SOS: VLT revenues to end? revised

Posted by noonante on January 9, 2013
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , . 1 Comment

The original post was published immediately after Governor Andrew Cuomo’s State of the State address on January 9.  The revisions reflect the actual statutory distribution of net revenues from the operation of the Aqueduct racino.

In his State of the State address, Governor Andrew Cuomo may have taken the first step in eliminating the VLT revenues that have been so crucial to the financial solvency of New York’s horse racing. In a lengthy speech that brought back memories of his father’s rhetorical flourishes, Cuomo only made two references affecting racing, but they were ones that could have the racing industry losing some sleep.

In discussing his proposal to bring non-Indian gaming to New York, he described “Phase I” as building three casinos in upstate New York, with no casino yet for the New York City area. The reason for this is the somewhat dubious rationale that New Yorkers would visit a casino and then start hiking the Adirondacks or bringing along their white water rafts. The troubling part of his idea, however, is the proposed split of casino revenues: 90 per cent would go to education, and the remaining 10 per cent to local governments.  Under the current law governing the racino at Aqueduct, the education fund receives 44 per cent of net revenues, the Lottery gets 10 per cent for its administration, 8 per cent goes to marketing, the VLT operator gets 22.75 percent and the remaining 15,25 goes to “racing support payments.”

If the constitutional amendment allowing up to seven new casinos – expected to be on the November ballot – is still a priority of the Governor, his “Phase I” proposal is one that may appeal to upstate voters because of the relief on municipal budgets and the job creation that would accompany the building and staffing of casinos. And since his proposal would not interfere with the increasingly lucrative revenues being generated by the Aqueduct casino that are so essential to the New York Racing Association, one may be lulled into a sense of complacency.

But there was another line in his speech that should also give the racing industry pause. The Governor said the state ‘may not get the right revenues” from the current racinos. Since the Governor has in the past questioned whether racing should get any revenues from gambling revenues as well as criticizing the differing percentages of net revenues from the racinos around the state, his State of the State may be the first foray at eliminating the revenue that now supports the racing industry.  In fairness, it should be noted that the “racing support payments” under the current law are taken from the vendor fee that goes to the Aqueduct VLT operator, and the Governor did not address the matter of how casino operators would be compensated.

So given that we have a Governor who has acknowledged knowing little about the racing industry, who has appointed a Chair of the NYRA Board with a similar acknowledged lack of familiarity, and who has only had negative views of the gambling revenues that go to the racing industry, I would say the industry has serious reasons to be concerned. This is not to say that the role of casino revenues and their impact on horse racing should not be a serious discussion, but the Governor may have again telegraphed his punches.

“I’m shocked … gambling is going on in here!”

Posted by noonante on January 3, 2013
Posted in: Horse Racing, Political/Social commentary. Tagged: , , , . Leave a comment

Teresa Genaro of brooklynbackstretch.com caused me to revisit a position taken by David Skorton, President of Cornell University and the new Chairman of the New York Racing Association, with her article on the wagering ban for high-level NYRA employees.  When I read the materials for the first meeting of NYRA’s Reorganization Board, only one item jumped out at me:  NYRA’s “corporate officers” would be prohibited from wagering.  There was also a ban on NYRA making political contributions, but, given that NYRA is now controlled by political appointees, that one is a no-brainer.  And, of course, certain NYRA employees  –  for example stewards, vets and gate crew  –  should not be allowed to wager on New York races given their obvious ability to influence the outcome of a race.  But what can the CFO or General Counsel do that would affect the result of a race?

This was one of the few agenda items that provoked any comment by the 17-member Board, of which eight members are appointees of the Cuomo Administration.  When questioned, Skorton responded by saying he was “surprised” such a ban did not exist already, and that he expected top officers to be focused on their job responsibilities.  The Board members who raised the issue quickly acquiesced in Skorton’s explanation.  Although it was widely reported this agreement occurred after the Board was informed its members could still wager, it was not clear to me that their concurrence was motivated by self-interest (or, for that matter, a complete lack of awareness they were being hypocritical).  Rather, I ascribed it to a Board unwilling to pursue any challenge to the Governor’s new guy.

At the time I thought Skorton’s position was, at best, weak.  It’s not surprising that he was “surprised” that top officers could wager since, by his own admission, he does not “know much about horse racing.”  That might lead an inquiring mind, especially one from academia, to investigate further.  As Genaro points out in her article, major racing sites such as Keeneland and the Stronach Empire (Gulfstream and Santa Anita) do not appear to impose such a ban.  (Churchill Downs did not return her call.)

So, what about his comment that he expects top officers to be focused on job responsibilities and not on cashing a ticket?  Will he next prohibit fishing, watching TV, bike riding or having a garage sale?  If he thinks the lure of putting down a wager indicates an insufficient commitment to one’s employer, what would he say of the President of an Ivy League college taking a part-time gig that not only requires travel to Manhattan or Saratoga Springs from Ithaca, but that (hopefully) requires a significant commitment to carrying out one of the Governor’s major initiatives?

It’s one thing to dismiss the Skorton comments as those of someone who has a steep (and quick) learning curve about a business in which he now has a significant role.  (I don’t know what to make of the passivity of the 10 Board members who have prior experience on the NYRA Board.)  What I find troubling, however, is what this says about the new Chair’s mindset on the gambling that is an essential part of the industry.  It is hard to draw any inference other than that he thinks it reflects negatively on someone who does enjoy betting when he cannot trust highly paid executives to carry out their responsibilities while also placing an occasional wager.

There was another offhand comment made at the initial NYRA Board meeting that adds to my concern about where the bettor fits in the “new” NYRA.  In a discussion about the cross-over between racino patrons and those attending the racing, one Board member (who I did not recognize) observed “a gambler is a gambler.”  In addition to being remarkably patronizing, it could only be the view of someone who has never been to a facility where both activities are conducted, and is also ignorant of studies that show there is little cross-over.

It would be the height of irony  –  although pathos might be a more apt term  –  if a controversy over shortchanging successful bettors brings us a NYRA Board that is either ignorant of, or unconcerned about, the wagering fan.

Rambling thoughts to start the New Year

Posted by noonante on January 2, 2013
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , , , . Leave a comment

As we begin 2013, here are some observations about recent events and personal peeves:

  • The adults in the White House and the Congress finally got together to resolve the “fiscal cliff.”  Yes, it took until the last minute  –  or, more precisely, 24 hours after the last minute  –  but I think the fact of a deadline, whether it be legislative, collective bargaining, fiscal year ending, etc.,  makes that dynamic inevitable.  That voices on both the right and left are displeased only enhances the idea that the deal is reasonable.  Those on the left have never forgiven President Obama  –  who campaigned in 2008 as someone who could bridge differences  –  for, uh, trying to bridge differences through the necessity of compromising.  It remains troubling, however, that the Tea Party continues to govern the Republican agenda even though it represents a minority of the GOP.  One report I saw said that “40 to 50” Representatives were able to block passage of any legislation increasing taxes when Speaker John Boehner attempted a compromise two weeks ago.  They are able to achieve that result because non-Tea Party members are afraid of being “primaried”  –  facing a more right-wing challenger in a Republican primary.  To put it in perspective, less than 12 per cent of House members are often able to block action, although I guess that is more democratic than the Senate where one member can prevent some actions.
  • He is often the subject of ridicule, but Joe Biden is the absolutely indispensable member of the Obama Administration.  Yes, he sometimes makes impolitic remarks, but the guy gets things done, whether it is taking the lead on the “fiscal cliff” negotiations or on foreign affairs.  Thanks to The Onion, we have an image of a shirtless guy washing his convertible while drinking beer.  (It’s actually a portrait I enjoy.)  Check out Andrew Sullivan’s post on this (which also includes yet another photo from The Onion.)
  • Slate.com is running a daily count of those killed by guns since the horror of Newtown.  I support the “right to bear arms,” but that does not mean that we should not have sensible restrictions on semi-automatic weapons, high-capacity magazines and background checks anytime someone seeks to purchase a gun.
  • I guess all it took for the Clintons to once again become the target of the right was for Obama to be reelected.  Mitt Romney’s efforts to align with Bill Clinton were ludicrous, but the vitriol now being displayed against Hillary is downright nauseating.  It is one thing to disagree with someone, but right-wing commentators saying that she is faking her current medical conditions borders on the depraved.
  • Ross Douthat, one of The New York Times‘ designated hitters from the conservative side of the plate, makes this New Year’s resolution-worthy suggestion:  each of us should read regularly a publication that has a different political perspective than our own.  While I hate to make resolutions since my chances of sticking to them are limited, this is one I will make.  You can see if I keep it from references over the coming year to those opinion-makers contrary to my 0wn (current) ones.
  • Equidaily.com is an essential daily stop for all fans of horse racing.  It aggregates notable pieces from around the horse racing universe.  I have been flattered that they have often linked to my blog.
  • Am I the only person in America who turns down the sound when Brent Musburger is announcing a football game?  My earliest recollection of him was when he compared a college quarterback to the Mona Lisa  whatever that meant.  But I have since realized that the next piece of useful information he imparts will be the first.  I foolishly left the sound on for last night’s Rose Bowl in which, at the outset, he attempted to inject a level of significance comparable to that of what the Second Coming may be like.  Even in the second half he was telling us where a player was from.  His sidekick, “Herbie,” is no better, and the pair regularly get confused if time is stopped, not knowing if it is for a penalty or timeout.  And this is the only thing the two of them have to pay attention to. My fear, based on last night’s useless commentary, is that they will be doing Notre Dame – Alabama.
  • But I may be too harsh.  One of the towns a player is from is Chandler, Arizona that was featured on last week’s Wait, Wait, Don’t Tell Me.  Arizona, the state that has brought us Sheriff Joe Arpaio, the Secretary of State who doesn’t think Obama is American, and the Attorney General who thinks school principals should pack heat, has an even more distinctive quality.  The Chandler City Hall has a sign over toilet bowls advising people not to drink from the toilet bowl.  The sign is there because the water feeding the bowls is from a recycled gray water that is not potable.  So … otherwise it would be OK?

More guns is solution to gun violence?

Posted by noonante on December 21, 2012
Posted in: Political/Social commentary. Tagged: , , . Leave a comment

I am glad I didn’t hold my breath waiting to see if the National Rifle Association would break from its long-standing tradition and offer a sensible, intelligent solution to the problem of gun violence in our society.  In what can only be described as an angry rant at a “press conference” (at which no questions could be asked), the NRA’s Executive Vice-President said the solution to school shootings is to deploy armed security guards in every school.  (You can read a transcript of Wayne LaPierre’s comments here.)  I think there can be little doubt that this would reduce the incidence of deranged persons shooting multiple children in a school.  But it will do nothing to deter those who want to commit mayhem at, say, a movie theatre, house of worship, shopping center, school bus stop, school bus, playground or any of the hundreds of thousands of locations where innocent people congregate.

Although LaPierre did not venture into the “godless society” idiocy of Mike Huckabee and Newt Gingrich, he did have his own cast of villains.  Foremost is the media which, according to LaPierre, not only “rewards” those who commit unspeakable crimes by publicizing the crimes, but “provokes others to try to make their mark.”  The media also conceals from the rest of us that there are violent video games and “thousands” of music videos glorifying violence, information that is now available to us because of the NRA’s researchers.  Then there are the “Gun-Free School Zones,” which LaPierre portrayed as an invitation to the gun-toting unstable among us.  Finally, we still do not have an “active national database of the mentally ill.”

In his lone reference to the semi-automatic weapons that seem to be the only common feature of the mass homicides we have witnessed recently, LaPierre sneeringly referred to the media’s characterization of the firearms as “machine guns” as proving, as he put it, “They don’t know what they’re talking about.”   He did not explain why a weapon that has as its sole purpose killing as many people as possible in as short a time as possible should be afforded the same level of constitutional protection as a hunting rifle, shot gun or handgun not equipped with a high-capacity magazine.

First NYRA Board meeting is unsettling

Posted by noonante on December 13, 2012
Posted in: Horse Racing, Political/Social commentary, Politics, Uncategorized. Tagged: , , . 2 Comments

The reconstituted New York Racing Association held its first meeting as the NYRA Reorganization Board on Wednesday in a small conference room in Manhattan.  While the takeover of horse racing in New York by state government has been in the works for seven months, I had the unsettling feeling as I attended this meeting that many of the Board members were thinking for the first time about their role in improving the sport.

It has now been a year since the discovery by state regulators that NYRA had not lowered the takeout rate on certain wagers from 26 per cent to 25 per cent.  An “interim audit” by the State’s Racing and Wagering Board in April led to the termination of NYRA’s CEO and General Counsel.  (The interim audit, in spite of numerous flaws, was never finalized;  nor has a review by the State’s Inspector General materialized.)  Governor Andrew Cuomo seized this opportunity to secure a change in the law governing NYRA, replacing a Board that had significant involvement by government appointees to one in which 12 of the 17 members are either appointed by him or the legislative leadership.  Although the law written by the Governor was enacted by the Legislature on June 20, he did not sign it until October 1;  on October 18, he announced the appointees to the new Board.

The Governor’s public decision to take control of racing in May appeared to be a precipitate action, and one accompanied by the type of rhetoric suggestive of meeting an emergency need.  One would think that in the intervening seven months, the now responsible actors would have devoted considerable time to developing an agenda, as well as a plan for moving forward on it.  None of that, however, was on display yesterday.

Seven of the 17 members of the Board, including Chairman David Skorton, are new to the Board.  Skorton, who acknowledged having no experience with racing, is the President of Cornell University and demonstrated a certain adeptness in moving the meeting along, and synthesizing issues that came up.  He also made efforts to encourage discussion of those topics that seemed to warrant further explication.  Nonetheless, one would expect that someone with an admitted learning curve in the business of racing, and of New York racing in particular, would have known that scheduling only four Board meetings for the next year, with the next one not until March 6, suggesting he may not fully grasp the magnitude of challenges he is facing.

The new Board members should be given the benefit of the doubt as they get up to speed.  They also did not receive much assistance in that regard from the 10 experienced hands who had served on the Board.  At several points, agenda items being discussed were interrupted with unrelated matters.  While most such diversions did deal with important issues, at no point did any of the prior Board members identify a list of the most significant matters that needed to be addressed.  Several members had their own notion of critical issues, but I did not get the sense that any one person had a broad vision of the direction that should be taken by NYRA.  Skorton ended up asking NYRA Chief Operating Officer Ellen McClain to prepare such a list before the end of the year.  (McClain and Chief Financial Officer Susanne Stover presented a decidedly upbeat presentation on the current status of NYRA, particularly its robust financial condition.)  The Chairman also realized that going three months without a Board meeting was not a good idea, and said he would schedule another for next month.

One reason for the seeming lack of direction is that eight of the 17 members were appointed by Governor Cuomo, and may not know where he would like to go  –  although they do have a fiduciary responsibility for NYRA and should be exercising independent judgment.  As I have written in the past, I have no idea of the Governor’s vision for New York racing because he has not articulated one publicly.  Given the diffuse nature of this meeting, it would appear that he has not stated one privately either.  There was one telling discussion during the meeting.  It had to do with a proposal to ban wagering by NYRA’s corporate officers.  I did not understand the need for such a ban since there had not been any problems identified in the past from allowing wagering, and I could not think of a possible rationale for the revision.  Nor could at least two Board members who questioned the need for the restriction.  In response to the questions, both Chairman Skorton and NYRA’s counsel offered justifications that were, at best, weak.  Nonetheless, the resolution passed unanimously, suggesting that this Board  –  at least initially  –  was not going to be rocking any boats.

One of the longer discussions had to do with the appearance of the racing facility at Aqueduct.  (This was one of those digressions from the actual agenda.)  There was agreement by those with actual knowledge that it had a dingy appearance and was not even being cleaned regularly.  According to COO McClain, this was because the VLT operator, Genting’s World Resorts Casino, was now the landlord and was contractually obligated to clean the part of the building devoted to the racing operation.  After describing her difficulties working out a solution with the VLT operator, the Chairman asked her to prepare a written summary of the issues before Christmas, and present it to one of the Board’s committees.

That is a useful first step in resolving the problem.  Here is my idea for the second step:  have the Governor call up the head of Genting and tell him to start abiding by the contract and clean the facility.  At this time last year, the Governor was working on a multi-billion dollar no-bid contract to give Genting the right to a casino in exchange for building a convention center.  That deal fell apart  –  perhaps because of the seeming impropriety in doing it  –  but Genting undoubtedly has a considerable interest in building such a casino should that Cuomo initiative on casinos come to fruition.  And let’s not forget that Genting has been a major contributor to Cuomo’s super-PAC.  What we have here is a win-win-win-win.  The Cuomo-appointed Board gets an early accomplishment;  Cuomo gets credit for a positive action affecting racing;  Genting curries additional favor for hoped-for considerations down the road;  and  –  lest we forget  –  the customers of racing can sit in a clean seat without having trash all around them.

It sounds like a minor matter.  But if this new Board cannot get something as simple as this done, my fear is that the unsettling feeling with which I left yesterday’s meeting is only a precursor of things to come.

Musings on politics for the week that was

Posted by noonante on December 8, 2012
Posted in: Political/Social commentary, Politics. Tagged: . Leave a comment

Some random observations from this week’s events and non-events:

  • Isn’t it a little early to be hyperventilating on polls showing levels of supports for candidates for the Presidency in 2016?  I am an avowed political junkie, but even I was getting tired of all coverage before this year’s contest, particularly given how little content was part of that coverage.  Let’s be candid.  There is simply nothing of value that can be said about potential candidates for an election that is 3 years and 11 months away.
  • Whatever happened to loyalty?  Before Mitt Romney selected Paul Ryan as his running mate, I would hazard a guess that 90 per cent of the American public would not have considered him to be a contender for the Presidency.  (Yes, I know I’m now talking about 2016.)  But it took less than a month to distance himself from decisions made by the Romney campaign, implying that the result might have been different had he been listened to by the Boston brain trust.  Specifically, the disciple of Ayn Rand wanted more of a focus on the poor.  The guy who authored the last Republican budget that would severely slash programs for the poor and middle class supposedly wanted to run from those policies as the VP candidate.  Even if what he is saying is true, and setting aside his remarkable conversion on policies affecting the vulnerable among us, could he not have had the basic decency to refrain from the torrent of criticism of his former running mate?
  • What does it say about the mind set of the Republican Party when 49 per cent of Republicans believe that ACORN stole the election for Obama?  That is from Public Policy Polling which added the wry observation, “52% of Republicans thought that ACORN stole the 2008 election for Obama, so this is a modest decline, but perhaps smaller than might have been expected given that ACORN doesn’t exist anymore.”  The 49 per cent figure is remarkably similar to the results from the Pew Research Organization that only 48 per cent of Republicans believe there is solid evidence of global warming.  The figures for Democrats and Independents are 85 percent and 65 per cent, respectively.
  • I only have familiarity with the political environments of Massachusetts and New York, but is there a state in the nation more fascinating than New York?  This week, we saw a group of 5 Democrats form a coalition with Republicans in the state’s Senate to deprive the Democratic Party of what would have been a majority.  Governor Andrew Cuomo  –  a Democrat  –  penned an op-ed in the Albany Times Union in which he characterized the Senate’s Democratic Conference, which has had the majority in only two years since 1966, as a group whose dysfunction is “legendary.”  But the icing on the cake had to be an interview on Albany’s public television station WMHT with Senator Ruben Diaz, a Democrat from the Bronx.  Diaz claimed that the new coalition vindicated a prior group of four Democrats  –  dubbed the four amigos  –  who threatened to join forces with the Republicans in 2009.  That effort, known as “The Coup,” featured incidents such as one side changing the locks on the legislative chamber to deprive the other group of access.  Diaz, incidentally, was available for the interview because he is the lone member of the four amigos who was not subsequently convicted of a significant crime.

Chris Christie and Jon Stewart

Posted by noonante on December 7, 2012
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I have often said that Jon Stewart is one of the most gifted and serious interviewers on TV or radio.  In this clip, he goes back and forth with New Jersey’s Governor, Chris Christie.  Whether you like Christie or not, he and Stewart engage in a lively debate in which honest differences of opinion are discussed in an intelligent way without the name calling so typical of today’s politics.  And he (Christie, that is) had me laughing so hard I cried.

If the link does not work, just go to Stewart’s web site and click on the “Extended Interviews” portion.

Will Cuomo sign OTB bill?

Posted by noonante on December 6, 2012
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , . 4 Comments

In yet another example of the curious functioning of New York’s state government, a bill passed by both branches of the state legislature on June 21 finally reached Governor Andrew Cuomo’s desk on December 5.  The legislation would allow the Catskill Off-Track Betting Corporation to open betting facilities in New York City, replacing those lost when the New York City OTB went out of business in 2010 because of its bankruptcy.  It’s not apparent to me why it would take almost six months for a bill to travel the short distance between the Legislative and Executive chambers unless it is the hope that legislation of questionable merit might sneak through during the holiday season without attracting any attention.

As unusual as this process may be  –  although perhaps it is not so unusual for Albany  –  it is no more puzzling than the inability of a business accepting pari-mutuel wagers to make money.  While it may be theoretically possible for a casino offering table games to lose money, the very nature of a pari-mutuel system should guarantee that the bet taker makes money.  So how did the NYC OTB go bankrupt?  One would suspect that the only conceivable answer is colossal mismanagement, aided and abetted by a healthy dose of patronage.  This is, after all, the entity once run by Allie Sherman, the former head coach of the New York Football Giants.  Prior to one year’s Kentucky Derby, Sherman was asked who he thought would win.  He speculated that the prior year’s winner could repeat.

So how much better will OTB’s be managed by the Catskill operation?  For starters, this is the outfit that accepted the 2002 Breeders’ Cup Pick 6 wagers that resulted in the biggest betting scandal in history.  For those who may not recall, three former fraternity brothers conspired to place six wagers with the Catskill OTB, with a single horse winning each of the first four legs, followed by “all” in the fifth and sixth legs.  One of the three bros worked for Autotote, and he was able to change the tickets after the fourth leg so they now had the actual winners of the first four races.  Why was Catskill picked as the location for the wagers?  The mastermind liked it because, as stated in Wikipedia, “its security was fairly lax …  and also didn’t have a transaction history file.”

Admittedly, this was 10 years ago and that part of the Catskill operation may have been tightened up.  A 2010 Audit by the State Comptroller, however, portrayed an organization with significant issues.  For the period covered by the Audit, 2004 through 2008, the Comptroller determined that the OTB experienced a 15 per cent decline in net handle, and a 37 per cent decline in net operating revenues.  If these trends were to continue, the Comptroller concluded that “the OTB will eventually realize a net loss at year-end.”

As is the case with many audits, it is the response of the audited that is often the most damning part of the picture.  Donald Groth, President and CEO of Catskill, provided a lengthy response that was a rambling, often incoherent, polemic.  Needless to say, he took no responsibility for any of the legitimate shortcomings raised by the Audit, and deflected all criticism to external sources.  One of those was the introduction of VLT’s at racetracks.  How a Cuomo intent on bringing casinos to New York  –  at least he was a year ago  –  will deal with Groth’s apostasy on that issue remains to be seen.  In any event, one cannot read Groth’s audit response and think that this is the leader with the capability to get OTB’s up and running in an efficient and intelligent manner in New York City.

More significantly, however, is how this legislation fits with Governor Cuomo’s vision for the future of horse racing in New York.  I actually do not think he has a vision, and am afraid he doesn’t even have any concrete ideas.  He has obviously decided, however, that the former NYRA had to be replaced with a new entity in which state government appointed all but five of the 17-member governing Board.  We do not know why he thought this was important for the very simple reason he has never said, other than to tie it to the distant possible implementation of casinos.  In a logical world, one would think that placing OTB’s in New York City would be part of the comprehensive review of racing that the Governor has indicated will take place under his leadership.  Since the Legislature approved Cuomo’s takeover of racing with just one dissenting vote, logic would also dictate that the Legislature thinks any significant changes in the betting landscape would await that review, and that the Catskill OTB bill could wait.  Or does it just come down to the same craven political considerations with the attendant patronage that sank the former NYC OTB, with the Governor acquiescing while we do our Christmas shopping?

Awkward photo of the year

Posted by noonante on November 30, 2012
Posted in: Political/Social commentary, Politics. Tagged: , , . Leave a comment

There is something unsettling about this photo.  One of the wonderful aspects of our democracy has been the acceptance of the election results by most citizens, and the comity displayed, even if only superficially, by the combatants after the results.

In this photo, however, I could not escape the sense that this was Obama rubbing it in.  It’s in the Oval Office (perhaps the first time Romney was in it), with Romney having a tight-lipped “smile” and the President casually shaking hands with one hand in a pocket.  I guess it is better than a picture of Romney with food hanging out of his mouth at their lunch, but is this truly the best that could be done by the White House photographer?  Or, was this perhaps the most awkward post-election meeting ever?

MEETING ON A DIFFERENT STAGE — President Obama and former GOP presidential candidate Mitt Romney met in the Oval Office after having lunch on Thursday. Little was released about the meeting, their first since the election.

The curious case of the disappearing Governor, LIPA and NYRA

Posted by noonante on November 20, 2012
Posted in: Horse Racing, Political/Social commentary. Tagged: , , , . 3 Comments

While readers versed in the politics of Massachusetts may think I am talking about the peripatetic Deval Patrick, this is about the Governor of the Empire State who appears to duck responsibility whenever convenient.

While much of the media is obsessed with the so-called Petraeus scandal (and what, by the way, makes men and women acting stupidly a scandal?), there is actual human suffering and misery still transpiring in the New York and New Jersey areas as a result of Hurricane Sandy and the follow-up Nor’easter.  Last week, more than two weeks after Sandy hit, 8,000 homes were still without power from the Long Island Power Authority, and another 32,000 needed repairs to their homes (and certification by an electrician) for available LIPA power to be restored.

Governor Andrew Cuomo has responded to this crisis by forming a committee to conduct an investigation.  He has taken the step of convening a “Moreland Commission,” an extraordinary power he has threatened to use in other situations when he has not gotten his way.  (Incidentally, the Governor may wish to have his Executive Orders subject to proofreading.  This one is entitled an EX CUTIVEORDER.  The second “Whereas” clause says, “storm emergencies have effected [sic], as well as thousands of businesses and private and public services providers charged with the protection of the health and safety of New Yorkers….”)

I do not know anything about LIPA or its reputation.  What I do know, however, is that it was of such concern to the Governor that he held a press conference in April, 2011 to announce that he had “directed” the Inspector General to conduct a thorough review of the Authority.  The IG at the time assured the Governor it would be “swift and thorough.”  It may be thorough, but it’s certainly not swift since, as The Times Union reported last week, they have yet to produce a report.  In February of this year, the Governor issued another press release after signing legislation that “will ensure better service … for power customers on Long Island.”

Who is responsible for LIPA?  Under the state’s laws, the Board of Trustees is supposed to consist of 15 members, nine appointed by the Governor, and three each by the Senate President and Assembly Speaker.  According to their web site, the Board currently has only 10 members.  Two were appointed by the Senate President and two by the Speaker.  Of the nine gubernatorial appointments, only six have been appointed.  Three of those, including the Chairman, have terms that expired almost 15 months ago.  With the ability to make seven appointments since taking office, Governor Cuomo has only made one.  The Chief Operating Officer of LIPA, who was also serving as the acting CEO, has resigned.  According to Dana Rubinstein in Capital, there has not been a permanent CEO since 2010.  Also, see her pieces here and here, as well as The Daily News‘ Bill Hammond here.

It should not take an investigative commission with subpoena powers to realize that failing to appoint the senior management of any organization for any length of time does not help that organization achieve its mission.  That, however, is very similar to what the Governor has done with the New York Racing Association.  As I have written about numerous times, the Governor seized control of NYRA last May with a campaign based on threats and unsubstantiated allegations.  While one would have thought that such extreme action would lead to a completely revamped organization (the original speculation is that it would be completed around Labor Day), almost nothing has occurred in public that would cause anyone to think things will be different.  (That sets aside the question of what, if anything, the Governor thinks needed fixing.)

He did not sign the legislation he wrote in June until October 1.  It took another three weeks to appoint his Board members and, despite assurances from his staff to the contrary, they are not a nation-wide group, but all New Yorkers, many of whom were from the former Board.  All this time, Cuomo has kept in place NYRA’s Chief Operating Officer, whose appointment by the prior Board to become the Chair was such an affront that top Cuomo officials wrote an outraged letter asserting that the appointment was contrary to “regulatory and legal requirements” (without citing legal authority for the statements  –  for which there is none) and not in the “best interests of racing and the taxpayers.”  Last Friday was the six-month anniversary of this letter, with the then COO still the COO, and no CEO on the horizon.

The Cuomo Administration has also touted significant changes to regulations covering equine health and safety as a result of an investigation and compelling report by a Task Force on September 28 that reviewed equine deaths at Aqueduct earlier this year.  The New York State Racing and Wagering Board announced on October 11 that it had enacted numerous rules implementing the emergency recommendations of the Task Force (and getting the credulous Joe Drape of The New York Times to parrot the state’s press release).  If “enacted” and “emergency” means regulations that are not yet in effect, and for which there has been neither public notice nor text of changes on the NYSRWB’s website, I guess you could say this is accurate.  Buried in the NYSRWB press release was a statement that the regulations would actually “go into effect” on December 12, but until that happens we have to wonder if this is yet another Cuomo press release promising dramatic change that never materializes.

The Racing and Wagering Board would have been in the news for another reason last week if the media actually noticed.  The state’s Comptroller, Thomas DiNapoli, released a review of the Thoroughbred Breeding and Development Fund.  The Fund is responsible for promoting and encouraging the breeding and racing of thoroughbreds in New York, and is financed mostly from payments made by racetracks and racinos.  One of the Comptroller’s findings is that the Fund keeps additional revenue from registration fees and advertising, and spends the revenues in excess of spending limits imposed by statute.  The Fund hotly disputed this conclusion in a detailed response by the Chairman of the Board for the Fund justifying its practice.  In his response to this letter, DiNapoli stood by the original conclusions, while also noting that the Racing and Wagering Board agreed with him, saying in a 2011 Report that the Fund’s practice “distorts cost limitation tests as set forth in statute.”  Who is the Chairman of the Board for the Fund who disagrees with the Comptroller?  John D. Sabini.  Who is the Chairman of the Racing and Wagering Board who agrees with the Comptroller?  John D. Sabini.

My first foray into New York’s politics came when I read the Inspector General’s 2010 report on the Aqueduct VLT procurement award to AEG that ended up being reversed in a matter of weeks.  Even though I had spent my professional life in government, including public contracting, I was simply blown away by what the IG’s report revealed.  Two of the three major players  –  Speaker Sheldon Silver and the then-Governor  –   completely abdicated responsibility, leaving a multi-billion dollar decision to the then-President of the Senate.  The Senate engaged in a “process” that was as incompetent as it was venal.  The IG referred his report to various law enforcement officials, presumably to look at possible criminal conduct for which there was ample suspicion.  At a news conference in the past year addressing, in part, his decision to not award a no-bid contract to the eventual successful bidder for the VLT’s, Governor Cuomo was asked a question referencing the botched procurement.  He responded by saying, “I wasn’t here then.”

At the time of both the AEG contract award and the Inspector General’s report, Cuomo was the state’s top law enforcement official as the Attorney General.  But if you are not taking responsibility for things for which you are, indeed, responsible, saying you are not “here” is, unfortunately, all too accurate.  The Governor has ducked responsibility for his oversight of LIPA, and while it is too early to tell if he is taking a similar approach to NYRA, his past performances indicates that may be in the offing.