Getnick and Getnick Again and Again

Before we were interrupted by the holiday weekend, there was the latest news item regarding NYRA, this one involving a dispute with their former integrity counsel Getnick and Getnick.  Longtime LATG readers and followers of the NY political scene are surely familiar with these guys; if you enter 'Getnick' in the search box in the upper left hand corner of this blog, you'll get a long list of posts, quite well-written if I do say so myself, going back as far as 2005.  I'd forgotten, until this reader mentioned it, about Neil Getnick's peripheral involvement in the Friends of New York/Empire Racing affair - he/she probably saw the same post that I did that came up on top of the search.  (Getnick had asserted that Tim Smith basically told him what Friends was up to back in 2004. Ah, those were the days, eh?)

Just about everyone was excoriated over Getnick's $125,000 per month contract as NYRA's integrity counsel.  NYRA was criticized for agreeing to pay anyone that much given their financial condition.  G&G was criticized for conflict of interest - it was after all their glowing report that allowed NYRA to emerge from a federal prosecution and go on to win the franchise....thus allowing Getnick to get the lucrative gig.  And, if you Google 'NYRA Getnick,' it returns, right on top (at least for me, could be different for you depending on what highly personal information of yours Google has), is a post of mine linking to a NY Post column in which Frederik U. Dicker breathlessly tells us how Joe Bruno was investigating Governor Spitzer's ties to the firm.  And haven't the lives of those two arch-enemies changed since then!  I would think that they could now perhaps find some common ground and share a laugh over a beer reminiscing over old times.  (Or....maybe not.)

Also, if we go way back to that abovementioned post from 2005, we see that Neil Getnick said that he was charging NYRA a mere $5 million for its work as the federal monitor during the prosecution. 

So, NYRA has been quite the cash cow for Getnick.  But now, the two sides are embroiled in a legal fight over NYRA's firing of G&G in March of 2011.  The two were squabbling over that $125,000 a month fee that NYRA had stopped paying in full after the arrangement was criticized by Comptroller Tom DiNapoli.   Matt Hegarty reports in the Form: 

  In court filings on Thursday, Getnick and Getnick’s legal counsel argued that the requirements of the franchise agreement NYRA had reached with the state prohibited NYRA from making a unilateral decision to fire the company. The company asked the court to reject NYRA’s argument and reiterated that Getnick and Getnick is still owed the money under the five-year agreement. [DRF]

The kicker here is a heretofore unreleased Getnick report purporting to contain details of two integrity investigations that were underway when the firm was fired.  Now, there is a dispute between the companies - and in newspaper reports I've read - as to when that report was delivered; whether it precipitated the firing or came afterwards.  However, Hegarty reports that Getnick's court filings themselves state that it was "delivered to NYRA’s board on June 13, 2011, three months after the firm had been fired."

If that is indeed the case, you have to take the report and whatever it says for what it's worth.  I mean, since "corporations are people," in the view of the now official GOP presidential candidate, as well as the conservative majority in the Supreme Court (one of the keys in the Citizens United ruling that rules and roils today's elections....and you really might want to read Jeffrey Toobin's controversial New Yorker article on the subject), then think about how you would react if you were involved in a long, complicated relationship that ended in bitter acrimony with you as the jilted lover.  You'd be pretty pissed I imagine, even besides the $5million and $125k per month.   Who knows what you'd say and do in reaction.  We don't know what's in the report, and may never know if NYRA prevails in its argument that it constitutes attorney-client privilege.  So I'm not saying that what's in there isn't true.  Just that, again, it has to be taken for what it's worth.

NYRA meanwhile is going on its merry way preparing for the Belmont Stakes which will draw a large crowd that will mostly go home disappointed when I'll Have Another loses.  Plenty of promotions and contests, new transportation options, and, in keeping with the theme of the day, announcing a strict security and testing protocols being implemented by the Racing and Wagering Board.  The Board can't keep track of the right takeout, but they can sure put the hammer down on all those habitual Belmont Stakes cheaters.  A buddy suggested that these measures are aimed at Doug O'Neill; but I say the Board is doing anything and everything it can to distance itself from NYRA and distract everyone from their own incompetence in the takeout snafu. 

We won't be able to tell for sure, but I do wonder if the Belmont day attendance will be at all adversely affected by all the negative publicity surrounding NYRA.  Not that it should have much to do with it at all.  But, I dunno, when an entity is the subject of such a constant barrage of negative news (all portrayed in the worst possible light), and is bashed over and over and over again, by newspapers, regulatory agencies, and politicians at all levels going up to the governor himself, it has to create some kind of a stench.  Whether it's smelly enough to keep people (other than Governor Cuomo) away, we probably won't know.  But it sure as hell can't help.

Cuomo Gets the Crown

I think it took about ten minutes after NYRA got a one week deadline to agree to, for three years (unless everyone forgets about when it's supposed to sunset), cede control to Governor Cuomo. And I think it was both sides, not just NYRA, that was anxious to get it done.  "Lawyers have gotten rich on the relationship between NYRA and the state....We decided not to do that," the governor said.  I think I'll take some credit here for writing last week that the letter to NYRA was more bark than bite.  The state didn't have a sufficient case to revoke the franchise and they knew it.  With a bulldog lawyer in NYRA's corner, they used the letter to pressure NYRA into this deal rather than embark on what promised to be long litigation (that would have given me great subject matter for months if not years).  According to Jim Odato in the Times Union, Cuomo even threw NYRA a bone to encourage a settlement, promising a cut of casino revenues if the state ends up legalizing gambling halls via a constitutional amendment.

So, now, in the spirit of this new alliance, and with all the lofty talk of cooperation we heard at the press conference announcing the deal, Cuomo will definitely go to the Belmont, right?

The governor said he'll attend the Long Island race if his schedule permits.  [NY Post]

  Yeah, but....I mean....what else does a governor have on his schedule for a Saturday afternoon?

Besides, now, after getting what he wants, as he usually does, Cuomo can come and ascend to the announcer's booth (out of the way, Durkin), gaze down to survey his conquest, and bask in the adoration of his loyal and obedient subjects, including those who traveled to Albany on Tuesday to kiss his butt.  Such as NYTHA president Richard Violette Jr:  "We are excited we have a Governor who has announced he will champion our industry."  (I wonder what his harness counterpart Joe Faraldo would have said.)  And Barry Ostrager, president of the NY Thoroughbred Breeders: ""It is a great comfort to the New York thoroughbred breeders to know that Governor Cuomo has reaffirmed the State's commitment to support the New York breeding program..."   And NYRA Board member (for now) John Hendrickson: " Governor Cuomo is to be commended for his vocal support of racing, and for bringing all parties together for a positive resolution."

And indeed, the governor said (mostly) the right things. 

  "As the upcoming Belmont Stakes shows, the racing industry is a vital part of New York State 's culture and economy, attracting millions of dollars in tourism revenue from across the nation and supporting thousands of jobs,"

He did also refer to $675 million issued by the state to subsidize the industry; and while it may be a matter of semantics as to whether the tracks' share of slots money constitutes taxpayer or corporate subsidy at this point, Cuomo has obviously succeeded in framing it his way.  But, in any event, has the governor suddenly become enlightened as to the "net positive" that the industry is to the state?  Or is he simply giving himself three years to manipulate the finances more to the state's advantage and place casinos in the locations of his choosing before he's off to bigger and better things?

I certainly know how a buddy who is an owner/breeder of NY-breds feels. 

This is what can be accomplished in the first six months, god knows what else they can do in three years:

goodbye Big A, convention center scam full speed ahead

Racing season April-November,

spa season expansion 6/15-labor day

Increase in takeout

Elimination of "subsidy"

Reduction in purses.

reduction in breeders fund

Belmont Stakes run on Polytrack

unilateral elimination of Lasix

3 day race week

restriction in frequency of horses running

multi billion dollar backstretch "improvements" made by NYS Dormitory Agency or some other politically connected entity 

Maybe you can quibble with some of these points - a reduction of race dates, though maybe not to the extent expressed here, actually makes some sense, so you can probably cross those ones off.  But I'd surely wager that you can kiss the Big A goodbye.  And I wouldn't be at all surprised to see any of the other predictions come to pass, not a one.  Would you?

Just amazing that we've reached this point, and that things at NYRA deteriorated so quickly.  I don't know what could have done about the breakdowns....though, in hindsight, NYRA surely could have acted quicker when it became apparent that something was amiss instead of merely acting puzzled and insisting that the track was safe.  Something, anything, to show some concern, even a symbolic one - a one-day shutdown of racing to inspect the track, or an investigation along the lines of the one in which it was pressured into.  But the final straw was that ridiculous takeout snafu, a lousy 1%.  I know you takeout guys don't like when I minimize that by referring to it as dribs and drabs that most affected horseplayers didn't even miss (and likely lost it back if they did).....but its impact on New York racing, and on the career of at least one good man who had the best interest of the game at heart, has been far, far, far more profound than that $8.6 million figure was made to sound.   Oh, man.

One Person Not Excited About the Triple Crown

"Aw, fuck," I can just hear New York Governor Andrew Cuomo mutter disgustedly when he learned that some horse won some race after winning some other race thus setting up some really big race at Belmont Park on June 9.

For one thing, I mean, he's just gotta be there, doesn't he?  I know that NYRA is the evil empire and all which has, in Cuomo's estimation, been involved in scandals every other week over the past ten years.  And yeah, it'll sure be rather awkward...especially in the light of the latest reported meeting between Cuomo and the NYRA Board on Friday. 

  Last Friday, Cuomo advised NYRA Chairman C. Steven Duncker, and vice chairmen — Michael J. DelGiudice, the speaker's appointee, James P. Heffernan, a Pataki appointee, and Charles Wait and Stuart Subotnick, NYRA appointees — that state control of NYRA is coming, including selecting the next chairman and nominating the next CEO. [Albany Times Union]

  Will he smile and exchange pleasantries with Ellen McClain, whose appointment infuriated him to the point of his invoking a legally questionable hold on NYRA's share of casino money? 

However, being at a Triple Crown race is just a governor-ly thing to do.   As always, we saw the Kentucky and Maryland governors at the post-race ceremonies of their states' big races.  So wouldn't it be even more awkward for the governor should there be a Triple Crown winner and he's not there?  Besides, given his presidential ambitions, I'd think he'd want to have his smiling mug up there before a large (we hope) national TV audience.  Most of those viewers around the country don't know anything about the so-called 'scandals' at NYRA.  And it's not like C. Steven Dunker is the equivalent of Jeremiah Wright or anything.  Who else would he send anyway?  Well, we know his Lietuenant Governor likes the races.  And there's always the smarmy Senate Majority Leader Dean Skelos, whose district borders that of Belmont; and who I'm sure would be willing to compromise on something he professes to stand for in order to get his mug on TV and try to take credit for everything that Cuomo has done.

Who knows, maybe Cuomo will go and actually get caught up in the excitement like most normal human beings would, have a beer with Duncker, establish a rapport, usher in a new period of detente, and not even be mad that they made him pay 10 bucks to get in?  Nah...

Whatsmore, whether the governor realizes it yet, the occasion of I'll Have Another coming to New York to try and win the Triple Crown will give NYRA the opportunity to shine on the grand stage, and show the state and the country what it does best - conduct high quality racing and handle big events such as this without a hitch.  Well, as long as the bathrooms are working, anyway.  The country will see the track in all its bucolic glory (via selective camera shots in the backyard area), with racing fans and casual observers of all ages basking in the sunshine (hopefully!!) and enjoying food and drink (that they didn't bring into the track with them unless they sneak it in as I will).  And all those people who have heard or read all the rhetoric from the governor, and who have read all those ignorant NYRA-bashing editorials over the years, will wonder, what's so bad about these guys?  "We anticipate a spectacular day of racing three weeks from now, and look forward to welcoming fans to beautiful Belmont Park," said Duncker in a press release issued shortly after the Preakness.  Indeed!

It was as if on cue that the Post and the Daily News chimed in with said editorials this past weekend.  The News referred to "New York’s publicly subsidized racing industry," referring, I guess, to the industry's share of slots money.  That echos a theme sounded by the governor a few weeks ago when he questioned if the industry should continue to be "subsidized."  I suppose one can claim that that share should go to the state for other purposes instead, but to equate it with taxpayers money as the News does is just a misleading stretch.  The News also calls for "Management that would consider fresh ideas, such as closing Belmont or Aqueduct and turning one of the properties into a revenue-generator."  Huh?  Year round racing at Aqueduct?  Comical, as Peter DeBoer might say.  And the Post is no better, having already jumped to conclusions about the investigation of the takeout snafu that has yet to be completed.  When Cuomo said last week that NYRA did not have the public trust, well it's little surprise when folks who otherwise no little about the issues are constantly fed crap like this.

 - I'll Have Another earned a fine Beyer figure of 109, but we didn't need to see any numbers to know that his effort was an extraordinary display of persistence and courage (not to mention some deft riding by Mario Gutierrez),.  For the son of Flower Alley to be able to catch a quality lone speed frontrunner who, under expert guidance himself, got enough of a breather to be able to skip away and open up daylight turning for home was truly the stuff that classic Classics are made of.  I'll Have Another was relentless in getting the last 7/16ths in 43.54, a rate of 24.88 per quarter.  That surely qualifies as "racehorse time," more and more an exception rather than the rule these days.  You can certainly disparage the rest of the field, nine lengths back to third and depressingly gapped out beyond back to last place Pretension.  But the top two and, with no disrespect to Bodemeister, especially the winner, surely proved to be worthy.  It will be a deserving horse coming to New York (he's actually already here) with a legitimate chance to end this Triple Crown drought.

  - And regarding Peter DeBoer, if you don't think the Devils are throwing elbows and setting illegal picks,watch here.  Let's Go Rangers!!

NYRA Response Just the Prelim

By now, you may have read NYRA's response to The Letter which represents a potential first salvo in a bid by the state to revoke its franchise.  The statement deals strictly with the accusation that NYRA acted improperly, and in violation of unnamed regulations and by-laws, in appointing Ellen McClain as the new CEO President (CEO position is still open), and Kenneth Handal as General Counsel.  Not only, according to NYRA, were the appointments part of its "fiduciary obligation to exercise its business judgment to protect the best interests of racing and the income stream that pari-mutuel wagering provides to the state," (good one!), but, NYRA claims, they were actually encouraged by Racing and Wagering Board Chairman John Sabini. 

  On May 1, 2012....Sabini sent a letter to the NYRA Board of Directors, which stated “…it is imperative that you provide an interim operational plan to the Board, especially who will be performing functions as Chief Executive Officer and Counsel.”  This letter contained no indication of any concerns or limitations with respect to these appointments.

However,  Chairman Sabini shot back that he never told NYRA to appoint a president and secretary, but did urge it to promptly set up interim leaders. [Albany Times Union]  Looking at the (clumsily worded) May 1 letter from Sabini, it's really a matter of interpretation and intent of the language, and each side can make a case in my view.

But that's just a pissing match, really.  For one thing, NYRA was fully within its rights, if not acting out of its "fiduciary obligation" (I love that phrase), to appoint Ms. McClain as CEO - interim, acting, or otherwise.  Reasonable people can surely argue over the wisdom, or even the appropriateness, of appointing the person who was the Chief Operating Officer while the takeout was too high as the new CEO President.  But the investigation into the takeout mess will run its course, and look, heaven help NYRA should it determine that Ms. McClain was involved in any improprieties whatsoever regarding the takeout being 1% too high on certain exotic wagers.

What will be of far more interest and significance is how NYRA responds to the most explosive elements of the letter - the withholding of its share (not, we're told, the horsemen's or breeders') of slots money, and the point-by-point accusations of material and/or non-material violations of the Performance Standards laid out in the Franchise Agreement and/or the Racing Law that could in theory lead to revocation.  Matt Hegarty writes in the Form: 

In contrast to portions of the letter pointing to its authority to revoke the franchise, the letter did not cite a section of racing law in which the state had the authority to suspend the casino payments, so it was unclear how the state arrived at that position. As a result, it’s likely that NYRA’s attorneys are exploring whether the state has the right to authorize the suspension of the payments, either under the franchise agreement or the state’s racing law.

   And you can sure expect NYRA to push back strongly considering that its attorney is Brendan V. Sullivan, Jr. - a Washington, D.C. defense lawyer considered one of the top in the business - that, according to James Odato in the Times Union.  Sullivan has represented, and quite successfully, such illustrious characters as former Senator Ted Stevens, Oliver North (“I'm not a potted plant. I'm here as the lawyer."), and Richard Grasso (in approximate ascending order of contemptibility).  Not only did Stevens get off, but the prosecution ended up being accused of prosecutorial misconduct in a scathing report by a special prosecutor earlier this year.  That might be something for Racing and Wagering, and the Franchise Oversight Board to think about considering their own failures, as the ultimate regulators, to themselves correctly regulate the takeout rate.

 - Here's a story about Pepsi dropping its sponsorship of the annual Tennessee Walking Horse championship in the light of horrifying allegations, some backed up by video evidence, of not only abuse, but outright torture of horses.  That video led to a federal indictment of a leading trainer. 

  The tape shows McConnell and his stable hands beating horses with wooden sticks and using electric cattle prods on them as part of a training protocol to make them lift their feet in the pronounced gait judges like to see. [ABC News]

It actually gets worse if you read on.  Sounds like this guy could use Brendan V. Sullivan, Jr.  But what I'd like to know....considering how so very concerned they've been of late about the treatment of the equine breed, why hasn't this been on the front page of the New York Times?  (Or on any page of the New York Times for that matter?)

Going Nuclear on NYRA

Here is the link  to the "nuclear letter," as described by Tom Precious on Bloodhorse.com, sent to NYRA Chairman of the Board C. Stephen Duncker by John Sabini, Chairman of the NY Racing and Wagering Board, and Robert Megna, Governor Cuomo's budget director and the head of the Franchise Oversight Board.  It was sent on the governor's stationary, as if it already wasn't serious enough, coming as it does from the heads of the two bodies empowered to revoke NYRA's franchise. And it constitutes the first specific threat to do so.  Once again, this is the relevant language in the Franchise Agreement: 

The franchise oversight board shall notify the franchised  corporation authorized  by  this  chapter  in  writing of any material breach of the performance  standards  or  repeated  non-material  breaches  which  the franchise  oversight  board  may  determine  collectively constitute a material breach of the performance standards.

The agreement grants NYRA the "reasonable opportunity" to cure any such violations.

Interestingly, the letter comes a week after Governor Cuomo himself expressed doubt as to whether the franchise could indeed be revoked. 

"I don't know that NYRA can lose the franchise....There is a contract ... the question is how you make it better." [Albany Times-Union]

The governor sounded there like a man who was speaking after having explored the possibility of revocation, perhaps concluding that the state didn't have a sufficient case.  And when I see that one of the three violations cited in the letter is: "The failure of NYRA to provide basic living conditions to the backstretch workers in its dormitories in Saratoga," I'm thinking that that may indeed the case.  If the state is resorting to playing that card at this point, then they must know they don't really have enough to make a clear-cut case for revocation.  We all know that the backstretch at Saratoga needs renovation, and Hayward always maintained that this would be the first use of the 4% share of VLT revenues designated for capital improvements.  And, if you go to the NYRA website, there's a 'Capital Projects Information' link at the bottom of the left-hand margin that discusses those plans as a project for later this year.  Of course, since that VLT money is now being held by the Lottery, NYRA would be denied their reasonable opportunity to cure any breach.  And, in fact, the "Backstretch" clause in the Performance Standards section of the Franchise Agreement specifically ties NYRA's obligation to make such improvements on its receiving that money.  So the state may run into a Catch-22 situation there if it continues to hold the funds.

What else is there?  There's NYRA's failure to produce documents related to the takeout investigation, which can easily be cured....the investigation itself, which I expect will show that NYRA acted out of oversight rather than malice....and the question of the spate of breakdowns on the inner track.  Regarding the latter, I think it's a stretch to frame that as a violation of the Jockey and Equine Safety clause in the Performance Standards section, which requires NYRA to weigh the installation of synthetic tracks and to "consider other steps in consultation with industry experts to ensure jockey and equine safety."  In fact, the latter is exactly what NYRA is doing with the investigation into the breakdowns (even if it was pressured into doing so), and that probe is of course still pending.  We don't yet know what caused the breakdowns despite what Joe Drape says, and it's surely unclear and subjective as to whether NYRA can be blamed no matter what the conclusion is, short of outright negligence.

And the criticism of NYRA's appointment of Ellen McClain as the new CEO is unfounded.  Section 2.5(d) of the Franchise Agreement reads, in its entirety: "New NYRA shall determine all officers of the corporation."  Period.  With the Belmont Stakes coming up, it's only natural and sensible that NYRA would want to have someone familiar with the organization running things for now.  Her appointment does not hinder the investigation of Takeout-gate, nor exempt her from being a subject of it.  However, surely the governor would like to have some kind of a say as to who runs NYRA and I suppose he doesn't like the fact that they went ahead and appointed one of their own.  I'm sure he'd prefer to have some tool in place there.  There's always Larry Schwartz.

So, to me, this may be more of a hissy fit by the governor and two men who have a direct personal and professional interest in deflecting any scrutiny whatsoever of their own roles in failing to notice that the takeout was too high, rather than a substantive threat to the franchise.  Unless, of course, Cuomo has changed his mind from his statement last week.  Surely, if NYRA is to stay, the governor will demand control of the Board, and this seems a tactic to ensure that he gets that, and whatever else he wants.  As he usually does.

 - Regarding the withholding of slots money, the letter refers to"racing support payments."  According strictly to the letter of the law, this would include all of the Genting money, including the funds earmarked for purses and breeders.  However, Precious reports in his piece:

Government sources confirmed the diversion of VLT proceeds to the lottery will not affect the breeding fund and purse accounts.

Coming Out

Members of the NYRA Board of Trustees met privately and directly with Governor Cuomo on Wednesday to discuss reforms to the racing association.   The governor was reported to have expressed doubt that the state could indeed take the franchise away; that despite the language in the franchise agreement that would allow the Franchise Oversight Board to recommend such a termination in the event of material or non-material violations; unspecified violations to be sure, but ones that a determined person could certainly frame NYRA's recent transgression as qualifying for.  So perhaps the meeting with the trustees and his comments represent a slight softening in Cuomo's position.  Still, he kept up the harsh, and misleading, rhetoric. 

"It seems like there is a never-ending list of the problems at NYRA. It’s not one incident. It’s an incident every couple of months for the past 10 years. [Bizjournals.com]

Well, I'd say that's more than a just a bit of an exaggeration.  It's a bunch of crap, in fact.  But in any event, the governor surely has other priorities; his latest involving taking the lead on increasing protections for disabled people, directly or indirectly under state care, from the kind of abuses that have been reported upon, by the NY Times in particular, over recent years.  (You see, the Times can have an influence, both good and really really bad, over matters that are, let's face it and with all due respect to the humans involved, far more profound than dead racehorses, when it's not wasting front page space on Joe Drape's various agendas.)  For Cuomo, it's the latest dance in his meticulously choreographed journey towards the presidential election of 2016.  His term in office will be a ready made marathon campaign infomercial by the time he's done with us, the citizens of New York who, along with the once powerful legislative leaders who are merely along for the ride, are just supporting players in his personal saga.  Here's the governor delivering balanced budgets on time; there he goes taking on unions and special interests; here he is making the tax code fairer without inordinately picking on the wealthy; protecting the most vulnerable around us; promoting gay marriage.

And,regarding the latter, it's apparently just a coincidence of timing that President Obama's coming out on the right side of that issue immediately followed his trip to Albany.  In any event, as a man with clear presidential ambitions, Cuomo can now claim that he led the way on an issue which won't be quite so controversial by the time he's running to succeed either Obama or that flip-flopping bully who now hilariously claims credit for saving the auto industry.  By then, gay marriage will be well on its way to becoming one of those anachronistic civil rights issues that people will wonder what too so long, and what the big deal was.

By the way, did you catch the governor behind the presidential lectern up in Albany the other day?

Looks right at home, doesn't he?

 - Quite obviously I didn't have much to say about the Derby.  Most of that is due to time constraints I've alluded to from time to time, including the project I'm working on outside of my full-time job; one that I think you guys will think is really cool once I get to tell you more.  And, oh yeah, also the matter of my beloved Rangers' now quite-imperiled run at the Stanley Cup.  But a lot of it too reflected my weariness with the hype and buildup that goes on for far too long.  The Kentucky Derby is one of America's greatest spectacles, still, and to be sure.  Saturday had the usual special glow, I had a great time drinking mint juleps at a party at a friend's house, and pissed away a mere $20 on Creative Cause (one of the handful of horses who ran decently).  However, the Derby has become, and quite quickly, almost overnight in relative terms, far more spectacle as opposed to a horse race of any sporting or historical significance.  I would think that those people who spent months - months! - obsessing over top ten lists, Haskin columns, the occasional times the horses actually raced, all the rumors and innuendos, workout reports, didn't quite get the bang for their buck.  Well, if you had the winner you did to be sure.  But, when a race goes the first half in 45.1, the last half in 52 flat, and only one horse can even come close to passing the leader, that race kinda sucks.  And, when I'll Have Another fades into the kind of insignificance that other recent Derby winners have, the 2012 Derby itself will be further diminished  I greatly appreciate those who wrote to express their disappointment at the lack of posting.  But in truth, I really couldn't possibly have added anything to the trove of information already available online from great sites like Hello Race Fans.  Well, except maybe using my selection as another horse for you to throw out.

Crist Responds

Steve Crist issued a statement on the Form's website regarding his involvement in the Racing and Wagering Board's investigation of takeout-gate.  Here's the link if you haven't seen it.

My understanding from my Twitter feed is that the comment section has been, let's say, cleansed.  What's left are some mildly worded posts mostly in support with some polite skepticism mixed in.  Not sure what was there before, but probably not too complimentary.  The fact is that, strictly from a  journalistic point of view, Crist is fair game here, and I'm sure he realizes that; in fact, he writes: "With hindsight, I regret that I didn’t follow up on the issue."  If the aggrieved horseplayer had contacted Jim Odato instead, I imagine that Odato would have investigated himself, discovered that bettors were being overcharged, confronted Hayward with his findings, and published an exclusive with or without his comment.  But here there were relationships and human nature involved, so that's not what happened.  As I said in the last post, Crist was in a difficult spot.  I feel bad for both guys; not because mistakes weren't made....and let those who have never erred be the first to throw stones in glass houses (or however that goes).....but because they're both advocates for those of us who love the game as much as they do.  When the good guys start going down, it's not good, especially in this environment, with an openly hostile governor advocating for drastic expansion of gaming.

As for Crist's suggestion that Hayward similarly was under the impression that NYRA merely had the option, rather than an obligation, to lower the takeout, we haven't heard anything from the NYRA CEO; but it doesn't really matter.  The buck stopped at his desk in terms of getting it right either way (as well as at the desk of general counsel Patrick Kehoe, as explained here by Steve Zorn on his Business of Racing blog).  And besides, however it went down, NYRA's enemies in Albany will have free reign to frame it in the most damaging way possible.  And Hayward and NYRA will be powerless to fight that.

Sorry Charlie

As they say, the cover up is often worse than the crime, and man, is it ever in this case for NYRA. The 1% takeout snafu was made into a big deal by politicians and the press with the attention-getting "$8.6 million taken out of horseplayers' pockets," but truth was it consisted of dribs and drabs that most horseplayers - including this one - didn't notice and haven't to this day.

But now, the Racing and Wagering Board (which surely has its own incentive to pin the blame on somebody else) has determined that NYRA knew far more than it was letting on. And once you get to the cover-up part, the question is always "What did he know, and when did he know it." In the case of NYRA President Charles Hayward, it's apparently spelled out in black and white. He knew everything. And he had for quite awhile. If you haven't seen the email exchange between Hayward and Steven Crist:

“Later on August 1, 2011 Hayward responded to Crist: “This gentlemen [who contacted Crist to alert him to the takeout error] is correct. Off the record, we have been working on this for some time. We originally had thought that we would announce this for Saratoga but political forces intervened. Since we are showing substantial losses in 2010 and 2011 and we have been smacked around by Cuomo (and he could check the SRWB from approving), we decided to wait. Also, the regional OTBs who collectively lost money in 2010 will scream like stuck pigs and that would provoke Skelos who is very tight with the guys who run Nassau OTB to introduce anti-NYRA legislation for the benefit of the OTBs. Finally, we are quietly working on a plan to open 10 or so restaurant/bars in the city and we did not want the politicos to block this effort. We have some internal debates on how much to lower each pool and how we would present this to our simo customers, the consumers and the politicos. I would appreciate it if you could keep these details confidential. I would also welcome a further discussion on this topic with you before the meet is over.

 “On August 1, 2011 Crist emailed Hayward: “Will keep it confidential and would love to discuss possible reduction schemes with you off the record whenever the time is right.” [Capitol Confidential]

At the time, last December, when the error was revealed to those of us other than the sharp guy whose query to Crist precipitated all of this, NYRA explained that the sunset of the temporary takeout increase "was unintentionally overlooked due to the complexity of the takeout provisions in the Racing Law." But that was...simply not the case. [Going to stop using "allegedly" or "apparently" as long as nobody disputes the existence or accuracy of the reported emails, which....apparently....is not going to happen.]

Look, as I've written before, I think Charlie Hayward is a great guy who genuinely loves the game. He brilliantly maneuvered NYRA through the franchise process when everybody, including this occasional blogger, counted them out...and continued to successfully guide the association through subsequent financial and political pitfalls to get to this point where the slots money is finally flowing. Whatsmore, given the constant criticism and scrutiny from Albany, I can't even really blame him for retreating into the kind of bunker mentality that led to the tactics and thinking described in his correspondence to Crist. But no doubt this is the end of the road. The unpaid administrative leave that he and Sr. VP Patrick Kehoe have been placed on by the NYRA Board of Directors is merely the first step out the door. No way in the world that he survives this. NYRA's very existence is in peril at this point, as Franchise Oversight Board chairman Robert Megna has made quite clear.

"This is not an isolated instance." Megna continued: "A failure to meet this most fundamental obligation puts into doubt the continued efficacy of the state's franchise agreement with NYRA."

So you can be sure that the NYRA Board will soon distance itself from those responsible as quickly as possible.

As for Steve Crist, the consequences are less dire, though surely embarrassing. He explained to the Daily News that he didn't quite grasp the fact that NYRA was overcharging contrary to the law. Whether or not you buy that, the fact is that he was surely put in a tough position here by a former colleague. Off the record is off the record; so whatever Crist did or did not understand, I don't know what else he could have done. Unfortunately, his credibility on matters pertaining to New York racing, which he has reported on so expertly and admirably for so long, is unquestionably compromised at this point.

 - Little surprise to wake up yesterday, the Monday kicking off Derby week, to find yet another damaging front page article in the NY Times on equine breakdowns courtesy of Joe Drape. Big Purses, Sore Horses, and Death. Maybe they need a new headline writer there at the Times....that's the kind of thing I might resort to for a blog post when I just can't think of anything more clever or succinct. However, I have nothing else to criticize; it's a pretty solid piece; quite disturbing as you might imagine. Drape however...apparently...had nothing better to do late last night than to parse through Twitter posts from earlier in the day, take one completely out of time context and reply sarcastically in an...apparent... attempt to make the poster look stupid. And that's pretty pathetic.

- Thanks to all who have written to see if I'm still alive.