYRA overseeing the state’s racetracks. The meeting was highlighted in a memo Tim Smith, then head of Friends of New York Racing, sent to the group’s board members. [Times Union]

Old time readers recall that we talked a lot about these shenanigans at the time around here; a couple of background posts here and here.

- I found the gay marriage debate to be a rare bit of truly compelling, and even at times moving, drama to take place in a chamber where most outcomes are determined in advance. Here many of us have been bashing these guys, and, lately, the Democrats in particular, for being clowns; but now I was watching Senators such as Eric Schneiderman, Kevin Parker (all duded up for the occasion), Diane Savino, even Pedro Espada Jr., and the bill's sponsor Tom Duane (with my sister-in-law right there on TV behind him!) speak with passion and eloquence about Thomas Jefferson, the constitution, the long, uphill fights for civil rights over the years, and equality and justice for all.

On the other hand, only Senator Ruben Diaz Sr, amongst the 38 lawmakers who voted the measure down, had the balls to get up and explain to the voters why. If they did, and if they were being honest, many of them would explain that they had their own political fortunes in mind given the supposed anti-incumbent mood of the voters, and especially, for the Republicans (who, against many expectations, voted unanimously against) after the right-wing revolt against the GOP candidate Dede Scozzafava, who favors same-sex marriage.

Among the eight Democrats who abandoned the ideals of the party was the convicted girlfriend-dragger-down-the-apartment-hallway Hiram Monseratte; and Joseph Addabbo, who defeated Republican Serph Maltese in the district which includes Aqueduct. We no doubt will see Addabbo's smiling face at the press conference announcing which group will seek to attract degenerate slots gamblers to his district. Whenever that turns out to be.

Big A Up (Almost) Next?

Governor Paterson now says that he will reluctantly accept the $2.8 billion dollar deficit reduction plan that legislative leaders claim he agreed to on Monday. But don't call it a deal.

"I would not describe it as a deal, Ken. Because a deal means that all parties accept the agreement," Paterson told reporters during a Red Room ceremony. "This proposal for $2.8 billion of deficit reduction, includes $1.6 billion that I'm reducing myself and $400 million of stimulus dollars that we're actually supposed to use next year." [New York Observer]

The governor continues to insist that he will, and can, compensate for the deal's plan's deficiencies himself.

There was talk of an all-nighter at the Senate to craft and pass the necessary bills; but that will wait until Wednesday (as the Assembly burns the midnight oil).

And, of course, $200 million from the Big A sweepstakes winner is included in the plan arrangement; and once this is finally over, then we might finally learn who will be selected to....

Oh...yeah, first actually comes the long-awaited Senate vote on same-sex marriage, scheduled to, as promised, come to the floor following the passing of the DRP. The question of whether supporters can garner the 32 necessary votes seems to be an open one, with the possibility of a few Republicans voting in favor, thus compensating for the few Democrats who may vote against.

One of the latter who's for certain is Senator Ruben Diaz Sr., the most vocal opponent of gay marriage in the Senate. He's nervous enough that he retired to his Albany office to pray. You know, to that God who's in favor of inequality and discrimination.

Paterson meanwhile was in Brooklyn Tuesday night for a town meeting where, it was reported, he reiterated that he intends to run in an attempt to keep his job in 2010. There's no doubt that the governor is seeking to make political gains from his stubborn stand against the legislature, as Elizabeth Benjamin highlighted the other day. But why shouldn't he? It's not like he's a johnny-come-lately to the budget deficit - he's been urgently sounding the alarm practically since his first day in office (or at least after he dealt with the drug and adultery stuff). So I say humbug to his fellow Democrats in the Senate who have criticized him for playing politics; he's just playing the game just as you would (if you weren't too busy doing nothing), and you guys are the perfect foil. If he's ever gonna get back into the race, it'll be in large part on your backs.

Two Down, Six To Go

The early speculation that the jury would return a quick verdict on Joe Bruno has proven to be totally off base.

“After careful consideration, we have come to a consensus on two counts. We cannot come to a decisionn on the other six counts. Could you please provide us with some guidance as to how we are to proceed. We are not ready to give up, but we could use some assistance.” [Politics on the Hudson]

Judge Gary Sharpe, concerned by the use of the word "consensus," reminded the jury that unanimous consent is required for conviction. The jurors replied that, indeed, they had reached a verdict on two counts.

As far as what the verdict is on those two counts, really, your guess is as good as mine. Here are the eight counts against Bruno, as summarized in the New York Times this morning. The testimony of Mary Louise Mallick, which was read back to the jury on Monday, would seem to favor the defense.

But, on the other hand, the fact that the jury's request on Tuesday for a read back of Nov 6 testimony by businessman Leonard Fassler pertained to such a specific portion of that testimony - regarding a payment of just $15,000 of the $468,000 that Bruno was paid by him - indicates to me that the jury could be zeroing in on a specific instance in which they feel that Bruno did, indeed, deprive his constituency of his honest services.

Mr. Fassler appeared to have trouble describing what consulting work Mr. Bruno did for him, and said that an invoice he asked Mr. Bruno to send him was “more form over substance.” [NY Times]

Fassler had also told the court that, in 1995, he requested, through Bruno (who he had been paying $4000 a month since 1993), a meeting with Governor Pataki "to discuss the forging of a partnership between IBM, NYS and AmeriData.” Fassler ran the latter company. He also had been asked about his company's efforts to do business with OTB. And he told the court that a Bruno aide was “very good at getting tickets at Saratoga raceways.” No surprise there of course.

Deal or No Deal

Assembly Speaker Sheldon Silver has been clear that he doesn't feel that the Aqueduct selection needs to be made until after the conclusion of the budget negotiations which have consumed Albany going on four weeks now. But now that the talks appear to have concluded without a conclusion, where does that leave the epic selection process?

The deficit reduction talks between Governor Paterson and the Legislature appear to have broken down completely (despite a report of a "deal" early Monday evening). The governor said that the Legislature's "last best offer," which included some $600-700 million worth of cuts, was insufficient. And despite legislative leaders still holding out hope for an eventual deal, Paterson said that the talks have now "concluded." “I have given the Legislature more than enough time to join with me to address this crisis." [Times Union]

Assembly Speaker Sheldon Silver said that his side has gone as far as it is willing, or able, to go, and that even the governor's scaled-back education cuts were not acceptable.

“Clearly the Senate will not entertain any education cuts, minority or majority, and therefore there aren’t 32 votes in the Senate to do a broader deficit-reduction plan. So having said that (the governor was) presented something within the political realities that exist. And it’s up to the governor to accept or reject or modify.” [Politics on the Hudson]

In response, the governor, in his latest plan to take matters entirely into his own hands, announced that he will direct the Budget Division to withhold certain payments to local governments, a move that threatened to squeeze social service providers, schools and municipal governments. [NYT]

Previously, on Sunday, Paterson announced that he was ordering $1.6 billion in emergency cuts by executive fiat. But the Village Voice noted:

Some of the package involves dicey projected revenue, as with the presumed $200 million from the Aqueduct "racino" -- now envisioned as an up-front payment from whoever winds up taking the contract -- down from the $365 million expected in palmier days, but still (forgive us) a gamble.

- No verdict in the Bruno trial, and the jury (fresh from the long weekend during which they surely did not discuss the trial one bit with any members of their extended family with whom they ate (and drank) heartily) requested a readback of testimony that the former Senate Majority Leader feels is favorable to him. The Senate's chief finance officer, Mary Louise Mallick, testifying about the grants to Evident Technologies, stated that she would make recommendations as to the merits of such monies doled out by Bruno, and that "more often than not,” he would go along. She said that she visited Evident’s headquarters and ultimately decided that the company was a worthy investment. [NY Times]

And, as Robert Gavin notes on the Times Union's site, she had also told the court that the process became more "open" under Bruno, and that the grant recipients were made public on a website. Here, Gavin once again points out that it was only after the Times Union sued the Legislature, and by the resulting court order, that the names were released.

That, however, did not come out during the testimony. Judge Gary Sharpe rejected a later bid from federal prosecutors to allow the order from the Sullivan County judge into evidence. [Times Union]

When asked how he was spending the time as he awaits the verdict, Bruno said: “I’m taking a look at what you’re doing and saying.” In that case, I imagine he's surely getting a good laugh from the obvious frustration of the reporter from his old nemesis.