NYRA Has History of Run-Ins With Cuomo Family
by Tom Precious
Date Posted: 5/7/2012 5:39:50 PM
Last Updated: 5/8/2012 1:45:02 PM

Aqueduct Racecourse
Photo: Coglianese Photos

The governor of New York is interested in land around Aqueduct Racetrack, is concerned about the internal workings of the New York Racing Association, and word has been floated about the state seeking to take over the majority of NYRA’s board of directors and maybe even scuttle its exclusive racetrack franchise.

Sounds familiar?

It was a battle fought 20 years ago by then-Gov. Mario Cuomo, the father of the current governor, Andrew Cuomo, who is in the infancy stages of his own feud with NYRA.

“If these 23 people do well, imagine how much better we could do with 50,’’ the former governor was quoted in news accounts in 1992 over a threat to pack the NYRA board with gubernatorial appointees unless NYRA entered into a deal to provide $50 million to the state’s budget. (NYRA eventually did, with the help of a plot of land adjoining Aqueduct.)

A few months later, Mario Cuomo was in the press blasting NYRA for bloated executive salaries–levels that have doubled since then.

A few months after that, in the spring of 1993, the former governor was threatening to take away NYRA’s license to run the three Thoroughbred tracks in New York unless it paid more than $4 million in pari-mutuel taxes. His then-economic development czar talked of a major overhaul in NYRA operations, floating a plan to merge it with New York City Off-Track Betting Corp., which has since closed, and to create a publicly owned racing agency in the state.

Flash forward to the current NYRA matter, and Andrew Cuomo May 7 described the operators of Aqueduct, Belmont Park, and Saratoga Race Course as having “a troubled path almost for a few decades now.” He noted NYRA’s past run-ins, including criminal, with various prosecutors and regulators. He called it the “never-ending list of problems” for NYRA.

But Cuomo stopped short of saying he and legislative leaders are looking at ending NYRA’s franchise, which expires in 2030. In the most recent franchise renewal a few years ago, NYRA gave up its long-standing claims of ownership of the three tracks.

“I don’t know that NYRA can lose the franchise,” Cuomo told reporters May 7 at the Capitol.

He noted NYRA has a contract with the state. “The question is how do you fix NYRA? How do you make it better?” he said. “How do you make it operate better than it has been operating?”

The governor said racing is an important economic development tool for New York. “We want to see it do well,” he said of NYRA. “The question is, ‘How does the state best accomplish that?’ "

One idea is, not unlike Mario Cuomo’s plan 20 years ago, is to change the makeup of the NYRA board to give state appointees–now a minority on the panel–majority status to make hiring and other decisions. Other top advisers already suggested that purses, which have gone up with Aqueduct’s new video lottery terminal casino, need to be addressed to possibly shift more of the proceeds to the state.

Like the media stories in 1993, there is speculation that NYRA might not be able to survive its latest scandal. But NYRA has battled a long line of governors, attorneys general, racing regulators, and others in Albany since it was created in 1955.

The newest episode led to the firings of NYRA president and chief executive officer Charles Hayward and legal counsel Patrick Kehoe. Racing regulators said Hayward and Kehoe may have known that a state law requiring pari-mutuel takeout rates on exotic bets to be lowered by one point to 25% had expired. The higher rate was in place 15 months longer than permitted by law, leading to the overcharging of bettors by more than $8.5 million.

Hayward said he is “extremely disappointed”’ in his firing by the NYRA board, and said an interim report by the New York State Racing and Wagering Board was based on “flawed and admittedly incomplete” information.

“I expect to be fully exonerated when all of the facts come out,” Hayward said.

In a May 3 letter to NYRA chairman C. Steven Duncker, Hayward’s lawyer said the former NYRA boss told the board how there was no move to deliberately keep the takeout rate inflated, and that Hayward has a long public record of pushing for lower takeout levels.

The letter was sent to Duncker by Eric Corngold, a Manhattan lawyer representing the former NYRA president, before he was fired. Corngold, a respected former federal prosecutor and onetime top white-collar anti-fraud lawyer under Cuomo when he was state attorney general before becoming governor, said it “makes no sense” for anyone to conclude that NYRA or Hayward “knowingly attempted to set higher rather than lower takeout rates.”



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