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.
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.