News & Views
Lawyer widens NYRA probe
By Staff Writer - Times Union
Jun 11, 2004, 09:39
Albany -- Monitor said to be investigating whether racing association used money from accounts set up for phone bettors
The court-appointed watchdog over the New York Racing Association is looking into whether the betting agency misused some of the millions of dollars held in trust for telephone bettors, according to sources familiar with an ongoing inquiry.
Neil V. Getnick is looking into NYRA's use of money held from the special accounts to see if the nonprofit corporation tapped into the accounts to pay bills and other expenses, according to two sources familiar with questions posed to NYRA officials.
The "NYRA One Accounts" are used by hundreds of bettors; each year, about $20 million is wagered using this method. No minimum deposit is required, but some of the biggest bettors leave thousands of dollars with the betting agency, according to people familiar with NYRA One.
Getnick is also questioning the potential misuse by NYRA of about $14 million of horse owners' funds that were held in purse accounts and combined with NYRA's finances, according to the sources.
In addition, the monitor is examining former NYRA Chief Operating Officer Terence Meyocks' expenses, according to an informed source. Meyocks charged tens of thousands of dollars on corporate credit, but NYRA has said the expenses were valid.
NYRA spokesman William Nader said the NYRA One Accounts are "fully funded right now." Asked if NYRA ever used the money held for bettors, he said, "In the past, it might have."
Of the money in the accounts, Nader said: "Everything in there is backed by NYRA. We're not using any of the NYRA One money ... . It's been fully funded for a long, long time."
He declined to provide further information, referring questions to NYRA's chief financial officer, William Byrne.
Byrne said the accounts have been fully funded since he joined NYRA in October, but he was unaware of any earlier uses of the money. He wouldn't provide details of how much money was in the accounts.
NYRA has an exclusive state franchise to run races at the Aqueduct, Belmont and Saratoga thoroughbred tracks. Federal prosecutors secured an indictment in December against NYRA and some former NYRA employees for allegedly participating in a long-running conspiracy to commit tax fraud involving millions of dollars of unreported teller income.
As part of a deal with federal prosecutors, NYRA agreed to submit to a monitor's oversight for 18 months, at which time the charges could be dropped.
Getnick's Manhattan law firm was appointed as the independent monitor in March by U.S District Judge Arthur D. Spatt. The monitor is expected to report any problems with the racing association and to help it comply with all laws.
Getnick has refused to discuss his work. However, he issued his first report on his monitorship to state Comptroller Alan Hevesi on Monday. Most of the report was sealed by Spatt, and the public portions do not identify the new investigations under way.
In the report to Hevesi, who will oversee the monitor, Getnick disclosed that he has "discovered and focused on issues" that were not previously before the court.
He said he is seeking improved transparency by NYRA for regulators and for "horsemen who entrust their funds with NYRA."
Much of Getnick's report was sealed from public inspection and isn't going to be released, said Jeffrey Gordon, a spokesman for Hevesi, "to insure that the monitor's ongoing work is not impeded in any way."
Hevesi revealed that the comptroller's office has begun the first of several targeted audits of NYRA that will be done during Getnick's tenure. The reviews will focus on travel and entertainment expenses, contracting and procurement, NYRA's franchise fee and its backstretch operations.
Richard Bomze, president of the New York Thoroughbred Horsemen's Association, said the monitor appears to be focused.
"They are really digging, and I feel they are very competent," he said.
Getnick also revealed that the tellers union is trying to block a security reform that would prevent tellers who have frequently gone short by at least $1,500 a year from working the betting windows and other money-handling jobs.
The union, IBEW Local 3, took the matter to an arbitrator, who sided with the tellers. A union official said the NYRA policy would deny seniority job rights.
Getnick also noted in his report the importance of video lottery terminals at Aqueduct, and says he has discussed the issue with NYRA's proposed casino partners, MGM Mirage.
Gov. George Pataki, Senate Majority Leader Joseph Bruno and Assembly Speaker Sheldon Silver say they want the VLTs because of the substantial revenues that can be collected for public education.
Silver said Monday he is unsure if he will back Pataki's 64-page bill to create a gaming commission that would include a NYRA oversight board. He said the most important part of the bill appears to be provisions that would assure an Aqueduct casino by requiring any successor to NYRA to be responsible for the roughly $140 million MGM proposes to loan to NYRA.
The report was released on the same day that the president of Magna Entertainment Corp., James McAlpine, met privately with members of the Assembly's racing and wagering committee to continue pressing for a chance to operate the state's thoroughbred tracks with or instead of NYRA.
McAlpine said Magna would immediately return horse owners' money that NYRA hasn't paid back if the company got involved with running the state's tracks.
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