Tragedy Or Farce At The Aquaduct?

If William Shakespeare were still writing today, the Inspector General's report on the State's selection of a VLT operator at Aqueduct Racetrack would be grist for his mill. He could play it as tragedy or farce.

If not the Bard, how about Mario Puzzo? Excerpt after excerpt from Sen. John Sampson's testimony created the expectation that in the next excerpt he'd say, "Oh, yeah. The FBI guys said Michael Corleone did this, Michael Corleone did that. So I said, 'Yeah. Sure.'"

More stunning than the report's tale of corruption, which is quite impressive, is the record of incompetence. Even allowing for the fact that some witnesses chose to look stupid rather than guilty, the rank buffoonery which was required for this assault on the New York taxpayers is jaw-dropping.

On February 19, 2008, Section 1612(e) of the Tax Law, under which Aqueduct VLT vendor was to be selected, was enacted. This law studiously avoided any structure to the selection process and avoided the normal lobbying restrictions. Moreover, it required that Gov. Eliot Spitzer, Sen. Joseph L. Bruno, and Assembly Speaker Sheldon Silver, two of whom (at least) hated each other, unanimously agree on the selection of a VLT vendor for Aqueduct Racetrack. Brilliant! Of course, before the ink on Section 1612(e) was dry, Spitzer was gone.

By October 23, 2008, Bruno was also gone and Sen. Dean Skelos, his successor as Majority Leader, agreed, after some hesitation, with Silver and Gov. David A. Paterson, to the selection of Delaware North. Delaware North, however, declared that it couldn't meet its financial obligations and, in March 2009, was deselected, Gov. Paterson was slapped around by the press, and it was back to the drawing board.

The lesson that Gov. Paterson and Speaker Silver apparently took from this experience is that leadership will be punished.

By then, Sen. Malcolm Smith had replaced Dean Skelos as Majority Leader and President Pro Tempore of the Senate and he took a different lesson: to wit, there are more ways to win at VLTs than by getting three sevens. Sen. John Sampson, who succeeded Smith as Majority while Smith continued as President Pro Tempore, took the same lesson.

In the next round of proposals, two of the six proposers were Steve Wynn and Aqueduct Entertainment Group (AEG). I mention Wynn only because many of the people involved in the process believed his to be the best proposal, and he might have been selected, but eventually he threw up his hands in disgust and withdrew. It's important to remember that, when you have a State government as bad as New York's, one of the costs is the inability to do business with people who can't stand the stench. AEG was a consortium populated by some legitimate players and some unsavory (or, at least, tainted) characters and it had lobbyists with good connections to Senate Democrats. Among its principles were a couple of Queens Democrats, friends of Sen. Smith, whose $1.25 million investment consisted of a promissory note with no specific repayment terms. Another side agreement allowed them to "invest" $10 million more in the same manor and it put one of them on the payroll for $25,000 per month. The relationship between Smith and these AEG principles caused Smith to announce that he was recusing himself, although he clearly never did.

In the aftermath of the June 2009 Senate coup, Sen. John Sampson entered the fray and grease now had to be spread in Brooklyn, Sampson's territory. (As portrayed in the report, the immediate irrelevance of Malcolm Smith, still President Pro Tempore, is breath taking.) According to emails, Sampson "insisted" that a specific Brooklyn developer be added to AEG's project. Sampson showed his gratitude by sharing, with AEG's lobbyists, confidential information from other bidders and internal Senate analysis.

In addition, the members of AEG were given specific instructions for campaign contributions, from subsidiaries and related companies to the campaigns of enumerated Senate Democrats, aggregating somewhere north of $100,000. No contributions were to come from directly from AEG or its members.

Meanwhile, one floor down, Gov. Paterson, chastened by his Delaware North experience, saw no evil, heard no evil, and was determined to speak no evil. The Lottery Division had warned the Executive Chamber about AEG's problems but the Governor's senior staff protected him from all such unpleasantness. The Governor had made it clear that he, the chief elected (sort of) official of the State of New York, didn't want to get involved. The only thing he wanted from the process was not to be embarrassed, a task that seems increasingly difficult. Ultimately, the Governor made a decision to support Sampson's choice, AEG, without consulting his staff, which had important relevant information it had never shared with him.

Speaker Silver was better informed than the Governor but no more courageous. He knew that Sen. Sampson's choice was a bad one but instead of displaying leadership, he played the role of sniper, giving a conditional approval, knowing that AEG couldn't meet the conditions.

So that's who has been running the State: corrupt Sampson, cowardly Silver, and clueless Paterson. It's one more similarity between New York State and the Land of Oz, where three of the principle characters were lacking a heart, courage, and a brain.

In its 308 pages, the IG's report has a cast of dozens: a few heroes, more villains, an ample supply of cowards, clowns, and charlatans - and nineteen and a half million victims. I decided not to mention anyone who wasn't elected by the people of New York to a position of trust. The amount of evidence that was gleaned from emails, a prosecutor's best friend, might suggest that such corruption is routine, even mundane. Or, perhaps, it reflects the attitude of Lady MacBeth when she said, "What need we fear who know it when none can call our power to account?"

The testimony itself is a mix of staff members recalling their frustrations, others recalling their failures, still others invoking the Fifth Amendment, and a few, including Sen. Sampson, consistently and equally forgetful about minor details and significant events.

The several typographical errors in the report suggest that it was released in haste. It can be argued that there are legitimate reasons why this report should have been rushed out before the election. On the other hand, it can be speculated that Andrew Cuomo, who expects to be the next Governor, wants not to have to deal with the chaos of a Democratically-controlled Senate and may have nudged the report into publication. By the time this piece is run, we will know if it helped.

In 2006, Chris Callaghan was the Republican candidate in the election for New York State Comptroller. Mr Callaghan receieved the endorsements of the New York Times, the New York Post, the New York Sun and the Times Herald-Record among others.