Cooperation, Not Politics, Led to Deal With Prosecutors

The New York Racing Association's political muscle had nothing to do with the deal in which prosecutors agreed to indict NYRA, but not prosecute it if it agrees to certain reforms and pays a $3 million fine, NYRA chairman Barry Schwartz said Thursday.

In an interview with The Blood-Horse, Schwartz dismissed claims by industry insiders who believe NYRA is getting a second chance to keep its franchise because of its deep ties to politicians in both major parties. "It's not so. What got us this deal is all the cooperation with authorities,'' he said.

Schwartz noted that nearly all of the people that prosecutors want replaced were already moved out of their jobs over the past couple years. The agreement calls for senior managers in certain departments to be fired if they were in their jobs during the period of criminal acts, which prosecutors said stretched from 1980 through 1999.

"Basically what got us rewarded, if you want to call it a reward, which it is, is cooperating with them. We were not arguing with the facts,'' Schwartz said. He called the federal and state probes a "wake-up call for all of us on the board to really be very aware'' of the intricacies of NYRA's operations.

Schwartz portrayed the NYRA wrongdoing as something that occurred before he took over the NYRA chairmanship in 2000 and before many of the current trustees joined NYRA. "We have to pay for the sins of our fathers,'' he said. He declined to say how much the probe has cost NYRA in terms of legal, public relations and outside consultants.

Schwartz said the VLT construction is ready to begin again as soon as the project obtains required federal environmental approvals. He said he has been in regular contact with MGM Mirage, NYRA's VLT partners for the massive Aqueduct casino project, throughout the federal probe.

"There is no reason why we're not going to open next year,'' he said.

In a vivid display of NYRA's restored confidence after its deal Thursday, Schwartz said NYRA will lobby in Albany to get its franchise extended beyond its current expiration in 2007. Under state law, if NYRA's VLT program is operational by next April, its franchise is automatically extended until 2013; with construction certain to take longer than next April, he said the goal will be to get the April date pushed back to ensure the 2013 franchise expiration date.

"We can finally see the light at the end of the tunnel,'' Schwartz said. "I honestly believe the pallor over this place permeated to our fan base. Our business stinks. It's like we've been under a black cloud. I believe it's all going to turn around now.''

The NYRA admission of wrongdoing comes after Schwartz earlier this year lashed out at state Attorney General Eliot Spitzer, who spearheaded much of the investigation into NYRA. On Thursday, Spitzer indicated he approved of the deal federal prosecutors cut with NYRA.

Spitzer spokesman Paul Larabee said the attorney general is "pleased'' the U.S. Attorney reached a "conclusion that mirrors our earlier findings, and it should not be clear that NYRA management bears responsibility for criminal conduct at the track.'' He said the imposition of a court-appointed outside monitor to keep an eye on NYRA during the next 18 months "assure that NYRA follows through on its commitment to reform, which Mr. Spitzer believes will make the industry stronger as a result.''

Larabee said the attorney general called for three changes last June: restructuring of NYRA, transparency and public access to financial records and a NYRA management that could ensure compliance with the law. "All three of those concerns and recommendations were incorporated into the (U.S. Attorney's) resolution,'' he said.

Asked if NYRA got off easy with its deal, Larabee said, "He believes it was the proper exercise of prosecutorial discretion. You want to bring a positive resolution, while at the same time extracting an appropriate punishment.'' Was the punishment appropriate: "He believes so,'' Larabee said of Spitzer.

Meanwhile, Gov. George Pataki, a NYRA ally who dispatched a former senior aide weeks ago to meet with prosecutors to warn them of the dangers of NYRA's collapse, backed the agreement. The announcement will "ensure that justice is served and will provide for the continuation of world-class racing in New York,'' said Suzanne Morris, a Pataki spokeswoman. She said the state Racing and Wagering Board will work with prosecutors to ensure the reform plan for NYRA is carried out and to "help restore the confidence of New Yorkers in our state's vital thoroughbred industry.''