Jurors at former state Senate majority leader Joe Bruno’s federal corruption trial heard about Bruno’s efforts to influence who runs the New York horse-racing franchise during trial testimony on Tuesday.
Two leaders of the New York Racing Association during 2004-2006 testified that Bruno sought a role in racing management for Timothy Smith, a national thoroughbred industry leader with ties to Jared Abbruzzese, the businessman from whom Bruno is accused of accepting $440,000 in bribes in 2004-2005.
Smith was an advocate for privatizing the state racing franchise when it expired at the end of 2007, replacing NYRA with a private operator. He and Abbruzzese started a group called Friends of New York Racing, which later led to Empire Racing, a private bidding group chaired by Abbruzzese.
At an earlier point in 2005, Smith had sought to become NYRA president to reform the debt-ridden and near-bankrupt nonprofit corporation often plagued in recent years by mismanagement allegations.
Interest in the franchise renewal increased after the state agreed to allow video lottery terminals at the Aqueduct track in Queens in 2001, though the VLT parlor didn’t open for a decade.
There has been testimony about a 2005 round of golf at a Loudonville country club involving Bruno, Smith, Abbruzzese and C. Steven Duncker, then NYRA’s co-chairman.
Charles Hayward, president of NYRA at the time, had a meeting with Bruno and his staff in Albany in November 2005 in which Bruno sought a role for Smith.
“Senator Bruno expressed a desire to somehow have Tim Smith included in the franchise discussion,” testified Hayward, who was fired by NYRA in 2012 in an unrelated scandal.
Hayward said he took Bruno’s statement to be only a suggestion, but Charles Torani, who was Bruno’s appointee to the state Racing Franchise Oversight Board, then called him immediately afterward to reinforce the message that Bruno wanted Smith in — and also Duncker pushed out. Duncker subsequently lost his role as co-chairman but remains on NYRA’s board of directors.
Duncker testified that he was an advocate for maintaining NYRA as the franchise operator and for keeping it a nonprofit organization that reinvests proceeds into its racing facilities, rather than converting it into a private, for-profit corporation
Ultimately, NYRA in 2007 retained the franchise to operate the Saratoga, Belmont and Aqueduct tracks for another 25 years, but Hayward said he took Bruno’s views seriously at the time.
“Senator Bruno was a very powerful man in government and in racing, and you would be a fool not to take his concerns seriously,” Hayward said.
=However, Albany real estate developer John Nigro, one of Bruno’s appointees to the ad hoc committee to select a new franchise operator, said Bruno never sought to influence his vote. The committee majority, including Nigro, voted in favor of a bid by Excelsior Racing, a group led by the Steinbrenner family and Richard Fields. Nigro was one of two defense witnesses to testify Tuesday, the first day to include defense testimony.
“Did Senator Bruno try to influence your decision?” inquired defense attorney E. Stewart Jones of Troy.
“No,” Nigro responded.
Neither Excelsior nor Empire Racing won the franchise. A deal struck by Gov. Eliot Spitzer in 2007 allowed NYRA to keep the racing franchise in return for conceding on the contentious issue of who owned the three tracks and other real estate assets held by NYRA. The agreement established that the tracks — which Hayward estimated together are worth $1 billion as real estate — are owned by the state, not NYRA.
Bruno, 85, of Brunswick, is on trial in U.S. District Court on two charges of honest services fraud — allegations that the powerful Republican accepted payments from Abbruzzese to influence his official actions, including those involving the racing franchise renewal. Bruno has denied the charges.
Bruno is accused of accepting $360,000 between March 2004 and August 2005 for what prosecutors contend was a non-existent business consulting job, and $80,000 from Abbruzzese for an unpromising race horse that equine professionals said was worth far less.
He is being tried for the second time, after his original two convictions at a 2009 trial were overturned on appeal.
Two more prosecution witnesses — Motient Corp. lawyer Robert Macklin and accountant Myrna Newman — testified they didn’t know what Bruno did in return for $20,000 per month he was paid by Motient, an Abbruzzese company, in the first six months of 2005.
Another defense witness, former Sage Colleges president Jeanne Neff, testified that a plan to renovate lab space at the Troy campus and establish a science business incubator originated with the college.
She said she knew of no involvement by Abbruzzese.
The prosecution contends that a $2.5 million state grant Bruno arranged for Sage Colleges was a reward to Abbruzzese. Abbruzzese was an investor in Evident Technologies, the company that moved into the lab space.
Testimony before U.S. District Court Chief Judge Gary L. Sharpe will resume at 10 a.m. today.