Spa Takes Back Seat to Defense of NYRA

The charges and countercharges battle between the New York Racing Association and New York Attorney General Eliot Spitzer continued June 24, with NYRA charging the state's chief law enforcement agent "does not understand NYRA's operations," and that he made "no attempt" to make his damaging report balanced.

NYRA, letting its outside counsel speak for it, used its annual press day promoting the upcoming Saratoga meet to go point-by-point in dismissing the report Spitzer issued the week of June 9. Spitzer said he found widespread illegal acts among NYRA employees and complacency to corruption by NYRA managers and board members.

NYRA chairman Barry Schwartz, who regularly makes the pre-Saratoga event, was a no-show. Terence Meyocks, the NYRA president who Spitzer said should be fired for ignoring problems at the racetracks and running up big expense accounts, attended the gathering but declined to comment about the Spitzer report.

Officials with Spitzer's office, at least one of whom stood in the back of the hotel room unnoticed by NYRA officials during their briefing, declined comment.

Before displaying the bobblehead dolls, baseball caps, and wall clocks NYRA will use as marketing devices this summer and before talk turned to the Aug. 23 Travers Stakes, NYRA's lawyer released a 15-page answer to Spitzer's report. Denis McInerney, the NYRA lawyer, said Spitzer's report is filled with "numerous assertions, inferences and conclusions...that are inaccurate, misleading, out-of-date, or the product of a fundamental misunderstanding about NYRA's operations."

Still, McInerney said, NYRA is "in discussions" with private security companies "to arrange a thorough evaluation of its money control and security procedures and, if necessary, to devise additional cost-effective procedures designed specifically for the track." He did not elaborate, and he left the press briefing before taking any questions. NYRA officials then referred any questions to McInerney.

The lawyer said Spitzer ignored incidents in which NYRA tipped off investigators about potential wrongdoing at the tracks, and that NYRA officials cooperated fully with Spitzer over the past three years of investigations that have led to convictions or indictments of tellers and other NYRA employees for everything from money laundering to tax fraud.

With Meyocks sitting at his side, McInerney defended the NYRA president, who was targeted in the Spitzer report for overseeing a management culture that sought to ignore problems at the tracks. McInerney said Meyocks has "impeccable character and integrity," and that it was Meyocks who ordered many reforms to internal controls, including problems of money shortages by mutuel clerks.

He dismissed Spitzer's attack on Meyocks' NYRA credit-card expenses, which Spitzer said totaled $140,000, including lavish meals. McInerney said the expenses took place over four years, actually totaled $130,000, included his many travels he must make around the country as NYRA president and board member of numerous industry groups, and included many expenses--from cell phones to Kinko's office expenses--that were spent by other NYRA employees.

McInerney defended the entertainment expenses as "a vital element of running a profitable business" that compared to other similar-sized companies, "are extremely well-documented and quite modest."

McInerney sought to portray NYRA as proactive. He insisted it was NYRA that installed cameras on IRS betting windows to thwart illegal activities and launched an investigation into alleged parking lot schemes. He said Spitzer criticized NYRA for a procedure--not having tellers cash in at the end of each day--NYRA halted a year ago.

Spitzer, though, also criticized NYRA for still not having so-called mini dealers count the money tellers handle each day. McInerney said NYRA is now in the process of buying expensive money counting machines to address those concerns.

McInerney said the racing entity will address "legitimate concerns" raised by regulators and investigators, but noted NYRA, as a not-for-profit corporation, "does not have unlimited funds to spend on security and control measures, a very important fact, frankly, that is not acknowledged anywhere in the AG's report." He also criticized Spitzer report for attributing some of the reduction in NYRA revenue-sharing with the state the past few years to waste and mismanagement.

McInerney said Spitzer failed to note state lawmakers and the governor have approved tax cuts for NYRA that have reduced the state's share from bets made at the tracks.

Spitzer, in a written response, dismissed NYRA's claim that it first uncovered and then corrected problems as "inaccurate at best."' Charging that the state-owned tracks NYRA runs "are not well managed," Spitzer said NYRA officials "were cooperative only until damaging information was uncovered." He said compliance by NYRA then came only "through the use of subpoenas."

The attorney general said NYRA's response June 24 "was all about protecting and perpetuating the existing management structure."

"Whether NYRA officials like it or not, they have an obligation to state taxpayers and track patrons to ensure integrity and accountability," he said. " n this regard, proceeds from state-owned tracks are the people's money, not their money."

He said red flags were raised to NYRA as far back as 1995. "If they listened to their accountants, outside consultants, state auditors and regulators and implemented such policies they wouldn't be in this position today," he said.

The attorney general, who again called on the NYRA board to address problems outlined in his report, said NYRA's plan announced June 24 to use new money-counting machines to get daily cash reports on betting as "too little, too late."