The embattled president of the New York Racing Association resigned Monday evening, in a move NYRA officials hope will quell the firestorm that is threatening their franchise to run the state's three premier racetracks.
Terry Meyocks, 52, who was held out by state officials as ultimately responsible for a rash of mismanagement problems at NYRA, called it quits after seven years in the top post at NYRA. A number of his allies, including NYRA chairman Barry Schwartz and former NYRA chairman Kenny Noe, had unsuccessfully battled to keep Meyocks in his job.
But Meyocks became a symbol, if not an outright target, of overseeing an empire beset with criminal, fiscal and management woes while drawing a $375,000 annual salary. Attorney General Eliot Spitzer, in a scathing report earlier this year, sharply criticized Meyocks for ignoring problems at NYRA. With its franchise on the line, and federal prosecutors deciding whether to indict NYRA or, possibly, officials connected with NYRA, allies of Meyocks say he was fighting a losing battle the past several months to keep his presidency.
Schwartz said Meyocks' departure is part of a major reorganization of NYRA's management. He said the changes "contain both exciting and sad news for me as CEO.''
"No one knows New York racing like Terry, no one cares about New York racing like Terry and no one has ever given more of himself to New York racing than Terry Meyocks," Schwartz said.
Schwartz said NYRA trustees C. Steven Duncker and Peter Karches will become NYRA's co-chief operating officers. He also announced the appointment of J. William Byrne as NYRA's chief financial officer. The day-to-day role of Duncker and Karches and Byrne's appointment were reported last week by The Blood-Horse
With a federal indictment looming over NYRA, state regulators reacted cautiously Monday night. "The reorganization, with the increased oversight by the board of directors, are very positive steps. We're not prepared to say the process of reform is complete, but it's definitely a sign of progress,'' said Darren Dopp, a Spitzer spokesman.
"We're pleased NYRA is taking steps to address the serious concerns that have been raised,' said Stacy Clifford, a spokeswoman for the state Racing and Wagering Board.
"I just want to make sure NYRA does everything in their power that they not only operate in an appropriate, legal and ethical way, but that the public has confidence that that's the way they're going to operate,'' New York Gov. George Pataki said Tuesday morning.
Schwartz and Meyocks did not return calls for comment.
However, in a statement released through a New York public relations firm, Meyocks said he believed that the "top-to-bottom restructuring" at NYRA will result in a "leaner, more efficient NYRA. I firmly believe these changes are positive developments that will result in a healthier, more competitive and more profitable NYRA." Meyocks said that despite his support of the changes, he felt it was in his best interests to resign to pursue other personal and business interests. (Meyocks' Resignation Statement)
NYRA officials sought to highlight the financial background of Duncker and Karches. Duncker, a Thoroughbred owner and trustee of the Thoroughbred Owners and Breeders Association, is a retired partner with Goldman Sachs. Karches is a former top executive with Morgan Stanley, and is also a TOBA trustee. Both will work out of a new NYRA office called the "Office of the Chairman,'' in charge for overseeing the entity's 18 departments; neither will be compensated in their posts that will see them report directly to Schwartz.
Both men have declined to respond to repeated calls over the past week. In a written statement, Duncker said his goal will be to ensure that NYRA is "a well-run, efficient organization that fulfills the mandate given to it by the state of New York to positively contribute to the state's economy through its pari-mutuel tax, real estate and admissions taxes."
In a written statement, Schwartz said the two trustees will help "make sure NYRA's operations are as secure, efficient and profitable as they can be.''
Byrne, the new CFO, held a chief financial officer job at CM Offray & Son, Inc., a multinational textile company, running the fiscal operations of 100 retail stores and three plants.
Whether all this can stop the growing pressure on state officials to re-examine NYRA's franchise remains to be seen. But a number of officials and industry executives say all bets are off if federal prosecutors in Brooklyn indict NYRA or any of its executives. Prosecutors have been looking into what Spitzer called a "culture of criminality'' at NYRA that led to widespread illegal acts by tellers, including money laundering, and schemes that ended up cheating customers.
Waiting in the wings has been a longtime nemesis of NYRA --Magna Entertainment's Frank Stronach -- who has said he would still be interested in NYRA's franchise. The franchise runs until the end of 2007, which would be extended further if NYRA gets video lottery terminals up and running by next spring. Its VLT partner, MGM Mirage, however, has stopped working on the VLT facility at Aqueduct until NYRA's legal problems are made clearer.
State Comptroller Alan Hevesi earlier this month, in his own scathing report, called NYRA "out of control'' and said it should embrace a new independent inspector general to oversee its finances and management. The NYRA statement released Monday night was silent on Hevesi's idea.
In an interview last week, Meyocks was already talking in the past tense about his NYRA job. "Other than my family, the success of NYRA is the most important thing for me. If this reorganization in any way will strengthen and enhance NYRA then that's what should be done,'' Meyocks said.
NYRA said Meyocks will continue to advise top NYRA officials until a replacement is found. In other changes, NYRA said Patrick Kehoe, NYRA's top lawyer and a former counsel to Gov. George Pataki, will now be in charge of NYRA's legal, security, pari-mutuel and regulator compliance departments. Cathleen Marino, the NYRA vice president of customer relations, will take over the parking and admissions offices. William Nader, NYRA senior vice president, will add simulcasting and communications and OTB relations to his job.
Without providing details, NYRA said it is also looking for new security and internal audit chief; those departments were held out for special criticism by state officials. Officials did not say what happened to the heads of those departments.
Richard Bomze, head of the New York Thoroughbred Horsemen's Association, said he had his differences with Meyocks over the years, but considers him a scapegoat in the NYRA controversy. Pointing to board changes at the New York Stock Exchange and Enron and other corporate scandal-plagued institutions, Bomze said, "He was in charge when all this went on, but where as the NYRA board?... There was no oversight. The board was in charge.''
Bomze added of the NYRA trustees, "For some reason those guys seem to be escaping and Terry's taking a fall for them.''
Bomze said the Meyocks departure indicates how serious NYRA is taking its troubles. "Barry has said all along that Terry Meyocks is untouchable. Now all of a sudden he's not untouchable,'' he said.
The horsemen's group's president said there "was never a guy more loyal than Terry.'' He added, "If it could end some of the federal prosecution, that would be the one good thing to come out of this.''