Monitor's Comments Indicate NYRA May Be Cleared

The New York Racing Association has made significant strides to improve its operations and to bolster the integrity of the racing industry, according to the federal monitor assigned to oversee NYRA during its deferred prosecution period.

The remarks by Neil Getnick at a Albany Law School symposium Aug. 2 in Saratoga Springs, N.Y., were seen by industry insiders--and especially NYRA officials--as an indication the monitor would issue a favorable report to federal prosecutors later in August that could pave the way for dismissal of NYRA's prosecution.

"I think it might be a good idea for Neil to come up and give his speech again," a beaming Charles Hayward, NYRA president and chief executive officer, told an audience shortly after Getnick made his rare public comments.

Getnick, appointed in March 2004 to keep an eye on NYRA for prosecutors in the U.S. Attorney's office in Brooklyn, told reporters after his speech NYRA "has taken the opportunity since then to go about repairing itself and really has paid close attention to what we call the four pillars of good conduct: integrity, transparency, good governance, and social responsibility. I think NYRA has taken very specific steps to make itself into a good corporate citizen."

Getnick said NYRA went far in improving relations with horsemen, resolving such thorny issues as the $13 million NYRA grabbed from a purse account to pay its operating costs. He said NYRA has "become an industry leader" in dealing with racing integrity matters by shutting down connections to offshore rebate shops and taking what he said is the national lead in equine drug testing.

"Simply put, NYRA has unequivocally said 'yes' to racing integrity," Getnick said. On taking steps to boost wagering integrity, Getnick said NYRA has "an unmatched record of achievement."

Getnick hasn't spoken publicly about NYRA since a year ago when he issued an introductory report on his work. He was appointed as part of a deal in which NYRA would open up its operations to a monitor. If it violated the specific terms of its deal, NYRA would be prosecuted for its role in a tax-avoidance scheme by former pari-mutuel tellers. NYRA already paid a $3 million fine in the matter.

Getnick's daily oversight of NYRA ended two weeks ago. He is now preparing his final report to federal and state officials, which will serve as the basis for whether prosecutors end its case against NYRA or pursue a conviction that could shut down the group that runs Aqueduct, Belmont Park, and Saratoga.

But from Getnick's remarks it became clear the Manhattan lawyer isn't going to recommend prosecution of NYRA. He insisted his remarks weren't meant to provide final details of his report. But in nearly a half hour of commentary at the law conference, Getnick only offered one comment that could be considered criticism of NYRA--that the state comptroller recently issued a critical audit of NYRA's past procurement practices. And then he quickly noted NYRA had taken steps to address those problems.

In an afternoon appearance at the Albany Law School conference, New York State Racing and Wagering Board chairman Michael Hoblock lashed out at Getnick for never having met with him during the past year and a half, according to individuals who heard Hoblock's speech.

Hoblock declined a request for an interview, but in a written statement said: "I was surprised, confused, and disappointed over (Getnick's) remarks."

For months, industry officials have privately criticized Getnick for being too close to NYRA officials. Hoblock took that criticism public Aug. 2 several hours after Getnick gave his glowing speech on NYRA.

"They were not neutral or impartial as you would expect from an independent monitor," Hoblock said of Getnick's comments.

An aide to Hoblock said officials with the racing and wagering board--the agency that directly regulates NYRA--tried for more than a year to get an appointment with Getnick. The aide noted NYRA has not yet been issued a simulcast license from the state because various issues, including the outstanding deferred prosecution.

Racing board officials also criticized NYRA for not yet submitting, as required by law, an audited financial statement to the state. The report was due March 31.

State officials also mocked Getnick's praise of NYRA for breaking off ties with offshore rebate shops. They said NYRA did so only after an indictment of one of the firms with which it was doing business. Officials warned that while Getnick may be almost done with his oversight of NYRA, the state regulators are not, but they did not elaborate.

Getnick later said NYRA is completing an internal code-of-conduct policy that would "really give it the blueprint to ensure its continued good conduct in the future." Getnick also praised one deal launched by NYRA: a simulcasting arrangement with the TV Games Network that some critics said violated no-bid contract rules. He called it "a highly successful business deal" and said NYRA was "fully transparent" with state and federal officials about its details.

"Absolutely stunning," NYRA co-chairman Steve Duncker said to Getnick when he went up to the monitor after he made his remarks at the conference.

"The monitor has been the best thing that NYRA has had in its recent history," Hayward told the audience as Getnick listened nearby. He said Getnick helped NYRA improve its business practices and its management culture. "I was pleased with his view of the culture at NYRA," Hayward said.

Getnick said NYRA on its own and through his recommendations has taken a proactive approach to change. "You can't expect any organization to come out perfect, but what you can hope for and what I think we have seen with NYRA is that it has responded positively and specifically to constructive criticism," he told reporters.

When told he was leaving the strong impression that he would recommend an end to the NYRA prosecution, Getnick said: "I'm not speaking to our ultimate report. However, I think the NYRA record speaks for itself."

Hayward said he expects to hear a decision on NYRA's prosecution from Judge Arthur Spatt, the federal judge overseeing the matter, by Aug. 23.