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Friday, August 01, 2014

Saturday Morning News and Notes

Here's an article from a local paper, The Photo News, about the process in Tuxedo - a town "with a median family income of $115,823, as reported in the 2012 American Community Survey"- that led to the town board supporting the resolution in favor of a casino there.  It discusses how much of the discussions and deliberations were held out of the public view.

After a public meeting on April 28 in which the company's plans were first presented, the board had several public meetings but also six special meetings held behind closed doors.

"We tried to have as many meetings to get feedback from the public," [Supervisor Mike] Rost said.

The first closed door meeting was held on May 21 and the last executive session was held on June 24, the day before the board voted 4-1 to approve a resolution in support of the casino and approve an agreement with RW Orange County LLC, a Genting subsidiary. [Photo News]
Among whatever else transpired during those private sessions, the town hired a consultant and a lawyer (both of whom assisted in negotiating the generous package of cash and incentives for the town), as well as a PR firm (LAK Public Relations).

Here's a new rule that I just thought of:  Any town that needs to hire a fancy PR firm to sell a casino to its residents should not be pursuing a casino.  We saw this in East Greenbush as well, where the board is working with Morgan Hook of SKDKnickerbocker in an attempt to counteract fierce opposition.  A casino should be something that has broad and unquestioned support among the residents of the host community.  If you have to engage a PR firm, whose job is to shape and twist a narrative in order to win people over to their clients' point of view, then you probably don't have that broad and unquestioned support.  An "informal" survey of Tuxedo residents conducted by Supervisor Rost showed that the town is against the casino by a margin of 2-1.  The PR guy called the results "very unscientific."  That's what he's paid to disparage facts that run counter to the agenda they are promoting.  Rost says "you have to do what's best for the town." But apparently, he and the other three members who voted for the resolution (with one opposing vote), are deciding for themselves what's best. 

The Photo News has filed a FOIL request for copies of resolutions authorizing the contracts with all of the parties involved, including Genting, and is awaiting a response.

 - If you go to this link, and click on Casino Applicant Materials on the left (and if you are a serious sadomasochist), you can read through all of the 17 casino applications in their entirety.  Please let me know if you find anything interesting.

 - Jim Odato reported on the deal between Saratoga harness and Churchill, by which the latter will manage the former's racino and have the option to buy a 25% stake in the company.  Odato writes of speculation that Churchill is positioning itself to take a run at the exclusive state franchise NYRA has held for decades.  Yeah, I'm still not buying that; have never believed that will ever be the case.  Don't think Churchill would be interested in a racing operation struggling to break even on its own unless it had ownership of the racino; and there's too many complications in allowing a for-profit corporation to operate the franchise.  I think Churchill merely wants to get a piece of the casino action in New York.  Yes, as co-developer in East Greenbush, they are already in line to do so should Saratoga Harness get a license there.  But this would give them a chance to get in on the action should Saratoga get one for Newburgh instead (CDI is not a partner on that bid).  (And make no mistake about it, Saratoga harness is getting one of them.)  It's also been noted that perhaps Churchill could use the partnership to avoid the out-of-state tax levied on its Twin Spires ADW....but they're already doing that.

As regular readers know, I say that Saratoga harness is a lock for a license because it's my belief that Governor Cuomo, in a successful effort to ward off deep-pocketed opposition to the casino referendum by the New York Gaming Association (of which Saratoga harness' Jimmy Feathers was the president at the time), made a backroom deal with the group.  So I fully expect NYGA members Saratoga harness, Tioga Downs' Jeff Gural, and Genting to come away with a casino license.  Because, as we are seeing in the continuing developments and revelations coming out of the growing scandal over Cuomo's handling of the Moreland Commission, this governor is used to getting what he wants. 
"There's this pathological need on the second floor for exact control — control at a level that's not really achievable, and not even healthy, over the long-term," [a legislative] aide argued.
"That’s his big weakness: He can’t give up control of anything. Whether it’s budget negotiations, whether it’s any piece of legislation, he has to have complete control," the second aide said, citing Cuomo's recent, last-minute effort to make the state's medical marijuana legislation more restrictive as one of many examples. [Business Insider]
Given his record, it seems very unlikely that Cuomo would give up control of the casino selection process either.  So I expect him to make his preferences quite clearly known to the members of the siting board - three out of whose five members have close ties to him, the other two having been appointed by him to their present positions as co-chairs of the Long Island Regional Economic Development Council. 

This is an unfolding and fascinating saga fraught with danger for the governor of New York.  And anything that has the potential to rein in the power of a powerful meddling governor such as this one affects anyone interested in racing and gaming in this state.  So, a (fairly) brief synopsis of the week's events:  Cuomo's smug performance at a press conference on Monday, after five days of silence following the initial Times report, was universally panned; nobody is buying the notion that he and his top aides did not attempt to interfere.  The Times, who he mocked during the press conference ("The truth DOES matter.  Even to the New York Times") (Well, he does have a point there) hit back by noting, pointedly, that his "revised defenses" seemed "difficult to untangle," and pointing out his ever-changing position on the Moreland Commission's independence - it was independent before it wasn't before it was again.  Conveniently enough, the press conference came on a day on which some of the panel's commissioners issued statements defending the administration's position (whatever exactly it was at that point in time) particular, and quite adamantly, from one of the co-chairpersons, William Fitzpatrick.

Some, including the head of the state's GOP Party Chairman Ed Cox, wondered why the Republican DA of Onondonga County, referred to by Cuomo as "Fitz" during the session, would be so insistent that the commission was independent, when he had previously complained, as reported by the Times: "The 2d Floor needs to understand this is an INDEPENDENT commission and needs to be treated as such." It seemed to me that it would be self-serving for any ambitious DA to dispel the notion that a commission that he co-chaired was in any way intimidated or compromised.  And then Zack Fink adroitly noted for the State of Politics blog that Fitz's wife is up for re-appointment next year, by Cuomo, for the judgeship in Syracuse that she currently holds.  Subsequently, it was reported that Joe Percoco, a top Cuomo aide, had indeed contacted commissioners in search of supporting statements, offered to draft statements for them, and encouraged them to communicate with him through private emails rather than using their government email accounts. [Albany Times Union]  Man!!

But the real blockbuster of the week was the smackdown administered to Cuomo by US Attorney Preet Bharara who, responding to the obviously coordinated statements by the commission members, suggested in a letter that the Cuomo administration may have tampered with witnesses in the ongoing federal investigation of the governor's disbanding of the commission. 
“To the extent anyone attempts to influence or tamper with a witness’s recollection of events relevant to our investigation, including the recollection of a commissioner or one of the commission’s employees, we request that you advise our office immediately, as we must consider whether such actions constitute obstruction of justice or tampering with witnesses that violate federal law.”
I don't think one can understate the implication of a rock star federal Attorney like the Preetster reacting so promptly and definitively against what was, for this administration, routine political posturing and PR.  In its response (hilariously dissected by the Times Union's Casey Seiler), the governor's office cynically noted: "As I believe the U.S. Attorney has made it clear that ongoing public dialogue is not helpful to his investigation, we will have no additional comment on the matter."  Who can blame them for clamming up?  Everything the governor says or does seems to land him in deeper doo-doo.  As pointed out by Colin Campbell in Business Insider:  "Cuomo is in hot water for allegedly micromanaging his response to a scandal based on his own micromanagement."

More on Moreland here and here.

And, as mentioned, I'm writing fairly regularly about the racing at Saratoga on the TimeformUS blog here.


Anonymous said...

Thank you for your commentary on this subject. The mainstream press does not have a thorough understanding of the process, and thus has not been following as closely as they should.

The Governor's attempts to discretely exert his control could spell trouble for him, if only the press picked up on the issues.

His attempt to exert his control, change the rules half-way, and move contrary to both the intent of the legislation, and the manner in which he promoted the Act up until he secured a successful vote, is CLEARLY evident in the wildly liberal interpretation the Facility Location Board (FLB) is applying to the RFA language.

One example, with regard to the SEQRA:

The FLB stated that in the Q&A, (and revised Q&A), that (1) the selection recommendation of an applicant for licensure is SEPARATE from the Award of the license.

They also state the 24 month deadline will not be tolled while SEQRA is being completed. HOWEVER, the licenses will only be awarded once the SEQRA is complete!

BUT, they also CLEARLY state that the board anticipates BOTH licenses in Catskills/Hudson Valley will be awarded together, at the same time!

So, in essence, they are saying that those bidders who have completed their SEQRA's already, will have to wait until the other bidders have completed their SEQRA, before the license will be awarded.

NOW, the kicker!

All of the Sullivan and Ulster bidders have completed their SEQRAS! Whereas, none of the Orange County bidders have completed their SEQRAS.

So, CLEARLY the FLB is purposely tailoring the their interpretation of the RFA to accommodate all the late-comers in Orange County.

Is this not blatant favoritism? How does the mainstream press not pick up on this? It is clearly an abuse of executive power, and is contrary to all basic principles of the public procurement process.

Cuomo is obviously an extremely arrogant man, who believes he can lie to an entire state, by tricking them into believing they were voting for a law that would help out disadvantaged areas of UPSTATE, and then in 7 years the NYC area would become eligible.

IMO, there is no doubt that Genting and perhaps Caesers got Cuomo to agree to slip in Orange County in the 11th hour of negotiations. No doubt in my mind, and a thorough investigation is warranted.

Anonymous said...

Hi Alan, I am not quite a sick enough to read through all 17 applications but I have read Genting's Executive Summary for Tuxedo in most of it's entirety (many sections have been redacted as they were deemed "competitive advantages" that Genting could lose were they made public). One of the most interesting parts of their Tuxedo proposal addressed the "disadvantaged areas" of the state that were supposed to receive the benefits of casino job creation. Genting actually believes that people from these disadvantaged areas will be able to commute 30-60 minutes and spend $10,000 per annum commuting. I guess they figure that the Gaming Commission is as bad at math and money management as most of their gambling patrons seem to be.