This installment of The Tribes In The Media is a New York Daily News article from today that analyzes the selection of AEG as the winning bidder for a VLT slot parlor at Aqueduct Racetrack in Queens, N.Y.
Silver contradicts Paterson's claims he played no favorites in picking AEG to run slots at Aqueduct
By Kenneth Lovett
NY Daily News
February 4th 2010
Assembly Speaker Sheldon Silver contradicted Gov. Paterson's claims he played no favorites in the selection of a politically connected group to run slot machines at Aqueduct race track.
Silver revealed Paterson "called me to personally and strongly recommend" Aqueduct Entertainment Group in a letter to the governor Wednesday.
AEG has strong ties to influential Queens cleric the Rev. Floyd Flake.
Paterson has been criticized for picking AEG just days after Flake left open the possibility of supporting Attorney General Andrew Cuomo for governor.
Paterson has insisted to reporters that he was impartial during the selection process and backed AEG only to break a stalemate.
The Daily News has learned that in addition to AEG's political connections, the group has had ties to several controversial figures.
"There's a slew of people involved with this company; there's a lot of layers," one executive branch source said. "That's what we're trying to figure out."
One key layer, sources said, is Karl O'Farrell, whose Australian-based Capital Play once bid to run New York's thoroughbred race tracks. He was involved in bankruptcy proceedings in Australia in 2008.
O'Farrell was listed as an AEG founder in a 2009 equity investment term sheet obtained by The News - though his name later disappeared from the organization's documents.
O'Farrell was never a formal investor, an official said, but had served as a consultant. An AEG spokesman yesterday said O'Farrell is no longer a consultant and has no stake in AEG.
"It's tough to determine if he's involved or not," the source said.
Another founder of AEG, according to documents, was J&J Partners, whose managing director, Joe Logan, has ties to convicted felon Eric Wynn.
Wynn shares a business e-mail domain with Logan and received at least one memo about the Aqueduct project. Wynn's son was listed as a J&J partner, according to records obtained by The News.
But AEG says Logan is no longer associated with the bid and denies Wynn was ever involved.
The consortium also lists Darryl Greene, a former business partner of Senate President Malcolm Smith and a protégé of Flake, as an investor. He was convicted in 1999 of stealing half a million dollars from city agencies.
The Lottery Division, which according to sources didn't rank AEG among the top three bidders for the racino, is preparing a thorough background check on AEG and its partners as part of the licensing process.
Silver warned he will not give his needed consent unless AEG agrees to several conditions, including assurances no one connected to the group has been convicted of a crime within the past 15 years. He also wants AEG to pony up $300 million.
AEG on Wednesday said it will comply with all the conditions "and whatever Lottery requires."
Meanwhile, Paterson defended a meeting he had with Flake only two days after choosing AEG.
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