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Anne M. Eberhardt

Lobbyist Given Info on Other Aqueduct Bidders

Lobbyist for AEG provided details about competitors' bids for Aqueduct casino.

A politically-wired lobbyist for a bidding group that initially won the development rights to the Aqueduct casino project was provided details about competitors’ bids by the top Democrat in the New York state Senate.

Senate Democratic conference leader John Sampson said June 18 that he gave the information to Carl Andrews, a former state senator, who represented Aqueduct Entertainment Group at the Capitol. The AEG consortium was awarded the casino rights, but the state earlier this year yanked the deal not long after revelations that federal and state investigators were looking into the award process.

The Brooklyn Democrat said he did nothing wrong and that the documents were not confidential and contained information previously shared with all of his fellow Democrats in the state Senate.

Sampson said he gave the documents – two different memos dated from last September and November – to Andrews sometime last November “to prove” during a “heated exchange” that the lobbyist was wrong in his claim that AEG was not the lowest bidder at the time. Sampson said the documents did not affect the AEG bid, although bidders were later able to amend their offers to the state.

Sampson said he had no regrets giving the documents to Andrews, and said he volunteered the information to the state Inspector General’s office for its investigation of the now-scuttled Aqueduct awards process that gave the casino to AEG. The state has since begun a new bidding round – more closely following state procurement rules than the secretive and moving-target ways of the previous process – with a goal of awarding a casino developer in early August.

“It’s disheartening, at times, when you’re working as hard as you can to do what you can, and then there’s innuendo and allegations that you’re in a corner, doing things that are unethical or criminal,” Sampson told reporters at the Capitol.

The documents Sampson released to reporters June 18 include a range of financial details about the various bids at the time. While Sampson said the memos were public and could have been given to any of the other bidders’ lobbyists – though they were not – they included frank discussions raising red flags about some of the bidding groups.

One memo “to members of the Senate majority” dated Sept. 30, for instance, said Las Vegas developer Steve Wynn, who later dropped out of the bidding, was involved in the Aqueduct bidding “strictly in a push to bring full Class III gaming to New York.” It added that Wynn “doesn’t really care about the facility or horse racing. If he had it his way he would dismantle the grandstand and use the property for other uses.”

The same memo questioned the ability of some bidders to work with organized labor, which is a potent force at the state Capitol in New York. It noted, for example, that the Hotel Motel Trades Council “strongly opposes” a bid by Penn National Gaming.

The memos also depict the New York Racing Association playing a role behind the scenes. The September memo said NYRA “wants whoever is selected” to stay within the parameters of a previously approved environmental review plan in order to speed construction. “Branding – NYRA wants someone with a major brand to be selected,” the memo states, which added that one of the other bidders, SL Green, “feel they have a good working relationship” with NYRA.

The memo also noted problems with the AEG bid, including a claim that the state Lottery Division, which runs the racino program in New York, “is having problems with Karl O’Farrell and whether he is a part of this organization.” O’Farrell was founder of Australian-based Capital Play, which was part of an earlier group making a run for the Aqueduct casino.

Most significantly, though, the memos include precise details on bidding offers for up-front franchise fee payments by the various groups, how they would finance their projects and judgments on how well each of the bidders were doing on relations with community groups in the Queens area and what their plans were for involving minority and women-owned businesses in the casino project.

Sampson released the two documents he provided to Andrews following a report on the matter by the New York Post.