Law firm says NYRA withholding report critical of managers (with document)

PHOTOGRAPHER: David Lombardo

The former internal watchdog of the New York Racing Association is repeating allegations that NYRA’s board of directors is sitting on a 36-page report that will shed light on the ongoing takeout scandal that prompted the state to take over the beleaguered racing entity.

In court filings submitted Thursday by NYRA’s former integrity counsel, the law firm Getnick & Getnick, NYRA is accused of sitting on a report from June 2011 that details two unfinished integrity investigations. Those investigations include details about NYRA’s failure to fix an incorrect takeout percentage on winning exotic bets over a 15-month period, according to information Getnick & Getnick provided to the state Racing and Wagering Board.

The investigations were abruptly cut off in March 2011, three months before the report was delivered, when the firm was let go by NYRA, almost two years before its contract was set to end. Getnick & Getnick is trying to recoup payment for the rest of that contract, and Thursday’s filing was the latest entry in that court battle.

Supporting document

Read Getnick & Getnick’s court filing on DailyGazette.com’s Capital Region Scene blog at www.dailygazette.com/weblogs/capital-region-scene.

NYRA has refused to comment on the report, which was first referenced last month in the state racing board’s interim report on the takeout scandal. The report indicated wrongdoing by NYRA President and CEO Charlie Hayward and general counsel Patrick Kehoe, who have both since been fired.

The racing board said NYRA has revealed “part” of the report that they deemed to be related to the investigation. NYRA’s current integrity counsel was supposed to verify that all the pertinent parts of the report were released to the state racing board, but this question remains unresolved.

Getnick & Getnick has said it would hand over the entire report, but NYRA’s claim of attorney-client privilege prevents it from doing so. Additionally, the firm added that it has been told this privilege keeps it from providing “any other information” to the state racing board.

“[Getnick & Getnick] wishes to cooperate with the state’s investigation but has been blocked by NYRA,” read the court papers. The legal action is filed in U.S. Bankruptcy Court for the Southern District of New York.

In a previous statement to The Gazette, state Sen. John Bonacic, chairman of the Senate’s Racing Committee, said: “NYRA should waive its privilege with its so-called integrity counsel to release any remaining documents.”

The report represents just a small percentage of the thousands of documents the state racing board has requested from NYRA as part of its investigation. NYRA has refused access to “many documents” based on “legal privilege.”

It is not clear how the imminent takeover of NYRA by the state, which is pending the passage of legislation and new board appointments, will impact future disclosure for the state’s investigation, which includes a review by the state Inspector General’s Office. The governor’s office did not respond to a question on this topic.

NYRA board member John Hendrickson has said he hopes the new leadership of NYRA will mean a more open environment. Fellow board member Charles Wait walked away from questions on Tuesday about future transparency changes.