ALBANY -- The State's top Internal Cop has released a scathing report on the manipulation of the bidding process in awarding AEG the Video Lottery Terminal contract for Aqueduct. The report implicates Democratic leaders in both houses of the Legislature as well as the Governor.
Inspector General Joseph Fisch describes a lobbyist-driven and chaotic back-room review of proposals from firms eager to run video lottery terminals at Aqueduct.
Fisch, a 77 year old judge appointed by Governor Paterson issued a 300 page report which implicates Democratic leaders including David Paterson, John Sampson, Malcolm Smith and to a lesser degree Eric Adams and Sheldon Silver.
WHY was AEG picked? Fisch speculates they had the best lobbyists.
The report, while timed poorly for Democrats, was released when it was finished, says Fisch.
The following if from the New York Times quoting NYS Inspector General, Joseph Fisch:The process was mired in “unrestrained political considerations”, lobbyists and targeted campaign contributions.
The report says that the bidder, a consortium called the Aqueduct Entertainment Group, or Aqueduct Entertainment, 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”
Citing possible violations of laws governing public officials by John L. Sampson, the Senate Democratic leader; Malcolm A. Smith, the Senate president; 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.
“This process was doomed from the start, and 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,” said Inspector General Joseph Fisch. “Shamefully, the public’s best interest was a matter of militant indifference to them.”
The report, which follows a classic outline of state business distorted by lobbyists, politics and money, emerges in the final two weeks of an election season in which candidates across New York 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.
Governor 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.
After complaints of favoritism surfaced, Mr. Paterson reversed the selection in March. The casino is now being built by a subsidiary of an international entertainment company, Genting New York, which won a follow-up competition. Among other pledges, Genting offered an up-front payment to the state of $380 million, which it has already paid.Before the reversal, however, Senators Sampson, Smith and Eric Adams, the chairman of a committee key to the selection process, mingled with an Aqueduct Entertainment partner, Jeffrey Levine, and Aqueduct Entertainment’s lobbyists at what one participant called a “victory celebration” held at the Albany home of one of those lobbyists, Carl Andrews, a former state senator.
“This report reveals Albany at its most sordid,” said Blair Horner, legislative director of the New York Public Interest Group. “Every New Yorker should be outraged. We urge the district attorney and U.S. attorney to move quickly on the I.G.’s finding of possible violations of the public officers law.”
In a statement, the governor’s spokesman, Morgan Hook, said Thursday, “While we are still reviewing the I.G.’s findings, one thing is indisputable: earlier this year Governor Paterson refashioned the selection process for a gaming operator at Aqueduct and further convinced the legislative leaders to adhere to this new process.”
Mr. Sampson released a statement that did not specifically address the allegations. “The Inspector General’s report highlights the well-known flaws in the selection of a bidder to operate a video lottery terminal facility at Aqueduct Racetrack,” he wrote. “The process lacked structure and the rules changed repeatedly.”
“Mistakes were made at various levels of government and we must collectively learn a lesson,” it said. “Last winter, I asked my office to launch an internal review of the process and to recommend reforms. Those recommendations included a lobbyist ban, pre-licensing of bidders, more community input, and enforceable goals for including minority and women-owned businesses.”
Several other officials named in the report did not immediately respond Thursday The report concludes that Aqueduct Entertainment should have been disqualified from the start because of concerns about its financial stability and legal problems of some of its members. Instead, the governor’s office and Senate leaders ignored advice from the State Budget Office and the Division of t the Lottery to disregard Aqueduct Entertainment’s bid.
