Sunday, February 7, 2010

Did Bidding Process For Aqueduct VLT Slot Parlor Violate The Trust Of N.Y. Citizens?

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The New York Daily News has been running stories all week on the recent selection of a politically connected group, Aqueduct Entertainment Group, to build and run a new 4,800-Video Lottery Terminal slot machine parlor at the Aqueduct Racetrack in Queens, N.Y.

The Mohegan Tribe was involved in the two bidding processes for the lucrative Aqueduct concession but its last proposal was only to manage the facility and not to have any responsibility for financing or building the slot parlor.

The Daily News is determined to shed light on the bidding process. In an article earlier this week, the Daily News revealed that one of the founders of winning bidder AEG was one of the Mohegan´s partners in the first round of bidding.

According to rumors, the New York governor will have another problem to deal with this week, perhaps career-ending in nature, to be brought by the New York Times in an upcoming article on the governor.

The following installment of The Tribes In The Media is an editorial from the New York Daily News.

Two-armed bandits: Daily News demands sunlight on shady Aqueduct deal
New York Daily News
February 7th 2010

The stench of Albany's plan to put slot machines at Aqueduct Racetrack grows stronger as Gov. Paterson and the Legislature stonewall scrutiny of the multibillion-dollar contract.

The governor, Assembly Speaker Sheldon Silver and Senate Democratic conference chief John Sampson have jointly selected an entity called Aqueduct Entertainment Group to build the first gambling casino in New York City.

The deal now needs the approval of Attorney General Andrew Cuomo and Controller Tom DiNapoli. Based on the evidence so far, both men must stand ready to kill it.

Meanwhile, Paterson must comply immediately with a Daily News Freedom of Information demand for access to documents relevant to the bizarre, shadowy bidding process won by AEG.

The state's FOI expert, Robert Freeman, says we're entitled to see all the bids and the "rating sheets" that officials used to score and rank each bidder. He said the state is entitled to withhold only trade secrets or specifically privileged data.

New Yorkers especially need to see how much money the competing bidders put on the table. We also need to understand how Paterson, Silver and Sampson justify allowing AEG to match the high bid by adding $100 million to its offering at the last minute.

Asked what standards the Gang of Three applied, Paterson counsel Peter Kiernan said the officials considered factors such as financial strength, readiness to proceed and record in the gaming industry. But Kiernan acknowledged that there were no standards for judging how bidders measured up in any particular area.

In short, Paterson, Silver and Sampson completely disregarded the rules and procedures designed to ensure that state contracts are handed out fairly and achieve the best value.

Those rules say the politicians should have spelled out - in advance - all the criteria bidders would be judged upon, assigning percentage weights to each one. They should have appointed an evaluation team to grade each bid in each area. Those findings should then have been summarized in ranking sheets.

It is highly doubtful such basic documentation exists - making it anyone's guess why Paterson, Silver and Sampson came down where they did.

How is it that they drove away Las Vegas mogul Steve Wynn, one of the most successful casino operators, and wound up handing the contract to a little-known outfit with far weaker finances?

Was there a good reason to reject Hard Rock, a gambling brand name known worldwide, in favor of a company whose chief claim to fame is a casino in Niagara Falls, Ontario?

No one outside the back room can possibly say. The only ones talking are the rejected bidders, who contend that the process was tailored for AEG's benefit because the company is aligned with Floyd Flake, an influential former congressman and Queens minister.

Flake has close ties to Senate President Malcolm Smith, and Paterson fed the perception of favoritism by personally soliciting Flake's election support just days after the award was made.

If Paterson, Silver and Sampson have evidence that this is anything but a rigged deal, let them turn it over to the public. Now.