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WINMANWIN
09-17-2003, 05:48 PM
NYRA faces stinging audit
Albany-- Spitzer assails agency the day before comptroller is to release a critical report on finances

By JAMES M. ODATO, Capitol bureau
First published: Wednesday, September 17, 2003

The scandal-plagued New York Racing Association is an example of the bad job government authorities are doing, Attorney General Eliot Spitzer said Tuesday.
His remarks, labeling NYRA a mismanaged entity that allows criminal activity, came as fellow Democrat Comptroller Alan Hevesi is expected to release today a stinging audit of NYRA's alleged financial failures.

"Public authorities are becoming to New York's government what off-balance-sheet partnerships were to Enron ... hiding spots, breeding grounds for inertia, incompetence, and, at times, worse," Spitzer said in a speech to a New York City business group, the Association for a Better New York.

NYRA isn't actually an authority, but a nonprofit corporation that holds franchises to run horse racing at the state's Aqueduct, Belmont and Saratoga tracks.

In June, Spitzer released a report documenting years of misconduct by NYRA tellers, including money laundering and theft. He said NYRA management allowed the corruption to fester, and federal authorities are considering an indictment against the association.

"NYRA is just one example of the consequences that flow from a lack of transparency, lack of integrity and a lack of accountability," Spitzer said. Spitzer, considered a likely gubernatorial candidate in three years, blamed state government for allowing authorities and NYRA to run in secrecy.

Rhonda Barnat, a NYRA spokeswoman, declined comment.

Gov. George Pataki declined to comment on Spitzer's remarks, but said he has confidence in state authorities.

Hevesi's audit, according to a draft obtained by the Times Union, faults NYRA for failing to pay millions of dollars in franchise fees and for stakes and purses. It also faults NYRA for paying special pensions to top officials while it wasn't meeting its financial obligations to state lenders.

The audit, 2000 and 2001, found:

NYRA underestimated its franchise fee obligations by $11 million to $14.7 million. Hevesi recommends NYRA make up for the underpayments.

Its independent auditors provided unreliable data.

Its deficit grew 21 percent to $51.5 million at the end of 2001.

The association may have improperly deducted interest expenses on loan payments it wasn't making on state debt.

Expenses such as supplemental retirement payments to top officers were unjustified in light of NYRA's financial problems.

The draft said NYRA officials disagree with Hevesi's findings and recommendations, but the final audit may have a broader response.

BillW
09-17-2003, 05:58 PM
What does "a breeding ground for inertia" mean? I know what inertia is, I'm just not familiar with the type that can be bred.

Bill

Suff
09-17-2003, 06:06 PM
I'd like NYC player to back this up... But with the Video Slots already Ready to go at the Upstate Tracks...Like Finger lakes and Saratoga Harness Raceway...

This Audit and Attorney General Investigation is Being Mainly Fuled by ONE POWERFUL political Lobby in NY politics.


The New Jersey Casinos.

Tell me I'm close when I say its these SOB's pulling out ALL STOPS to keep slots out of Southern New York State. And I would'nt be surprised if The Conn Lobby and them were bedfellows on this.

Outside of Asia.. The Hottest Thoroughbred Racing Franchise in the world is NYRA. What other reason but wanting a CUT of the PIE or feeling you own the PIE would anyone be attacking them?

Tom
09-17-2003, 09:29 PM
Finger Lakes is nowhere near ready to start slots. They haven't hit nail number one yet. Haven't even swept the floors yet. I think Batavia is forging ahead. FL managment might not be aware that slots were legalized yet! ;)

Suff
09-17-2003, 09:38 PM
4 -6 months , Pulling the Levers at Finger lakes.

Slots will be upstate soon.


"Finger Lakes hopes to have its VLTs online in the first quarter of 2004, " general manager Chris Riegle said. The first-floor grandstand is being renovated at a cost of $10 million


http://news.bloodhorse.com/viewstory.asp?id=18039

WINMANWIN
09-17-2003, 10:01 PM
State comptroller recommends independent oversight of NYRA
By MATT HEGARTY
NEW YORK - The New York State comptroller on Wednesday called for the appointment of an independent monitor to evaluate the ability of the politically embattled New York Racing Association to continue operating the state's three largest racetracks.
The comptroller, Alan Hevesi, a Democrat elected last year after 22 years in the State Assembly and two terms as the New York City comptroller, made the recommendation during a news conference at his midtown Manhattan office as part of a wide-ranging 50-page report calling for reform at NYRA. Along with the report, Hevesi's office released a narrowly focused audit that was highly critical of the association's accounting practices.

"It's time to face the fact that NYRA is poorly run," Hevesi said.

In a written response, dated Aug. 24, that was included as part of the audit, NYRA's general counsel, Patrick Kehoe, disputed nearly every conclusion of the Hevesi audit. Kehoe claimed that the comptroller had misread the law governing NYRA's finances and misapplied accounting principles to arrive at his conclusions. NYRA officials did not return phone calls on Wednesday.

NYRA has been under intense public scrutiny since New York Attorney General Eliot Spitzer, also a Democrat, released a report early this summer that was highly critical of NYRA's management. Spitzer's report cited the convictions of 19 mutuel tellers at NYRA over the past three years for income-tax fraud and money laundering to make a case that NYRA's management disregarded criminal acts by its employees.

The attorney general's report was followed by a highly public disagreement between Spitzer and NYRA officials, who each accused the other of distorting facts to serve their own purposes. The dispute cooled somewhat after NYRA hired a consulting firm to evaluate its cash-handling procedures, but it flared again late in the summer after reports that federal prosecutors were exploring the possibility of indicting NYRA managers for tax fraud in connection with the mutuel clerks' convictions.

NYRA is a highly regulated, not-for-profit organization that operates Aqueduct, Belmont, and Saratoga under a franchise awarded by the State Legislature. NYRA's most influential supporters are Republicans, and the effort to renew the franchise is often treated as a political football.

The stakes for the franchise have risen since late 2001, when the Legislature adopted a bill legalizing slot machines at Aqueduct and other New York tracks. NYRA recently put on hold its construction plans for a slots parlor at Aqueduct after its gaming partner, MGM Grand, expressed concerns because of NYRA's ongoing legal problems. NYRA's current franchise would expire in 2013 if its slots were operational by April 1, 2008; if not, the franchise would expire in 2007.

Citing the importance of the slots revenue to the state budget, Hevesi recommended in his report that the Legislature pass a bill that would enable the state to go forward with slot machines at Aqueduct regardless of the status of NYRA's current management.

Hevesi's recommendation to appoint an independent monitor drew heavily from the allegations in Spitzer's report. Hevesi said the monitor should be appointed by the comptroller's office and would answer to the comptroller, the state attorney general, and the State Legislature. Hevesi said legislators would use periodic reports from the monitor to determine whether NYRA's franchise should be renewed.

Hevesi said he expected NYRA to voluntarily accept the appointment of the monitor, and he threatened more audits if the association did not agree.

"If NYRA does not comply fully, we will launch a series of fully comprehensive audits to expose their management, their perks," Hevesi said.

Hevesi sharply criticized NYRA for failing to turn a profit over the past two years despite increasing revenues. Hevesi said a proportionately larger increase in NYRA's expenses was to blame, but when pressed for details, Hevesi said he did not know which expenses had increased, or why.

A central part of the audit accused NYRA of underpaying its franchise fee to the state for 2000 and 2001 by "at least $11.6 million and as much as $15.6 million." The yearly amount due for the fee is determined by a complicated statutory formula.

Kehoe responded sharply for NYRA, however, contradicting the comptroller's calculation of the fee for 2000 and 2001 and saying that the comptroller's office had not used the same criteria to calculate the fee in audits performed in prior years.

Hevesi also accused NYRA of bending accounting laws by deducting interest from its taxable income despite not actually paying the interest. But he conceded that NYRA had a defensible position for making such deductions and said that the comptroller's office has asked the IRS to issue a ruling on the practice.

Tom
09-20-2003, 12:48 PM
Originally posted by Tom
Finger Lakes is nowhere near ready to start slots. They haven't hit nail number one yet. Haven't even swept the floors yet. I think Batavia is forging ahead. FL managment might not be aware that slots were legalized yet! ;)

Sorry to quote myself, but ....

Update-Construction starts this week on the slot area and the slots are coming soon. First impact is that purses are going up 25% to starts with another 25% increase in the offing. NYB races at the thumb will be offering big bucks for little talent very soon. Time to buy a NY bred. I can see a lot of also-rans at NYRA making a thruway trip befroe too long.

Any word on NY slots yet?

WINMANWIN
09-20-2003, 06:30 PM
Originally posted by Tom

Any word on NY slots yet? [/B]

Slots are still halted at Aqueduct. I read that if N.Y.R.A doesn't have slots installed by April of 04, The franchise can be forfeited, or BID ON. The drf article was WRONG, AS I read the 1/2 INCH Correction :eek: in todays paper edition of the DRF today..