Saturday, June 19, 2010

Insider Leaks Mar Plans for Aqueduct Casino by Danny Hakim - NYTimes.com

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New revelations of insider leaks involving the proposal for a casino at Aqueduct Racetrack in Queens have further marred a selection process that has attracted the attention of state and federal investigators.

John L. Sampson, the leader of the State Senate, said Friday that last year he gave an internal Senate assessment of the various bids to a lobbyist for one of the bidders, the Aqueduct Entertainment Group.

Mr. Sampson, a Brooklyn Democrat, said that the document had never been considered confidential and that he did not believe that seeing them gave Aqueduct Entertainment an advantage. The company won the bidding but was later disqualified by state officials, who said the financial background of some of its investors had raised red flags.

The document and Mr. Sampson’s role have emerged in an investigation of the Aqueduct casino bidding process by the state inspector general, Joseph Fisch. Mr. Sampson is one of three senators who have been subpoenaed as part of the inspector general’s investigation.

It is not clear what, if any, legal or ethical consequences Mr. Sampson might face.

Still, some government watchdogs said the latest development was typical of the kind of behind-the-scenes dealing that has come to characterize the way many things are done in Albany.

Mr. Sampson maintained that he did nothing wrong.

“The document was not confidential,” he said. “It contained all the information, public information, that was constantly going back and forth.”

The New York Post reported Mr. Sampson’s role on Friday.

Much of the information in the detailed memorandum, however, was not generally available in September, when the document was produced. Senate officials made it public on Friday.

The competition to choose the operator of a slot-machine casino at Aqueduct was conducted in an unusual manner. Instead of following normal procedures with strict guidelines, awarding the contract was left exclusively to the governor and the leaders of the Senate and the Assembly.

The Senate was long thought to favor Aqueduct Entertainment because the Senate president, Malcolm A. Smith, has close ties to the Rev. Floyd H. Flake, who at the time was a minority investor in the company.

Mr. Sampson said he was simply trying to prove a point to Aqueduct Entertainment’s lobbyist, Carl Andrews, after the two men argued about its bid.

“Andrews and I had a heated exchange because he heard that the Senate was not considering A.E.G. because they submitted one of the lowest bids,” Mr. Sampson said. “He confronted me, and I told him that is true.”

The two men argued, Mr. Sampson said, and finally, he said, he told Mr. Andrews, “You know what, I’ll prove my point to you.” He said he then gave Mr. Andrews the document to show him where Aqueduct Entertainment stood.

Mr. Andrews declined to comment on the conversation.

“It’s disheartening at times when you’re working as hard as you can to do what you can, and then there’s innuendo and allegations that you’re in a corner, doing things that are unethical or criminal,” Mr. Sampson said.

He added that he did not regret giving Mr. Andrews the document.

Senate officials noted that the inspector general’s inquiry was directed at the Paterson administration.

“The inspector general has no authority over the Legislature,” said Shelley B. Mayer, the chief counsel of the Senate Democratic majority. “We’re participating as a cooperating group of people who have documents and testimony, things they want to hear.”

The Senate has not always been cooperative, however, initially fighting subpoenas from the inspector general.

“It’s mind-boggling,” said Blair Horner, legislative director of the New York Public Interest Research Group. “It just shows how ridiculous the process was, that anyone could think it was O.K. to offer up internal documents to the lobbyist of one of the bidders.”

Spokesmen for two other bidders — one led by Delaware North, a company in the Buffalo area, and the other led by SL Green, a Manhattan development company — had no comment.

Legal experts said it could be difficult to make a case against Mr. Sampson because no formal procurement process was set up by the governor’s office last year, which critics said led to much of the chaos that followed.

Mr. Fisch’s office could refer the case to the Legislative Ethics Commission if it found grounds for action against the Senate. But the commission has never been known to undertake an investigation, and it is not clear whether a district attorney would see any legal issue in the Senate’s leaking one of its own internal documents, since there was no formal procurement process. Federal prosecutors are also reviewing the Aqueduct matter.

Senate officials would have clearly preferred that the issue not become public, and Mr. Andrews has been fighting to quash a subpoena issued by the inspector general’s office in the case.

Efforts to build a casino at Aqueduct have been under way, on and off, for the last decade.