State overseer, NYRA officials clash

PHOTOGRAPHER: David Lombardo

Tensions flared Friday afternoon in an oversight meeting for the New York Racing Association, when one state overseer engaged in an attack on the troubled racing corporation that his colleagues wouldn’t condone.

The state’s Franchise Oversight Board assembled to approve a one-month extension of the contract for NYRA’s bet processing company, United Tote, which was scheduled to be dropped after October. A replacement was selected for United Tote this summer, but the contract couldn’t be presented for approval by state overseers because the new NYRA board hadn’t been put in place to approve the selection.

The 17-member, state-controlled board was named Thursday and NYRA wants to use the one-month extension to give the board time to review the contract. A first meeting for that board has yet to be scheduled.

FOB member Richard Aurelio was highly critical of NYRA executives in Friday’s meeting, accusing them of “pure mismanagement” for waiting this long to seek an extension of the contract and for not starting the search for a new bet processing company earlier.

A usually stoic Ellen McClain, president and COO of NYRA, fired back that their hands have been tied since the state takeover was announced. She noted that they had selected a successor to United Tote this summer in a process that began more than a year ago.

But Aurelio found no merit in the argument that NYRA had received marching orders from Gov. Andrew Cuomo’s administration not to make any big moves until a new board was named to run the corporation. “It’s irrelevant to the process,” he said.

Aurelio added that he was very uncomfortable with having to approve an extension with such a short deadline. McClain said she was sorry for his discomfort, but added that at NYRA, “It has been a very uncomfortable nine months.”

FOB member John Crotty sided with McClain, saying there wasn’t anything else NYRA could do about the contract as it waited for a new board. “It was somewhat unavoidable,” he said.

Crotty added that he was all for criticizing NYRA management when they’re in the wrong, but it didn’t apply here.

This sentiment was echoed by the new chairman of the oversight board, Rob Williams. He has stepped in to the position vacated by state Budget Director Bob Megna, who was named to the new NYRA board. A fifth member has not been named to the oversight board yet.

A large part of the stasis at NYRA stems from a condemnation of their actions in May, when they elevated McClain to her current position. State officials called the decision inappropriate, in part because the then-NYRA board hadn’t been cleared of wrongdoing by an ongoing investigation by state Inspector General’s Office.

That investigation continues, but some former NYRA board members were still appointed to the new board. An official in the Cuomo administration said that all of the government appointees have been cleared by the Inspector General’s Office, but didn’t comment on the five NYRA appointees to the board.

The contract extension for United Tote was approved, with Williams noting that one of the first responsibilities of the new NYRA board will be to approve the selection of a new bet processing company. McClain said they will also negotiate with United Tote on a transition process to phase in the new company, which has not been publicly named.

The attack led by Aurelio embodied the main problem in the way the state has been dealing with NYRA since this spring, said Assemblyman Tony Jordan, R-Jackson.

Jordan said there have been multiple mistakes in NYRA’s history, with recent failings including raises for its executive management and an incorrect takeout percentage on winning bets, but argued that the state’s response in recent months hasn’t set the right tone for the racing industry. He highlighted how important the sport is to the Capital Region’s economy, which made it a mistake for the state to allow so much ambiguity in the future of the industry for the last five months.

“It feels to me as if [the Cuomo administration is] playing a game with this very important industry,” Jordan said. “This is a very dangerous exchange, interplay, between the various state regulatory bodies and the body that is called NYRA.”

“It feels like politics are taking over what we cannot afford to have ruined, which is disturbing to me,” he said, noting the four-month delay in passing the legislation creating a new NYRA board and appointing people to that board.

A handful of horsemen agreed, saying the governor and top officials in his administration have gone out of their way to vilify NYRA. They acknowledged that NYRA had put itself in its current position, but argued that nothing was gained by turning the corporation into a punching bag.