Friday, October 22, 2010

The Aqueduct Casino Bidding Process: A Scathing Indictment of NY Graft and Political Folly

A new report by the state inspector general has found widespread problems with the process by which the Aqueduct racetrack was set out to bid for turning it into a hotel and casino complex and how several key Democrats engaged in unethical behavior in order to secure a bid for AEG.

Suffice it to say, none of the top Democrats in Albany come off looking good in this. That includes Governor David Paterson, top Senate Democrats John Sampson and Malcolm Smith, and Assembly Speaker Sheldon Silver:
The report says that the bidder, a consortium called the Aqueduct Entertainment Group, marshaled funds at the behest of the state’s Democratic Senate Campaign Committee, casting “a taint on the motives behind the Senate leadership’s support of” Aqueduct Entertainment. The investigation included interviews with senators and other state officials, as well as internal e-mail among Aqueduct Entertainment members and lobbyists.

Citing possible violations of laws governing public officials by John L. Sampson, the Senate Democratic leader from Brooklyn; Malcolm A. Smith, the Senate president from Queens; and Angelo Aponte, the appointed Senate secretary, the inspector general’s office said it was referring its findings to federal and state prosecutors and the Legislative Ethics Committee.

“At each turn, our state leaders abdicated their public duty, failed to impose ethical restraints and focused on political gain at a cost of millions to New Yorkers,” Inspector General Joseph Fisch said in a statement. “Shamefully, the public’s best interest was a matter of militant indifference to them.”

The report — following a classic outline of state business distorted by lobbyists, politics and money — emerges in the final weeks of an election season in which candidates across New York State have vowed to clean up Albany.

Besides the Senate leaders, the report faults close aides to Gov. David A. Paterson for not keeping him apprised of concerns about Aqueduct Entertainment, blames the governor himself for relinquishing control of the process and criticizes the Assembly speaker, Sheldon Silver, for Sphinx-like silence despite his own knowledge of Aqueduct Entertainment’s problems.

Mr. Paterson, along with leaders of the Senate and the Assembly, selected Aqueduct Entertainment in January to operate 4,500 electronic slot machines at Aqueduct, a franchise worth tens of millions of dollars a year to the operator and an estimated $1.5 million a day in tax revenue for the state’s depleted coffers.
The franchise was ultimately revoked by Gov. Paterson over outcry over the problems with the AEG bid and the new contract was ultimately won by Genting New York, a subsidiary of the Malaysian casino consortium.

This wont be the last we hear of this as the matter has been referred to federal investigators look into criminal and ethical malfeasance by those named in the report. Most egregious is the finding that Senate officials leaked confidential information to AEG’s lobbyists, and got campaign contributions in return. Also named in the investigation is Buffalo Democrat State Sen. Antoine M. Thompson, who allegedly received $8,600 for his lobbying efforts on behalf of AEG for pushing the AEG bid.

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