Are Corrupt NY Politicians Cashing in on Aqueduct Gambling?

slot machine photoWell, it didn’t take long. Danny Hakim of the New York Times reports today:

Three days after awarding a lucrative state contract to a company connected to the Rev. Floyd H. Flake, one of New York’s most influential black pastors, Gov. David A. Paterson summoned Mr. Flake to his Harlem office Monday morning and sounded him out about his political support.

On Friday, New York state awarded a franchise for video gaming machines at Aqueduct racetrack to something called the Aqueduct Entertainment Group (AEG), which will pay the state hundreds of millions for the opportunity. Making the pitch for AEG was Flake, who while a member of Congress in the nineties, faced serious ethics charges.

Two of Flake’s close associates and protégés are Rep. Gregory Meeks and state Senator Malcolm Smith. As we exposed on Sunday, Meeks and Smith are deeply involved in a nonprofit called the New Direction Local Development Corporation that appears to function as their slush fund.

Meeks and Smith have no formal role in AEG but as the New York Post pointed out in an editorial yesterday:

…the list of folks involved with Flake’s Aqueduct Entertainment Group reads like a New Direction class reunion.

There’s Darryl Greene, a minor partner in the venture and a former business partner of Smith’s. His wife was a founding board member of the charity, along with Smith’s wife.

Greene also was convicted in 1999 of stealing $500,000 in city and corporate cash through a minority-hiring scam.

And, of course, there’s Flake himself, who’s long been among Smith’s closest political confidantes.

No surprise, then, that the Rev. Edwin Reed, the CFO of the development arm of Flake’s Jamaica church, doubles as New Direction’s treasurer.

It might seem odd that New York’s first African-American governor would have solicit the support of characters like Flake, but in Empire State politics, nothing is given away, except of course for taxpayers’ money. According to the New York Times:

A week earlier, Mr. Flake had publicly expressed support for Attorney General Andrew M. Cuomo, who is widely expected to challenge Mr. Paterson in the Democratic primary, saying to The New York Times that “he’d be a great governor.”

The comments by Mr. Flake and other black leaders expressing enthusiasm for Mr. Cuomo unnerved Mr. Paterson’s staff as it works to shore up his support in the black community, which would be crucial to the governor’s hope of staying in office.

Could all this just be a coincidence? The New York Times continues:

The effort to build a casino at the Aqueduct racetrack has been a tortuous eight-year-long process, and critics have portrayed the final round of negotiations as Albany at its worst, with no formal process and scant disclosure.

In fact, the Aqueduct Entertainment Group received poor ratings in a ranking of the bidders compiled by the state’s Lottery Division, according to several people with knowledge of the process.

While in Congress, Flake stood trial for 17 counts of fraud, embezzlement and tax evasion. According to Politics in America:

In April 1991, the government’s case against Flake — which consisted of charges that he embezzled funds from a housing project run by his church and evaded taxes — was dismissed after a federal judge barred prosecutors from presenting what one called “the heart” of the case to the jury.

Despite that victory, the entire episode made Flake “damaged goods” in the eyes of many Democrats, hurting his prospects for advancement in Washington.

It apparently does not preclude advancement back home, where a desperate governor is running for re-election.


Rep. Gregory Meeks’ Charity Looks More Like Slush Fund