Friday, February 19, 2010

New York Aqueduct Slots Contract Under Scrutiny

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This installment of The Tribes In The Media is a New York Daily News article on federal officials probing into the selection of a group to build and run a slot parlor at the Aqueduct Racetrack in Queens, N.Y. The Mohegans participated in two bidding processes but came up empty each time.

Feds galloping into probe of controversial Aqueduct racino deal
By Kenneth Lovett
New York Daily News
February 18, 2010

ALBANY - The feds are trying to get losing bidders in the Aqueduct racino deal to dish about the chaotic process that led to the selection of a politically tied group, the Daily News has learned.

One losing contender said the Manhattan U.S. attorney's office contacted his group this week - the latest twist in the mushrooming scandal.

"The guy said, 'We're contemplating a further inquiry into the racino bid process: If we go ahead with that, would you guys be willing to cooperate with us?'" the bidder disclosed.

"We said that it wasn't much of a process, but, yes, if you ask us to, of course we'd cooperate."

Prosecutors recently subpoenaed the state Lottery Division for documents related to the Aqueduct project bid process, although aides to Gov. Paterson insist the probe is unrelated to the racino deal.

A spokeswoman for the U.S. attorney's office wouldn't confirm or deny the existence of an investigation into Aqueduct.

Outraged bidders who lost out to Aqueduct Entertainment Group describe a rudderless selection system that made a mockery of the whole deal.

Gov. Paterson picked AEG just days after one key investor,the politically influential Queens Rev. Floyd Flake, left open the possibility of endorsing state Attorney General Andrew Cuomo for governor.

Paterson has insisted he was impartial.

State Inspector General Joseph Fisch has launched a separate probe into the tumultuous bidding process.

Fisch does not have criminal jurisdiction. His office has been in contact with the federal prosecutors to ensure they don't step over each other, sources said.

State documents released Tuesday show AEG changed key parts of its bid just days after a private consultant ranked the group as dead-last in anticipated revenues.

The consultant's report, delivered to Team Paterson on Sept.18, found that AEG's $2.9billion estimated cash haul by 2022-23 was the lowest offered by the six candidates.

Five days later, AEG revised its numbers so the group would rank first, with $3.6 billion in anticipated revenue.

"I'm not a great believer of coincidence and the timing ofthat strikes me as pretty transparent," groused James Featherstonhaugh, an investor with losing bidder Delaware North.

AEG officials insist they were unaware of the consultant's conclusions when they altered the bid.