How Low Can They Go?

Aqueduct VLT Deal

Fails the Nose Test

As Scandal Unfolds



By Henry J. Stern
February 4, 2010

Today is the eighth anniversary of New York Civic. During that time, we have tried to describe the politics and government of New York City and New York State. We have had three governors, Pataki, Spitzer and Paterson, and just one mayor, Bloomberg. We will probably have a fourth governor by January 2011, but the incumbent mayor's term runs through 2013.

The State of New York is plagued by a corrupt and dysfunctional legislature, which complements an inept and vacillating executive chamber. The damage done by Eliot Spitzer's intemperate conduct of public affairs, before his Mayflower tryst provided an excuse to remove him, continues to this day. His carelessly chosen successor, designated solely for diversity, has muddled through one embarrassment after another, from the choice of a United States Senator and the surrender to the legislature on last year's budget to an array of contradictory statements on public issues, some coming within days of each other..

This week, we appear to have hit a new low, with the governor's approval of a video-lottery terminal installation for Aqueduct race track. The proposed deal was denounced by both the Daily News and the Post in unusually sharp editorials today. We quote, first the News, whose editorial appeared on p28 under the headline, BAD SMELL AT AQUEDUCT.

"The men who misrule Albany have plumbed new depths of public-be-damned irresponsibility in their flagrantly scandalous plan to bring back casino-style gambling to Aqueduct Race Track in Queens.

"Gov. Paterson, Assembly Speaker Sheldon Silver and Senate Democratic boss John Sampson picked a company to run thousands of slot machines at the decrepit raceway in dead-of-night secrecy that reeks of favoritism and fixes.

"Stunningly, not even Friday's choice of Aqueduct Entertainment Group as the winning bid was straightforward. Silver immediately put conditions on his okay, hinting that AEG was not the highest bidder and had a crook on its payroll.

"That and the company's inside connections to Sampson and Senate President Malcolm Smith strongly suggested it was rigged from the get-go.

"Making matters once, Paterson quickly approached a key player at AEG -- influential minister and former Congressman Floyd Flake -- to solicit his political support in the coming election.

"This doesn't even come close to the standards of competitive bidding and good government. The public can have no faith that this was a real effort, on the merits, to identify the best outfit to install and operate 4500 video slots at Aqueduct.

"This is a scandal wrapped around an outrage."

The Post was equally unsparing in its disapproval of the transaction. Its editorial, on p30, was titled THE FETID AQUEDUCT DEAL. We quote:

"Assembly Speaker Shelly Silver read Gov. Paterson the riot act yesterday about that dubious video-lottery-terminals deal he struck for Aqueduct race track. Good for Silver.

"The deal -- which would grant politically connected Aqueduct Entertainment Group the right to install and operate the terminals, rejecting competing bids from five other investors -- stinks even by New York's low-rent standards.

"The Post reported Sunday about what appears to be a tax-subsidized slush fund, called New Directions Local Development Corp., run by State Senate President Malcolm Smith, Rep. Gregory Meeks and others -- many with ties to the AEG deal.

"One player, former Congressman Rev. Floyd Flake, seems to be at the center of both the New Directions operation and the AEG bid for the video terminals.

"Surelyhearings should be held before any deal goes forward, if only because this entire sordid process evolved in secrecy; it's crying for sunlight.

"Yesterday [Wednesday] Paterson tried again to complain that everything about the AEG arrangement is kosher. 'I myself did not have a preference' about which bid won, he said Tuesday. 'I was trying to break the deadlock.'

"Right. Silver's letter says point-blank that Paterson 'called me to personally and strongly recommend' AEG.

"Until this fetid deal is bathed in sunlight, it mustnt go anywhere. It's that simple."

The two editorials are vehement and persuasive. The Flake-AEG bid was not compared with the five others in any objective manner. There is no documentation of the process by which the governor and his allies selected the Flake group. It is transparent (in its older usage) that the choice was politically motivated, based on Paterson's desire for Flake's support, which would be critical for his candidacy for re-election, if he proceeds to the primary. Politics is the more honorable motive for the governors action. There is no evidence of any other consideration.

We keep thinking of the line from Jaws 2, (1978): "Just when you thought it was safe to go back in the water "

The version that is appropriate in 2010 is: "Just when you thought New York State public officials could not get any lower"

We observe that both the News and the Post used nasal imagery to describe the Aqueduct transaction. The headline on this column reflects that theme. The words flagrant and fragrant have different meanings, but this very raw deal encompasses both.

Give it up, guys, before you have to explain it all to a grand jury.







StarQuest #642 02.04.2010 779wds