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NYRA Monitor Files First Public Report with Court
The federal court-appointed Monitor for the indicted New York Racing
Association (NYRA) today filed the first report of its progress with
the United States District Court, Eastern District of New York. The
Honorable Arthur D. Spatt, who is presiding over the case, has ordered
that portions of the report, including a detailed list of ongoing concerns
and investigations, be sealed until further notice in order to ensure
that the Monitor’s ongoing work is not impeded in any way. The
Office of the State Comptroller called for the appointment of an Independent
Private Inspector General in its September 2003 report on NYRA.
On March 1, 2004, Judge Spatt, after considering the recommendations
of the United States Attorney and the State Comptroller, appointed
the law firm of Getnick & Getnick as the Monitor of the racing
association as one of several conditions agreed to by NYRA, in exchange
for a deferral of prosecution on the federal indictment. Among those
conditions, NYRA has agreed to accept the Monitor’s direction
and recommendations to ensure that it complies with all federal, state
and local laws and regulations and with the provisions of the Agreement.
The Monitor has the authority, when appropriate, to suggest structural
reforms. The Agreement also provides that the Monitor reports to and
receives direction from the Comptroller Alan G. Hevesi and his designated
staff, as well as the US Attorney’s office.
“My Investigations Division has been working very closely with
the Monitor and the Racing Association to identify the failures that
led to NYRA’s indictment and develop both short and long term
solutions that will protect the integrity of the racing industry in
New York State,” Hevesi said. “NYRA’s chance to avoid
a criminal conviction by complying with the terms of the Deferred Prosecution
Agreement is a unique opportunity to bring about meaningful reform
in its organization. We hope that the NYRA will take advantage of this
opportunity and carefully scrutinize all aspects of its operations
with an open mind to making necessary changes and improvements.”
NYRA was charged with serious federal crimes, including one count
of conspiracy to defraud the United State and three counts of aiding
and abetting false tax filings. Various employees of NYRA who had worked
in its pari-mutuel department also were charged.
The report, which covers the first 60 days of the Monitorship, reports
that the Monitor has:
- Established a physical presence at the racetrack seven days per week.
It will move from track to track as the racing schedule changes, but
maintain a continual presence at Aqueduct where the NYRA administrative
offices are. It currently has an operation established at Belmont Park.
- Communicated and explained to NYRA employees and members of the New
York Thoroughbred Horsemen’s Association about the Monitor’s
responsibilities and also the obligations of all NYRA officers and
employees to cooperate with the Monitor.
- Established a fully staffed Integrity Hotline to enable individuals
to share information with the Monitor about potential wrongdoing
and other concerns.
- Arranged to attend meetings of the executive committee, stockholders,
the Board of Trustees, and Board of Trustee Committee meetings, and
will attend these meetings throughout the Monitorship.
- Held frequent meetings with the Comptroller’s office and various
other agencies including the New York State Attorney General’s
office, the State of New York Racing and Wagering Board, the New
York State Thoroughbred Racing Capital investment Fund, and others.
The Monitor also reviewed NYRA’s compliance with the terms of
the Deferred Prosecution Agreement. It reported that NYRA had restructured
senior management and the pari-mutuel, legal, security, internal audit,
accounting and human resource departments; ; sought an IRS advisory
opinion regarding the proper accounting and tax treatment of funds
that NYRA receives from and pays to the New York State Thoroughbred
Racing Capital Investment Fund; and worked towards completing the Video
Lottery Terminals at Aqueduct Racetrack.
“The Monitor is doing an excellent job, and the vigilance it
has brought to this task will lead to significant steps toward the
goal of reforming this industry and creating an effective business
model that will provide long-term professional oversight,” Hevesi
said.
The Comptroller’s office has begun the first of several audits
of NYRA that will be done during the course of the Monitorship. Areas
to be audited include travel and entertainment expenses; contracting
and procurement; NYRA’s franchise fee; and backstretch operations.
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Click here for a copy of the Monitor's report
Albany Phone: (518) 474-4015 Fax:(518)
473-8940
NYC Phone: (212) 681-4825 Fax:(212) 681-4468
Internet: http://www.osc.state.ny.us
E-Mail:press@osc.state.ny.us |
