The conventional wisdom is that Mitt Romney was in a win-win situation on the Supreme Court decision. If the Court found it unconstitutional, he could say “I told you so,” providing one was willing to parse his numerous conflicting statements on the issue. If they upheld it, he could argue that “you need me to repeal Obamacare” (which he has since said.) But since the case turns on Chief Justice Roberts’ saying it was constitutional because it is a tax, how does Romney justify the individual mandate he achieved in Massachusetts as being an increase in taxes? Now, I understand that Romney has demonstrated a remarkable ability to twist positions, both his own and the President’s, but won’t someone call him on this one?
For some time I have thought that the bitter - and usually mindless - partisanship in this country is our nation’s biggest problem. With that in mind, I cannot say I am surprised by the reaction of so-called “conservatives” to the Supreme Court’s decision on the Affordable Care Act, as well as their vilification of swing voter Chief Justice John Roberts. The “individual mandate” - the subject of almost all discussion - was once a widely-accepted principle by conservatives, and opposed by candidate Barack Obama in 2008. It was not until Obama attempted to address health care reform on a bipartisan basis and included it in the law since derided as “Obamacare” that it became the flashpoint for “conservative” attacks.
New York’s politicians were undoubtedly in a self-congratulatory mood when they agreed on their legislation to reform the racing industry following the controversy surrounding the New York Racing Association. The pretentiously titled bill, “New York State Franchise Accountability and Transparency Act of 2012,” provides for neither. While there are undoubtedly numerous deserving candidates for this year’s category of cynical political moves, filing legislation touting “transparency” on the Saturday night before the Legislature adjourns the following Thursday is in the running.
In fairness, it should not be much of an effort for either individual legislators or the media to digest the legislation since it does very little that had not been announced previously. It transforms the NYRA Board from 25 members to 17, and instead of “only” 44 percent of the current board being comprised of political appointees, the streamlined version will have 8 gubernatorial appointees, an additional two each by the Senate and the Assembly, and the remaining five from NYRA. It also requires the disclosure of interests in racing by the individual members or their family. Finally, it delays implementation of the State Gaming Commission, created by law in March, from October 1 to February 1.
So what does it do to advance the laudable goal of accountability? Uhh, not so much unless you believe that state government’s controlling racing, by definition, ensures accountability. This would be the state government that so botched the 2010 Aqueduct VLT procurement that the Inspector General referred his report to various law enforcement agencies. Or, the state government that could not manage gambling facilities so as to make money in the City of New York. Or, the state government that had four of its agencies responsible for overseeing NYRA, yet none of them uncovered the alleged excess takeout percentage for the 15 months it was in place. Or, the state government that had 11 members on the NYRA Board who also missed the takeout issue.
Now that Governor Andrew Cuomo is firmly in charge, what can we expect from him in terms of accountability and transparency? Let’s start with the State Gaming Commission mentioned above. This comprehensive law (41 pages) consolidates the gaming activities of the state (including horse racing) in one body, and empowers it with considerable authority. It was proposed as a Cuomo initiative and signed into law by him on March 30. He appoints all seven commission members. How is it going thus far? Well, they do not have a web site and the “Accountability and Transparency Act” extends its effective date four months until February 1. I have yet to see a reason why the extension is needed, which may be a good segue to the topic of transparency.
The purported reason requiring the takeover of racing is, according to a statement accompanying the legislation, “the establishment of racinos, the creation of the New York State Gaming Commission, and a [proposed] constitutional amendment on commercial casinos.” These are, again according to the explanation, “exigent circumstances.” Racinos have been her a while, the Gaming Commission is so important that it has not, apparently, been established, and there is an amendment to the constitution that might pass. It is not even apparent what the connection is between these three events - two of which have not even occurred - and horse racing. If there really is a connection, how do the Governor and Legislature enact a 41-page law creating the Gaming Commission - after casinos became a priority - and not address the seemingly exigent circumstances of NYRA? I have not seen any media source address this, and have seen nothing from the Cuomo administration that even attempts to connect these matters other than his bald assertions.
I wrote previously about the lack of transparency in the Cuomo-initiated Committee to Save New York, a “social advocacy group” whose advocacy appears to be limited to Cuomo’s agenda. Thanks to The New York Times, we learned that casino interests contributed at least $2.4 million of the $17 million raised by the organization in 2011. We do not know who the other donors are, and Cuomo has refused to ask the group to identify them because, according to the Times, his job is limited to “telling people to abide by the law.” So, under the “Accountability and Transparency Act.” a member of the Board of Directors who owns a race horse must disclose that fact, but the Governor who appoints 8 of the 17 members does not have to reveal if his advocacy group received millions of dollars from entities that may have an interest in - to raise a hypothetical - the NYRA franchise.
In his May 22 press release announcing his seizure of New York’s thoroughbred racing, Governor Andrew Cuomo - purportedly a believer in “transparency” in government - was only able to muster 113 words explaining his extraordinary action. While almost all of it was of the “Mom” and “apple pie” variety, one sentence struck me as being out of place:
With the structure of the gaming industry changing here in New York, the state also needs to take a new approach to how it manages and governs racing.
In a mere single sentence, he was able to assume the existence of a hypothetical, and in a complete non sequitur, “explain” his takeover as being caused by that change.
In his reference to the “structure of the gaming industry changing,” we can only assume he means his desire for an amendment to New York’s Constitution that would permit casino gambling in seven locations not on Indian reservations. Amending the Constitution requires two votes of the Legislature, and then approval by the voting public. The first legislative vote came shortly after Cuomo identified it as a priority in his January State of the State address. While the casino approval passed its first hurdle, it is not something that is happening overnight. In addition to the necessary votes, there would have to be a procurement, selection of winning bidders, environmental impact studies and construction of the facilities. So why does that require a “new approach to how [New York] manages and governs racing?” And why does that necessitate the immediate takeover of New York’s racing?
Cuomo’s action followed an Interim Audit by the Racing and Wagering Board that concluded that NYRA had improperly withheld 26% from certain wagers instead of the permitted 25% for over a year, with the incorrect amount known by senior NYRA officials. The Wagering Board’s Audit has not been completed, and the state’s Inspector General is also conducting an investigation. Neither of these entities that has oversight responsibility for NYRA picked up the error, nor did any of the 11 NYRA Board Members appointed by the Governor and the legislative leadership. The Governor, without waiting for the completion of any reviews, decided the solution to whatever ails New York racing would be resolved if there were more state involvement. Thus, he announced (with the agreement of NYRA’s Board) that the Board would be restructured so that Board membership would be reduced from 25 to 17, with the Governor and legislative leaders picking 12 of the 17.
Since none of this made any sense to me, I continued to wonder what the real reasons were for the Governor’s action. Thanks to two articles in The New York Times this week, we may be getting closer to an answer. In the Monday piece, the Times reported that the trade association representing companies that operate tracks and VLT’s kicked in a cool $2 million in December, 2011 to the Committee to Save New York, a “nonprofit social advocacy group” aligned closely with Cuomo. Genting, a member of the group and the operator of Aqueduct’s VLT’s, added an additional $400,000 to CSNY during 2011. What did they expect for this level of “investment?” I am sure it was nothing more than the promotion of CSNY’s “reform agenda” and to “get state government working for the people again.”
Part of CSNY’s “reform” agenda is not transparency as to where they get their money. Just as with the super-PAC’s on the national political scene, revealing the identity of donors is not required as it is with those who contribute to political campaigns. When Genting considered an advertising campaign to promote casinos in New York, the Times reported that “according to two people with knowledge of the discussions, the Cuomo administration encouraged” Genting and the gaming association to contribute instead to CSNY. The Thursday article in the Times disclosed that lobbyists for Genting advocated for a convention center and casino complex at Aqueduct during a Cuomo fundraiser in October. That the fundraiser was not originally on the Governor’s public schedule was “inadvertent” according to a Cuomo spokesperson.
Cuomo did negotiate with Genting to develop the convention center-casino complex on the Aqueduct site - a development described as a $4 billion project that would result in the largest convention center in the United States. The deal fell apart, according to Cuomo at a press conference this past Monday, because he would not agree to guarantee Genting the casino. Perhaps a more likely explanation is that he would be awarding a massive, multi-billion dollar contract without going through a bidding process. According to a Times article on June 1, the state’s Comptroller, Thomas DiNapoli, welcomed the news that a deal fell through since he had advocated a competitive process.
So after the Governor’s “super PAC” receives $2.4 million from Genting and other gaming companies, the Governor makes a priority of getting casinos and attempts to negotiate a multi-billion dollar no-bid contract with one of the super PAC’s biggest contributors. The Governor’s spokesperson dismissed as “insulting and sensational” any suggestion that money has played a role in the administration’s policy making.
What is truly insulting, however, - to our collective intelligence - is that such conduct would be condoned by an administration barely two years after the Aqueduct VLT procurement “process” exploded in the face of the prior Governor and legislative leadership. When Governor Paterson, Speaker Silver and Senate leader Sampson selected the Aqueduct Entertainment Group (AEG) for the VLT contract in early 2010, the selection was so manifestly deficient and AEG so obviously incapable of performing, it had to be withdrawn six weeks later. The Inspector General issued a scathing 300-page report later that year in which he lambasted all three principals, but also criticized the influence of unrestricted lobbying and campaign contributions in a process he described as “a veritable case study in dysfunctional and politically driven government.”
What does any of this have to do with horse racing? I don’t know, but it is the Governor who made the connection between casinos and racing when he took control of the NYRA Board. What I do know is that there is a lot of money flowing, questionable negotiations with one of the largest contributors, and still no explanation coming from the Governor as to the reasons or urgency for his takeover of racing.
The Belmont Stakes Blue Ribbon Analysis is on the Horse Racing page or by clicking here.
In this weekend’s news we learn that an organization that was harshly condemned by its oversight authority has fought back, accusing the oversight authority of “unsubstantiated accusations,” and a “flawed process” in which there was “minimal contact” with the organization. Was this the Board of the New York Racing Association contesting the actions of the Cuomo administration? Actually no; rather, it is the statement of the organization representing Catholic nuns in the United States questioning the Pope’s decision to begin an inquisition of the nuns, as reported by The New York Times.
But New York’s own authoritarian and out-of-touch hierarchy was not to be outdone. John Sabini, Chair of New York’s Racing and Wagering Board, has issued decrees that will, as he put it, “underscore the symbolism of the world-class racing held in New York State.” While I would agree that “symbolism” is the operative phrase here, judge for yourself if Sabini’s protocols are those of a world-class racing jurisdiction: All horses entered in the Belmont Stakes must be moved to a special barn by Wednesday; the barn will be guarded and have a single point of entry; entry and exit logs will be maintained to record any entry to a stall, including by the horse’s trainer; there will be searches and checks of any equipment, food, hay or bales of straw; best of all, no beverages or food for human consumption will be permitted near a stall.
Are these changes - in effect only for one race, the Belmont Stakes - ones necessitated by threats, evidence of wrongdoing, or perhaps something questionable about the running of the Kentucky Derby or Preakness Stakes? If so, such reasons were not disclosed by Sabini, nor were there any media reports to that effect. Rather, we should be viewing these steps in the lens of the takeover of New York racing by Governor Cuomo on May 22. Cuomo’s action followed an Interim Audit by the Racing and Wagering Board that concluded that NYRA had improperly withheld 26% from exotic wagers instead of the permitted 25% for over a year, with the incorrect amount known by senior NYRA officials. The Governor’s solution to improving the quality and integrity of New York racing is to put state government in charge.
While I have been questioning both the wisdom and likely effectiveness of such a move (see blogs here and here), Cuomo’s action has not been met with the level of scrutiny one would expect from New York’s media. I view the Belmont Stakes protocols as motivated less by a desire to ensure the integrity of the race than a need to show that the takeover was more than a naked power grab. If integrity is the true motivation, why are these procedures in place for just one of the thousands of races run in New York each year? Is a race that could produce the first Triple Crown winner in 34 years more susceptible to abuse than, say, a $7,500 claiming event at Aqueduct during February? If the integrity of the race is the true concern, what does it say about those state officials now controlling racing that this is the only race that warrants this level of protections? If you believe racing is that prone to corruption, why not apply the same protocols to every race?
I think I’ll Have Another is a very good horse who has an excellent shot at becoming that elusive Triple Crown winner. But other horses of recent years about whom one could make the same statement have failed in their bid - Big Brown, Smarty Jones and Silver Charm come to mind - and some outstanding horses have not done it - Spectacular Bid and Sunday Silence. Should I’ll Have Another come up short, the critics will be legion in arguing it was because there were no illegal steps taken by his connections. Should he win, we can expect the New York officials who now rule racing to be gloating because it was a clean result. So, which one of these results is going to further the interests of racing in the United States? In either case the focus will be on shenanigans and not the horse.
I believe firmly that racing should be clean, fair and free of drugs to the extent reasonable. What New York officials have done, however, is focus the spotlight on the unsavory aspects of the sport even though there is no reason to do so. In their zeal to put their stamp on the unwise takeover of racing, they have again demonstrated - in a remarkably short time span - they are on a par with the Vatican when it comes to authoritarian mindlessness.