The New York Post reports today that federal prosecutors are investigating close associates of Rep. Gregory Meeks (D-NY) as part of probe into a possible casino bid-rigging scheme at Aqueduct Racetrack. According to the Post:
Investigators are asking questions about the roles of then-Senate Democratic leaders John Sampson and Malcolm Smith and others who were accused of helping the Aqueduct Entertainment Group (AEG) land a multibillion-dollar casino contract three years ago, sources said.
The AEG bid became controversial after NLPC exposed several individuals involved with the bid, including Malcolm Smith, as also being involved with a charity called New Direction Local Development Corporation. New Direction appeared to operate as a slush fund for Meeks and his friends. It also raised money for Hurricane Katrina victims who never received the aid.
In 2010, then-New York Governor David Paterson granted a lucrative gambling franchise to AEG, touching off a firestorm against the backdrop of the New Direction headlines. Fuel was added to the fire when Paterson met with former Rep. Floyd Flake, a purported AEG “investor,” to discuss his support for Paterson’s re-election campaign. According to the Post:
“Floyd Flake is extremely valuable to AEG because of his political clout in both Queens and New York state,” said Ken Boehm, chairman of National Legal and Policy Center, a government watchdog group. “Now he appears to be dangling his support for the governor until AEG’s bid is fully approved.”
Flake’s protégés include Meeks and state Senator Malcolm Smith. Smith’s former partner, a contractor name Darryl Greene, was also involved in the AEG bid. Greene is a convicted felon who embezzled $500,000 from New York City. His wife was a founding director of New Direction.
Flake, a Protestant minister, makes over a $1 million per year between himself and his wife from his church and “charitable” work. Darryl Green, who was disbarred during the nineties, is affiliated with companies that owed New York state almost $1 million in back taxes. Greene and his wife also personally owed New York state $10,681 in back taxes at the time, according to the Post.
At the time, Meeks charged that racism was behind the scrutiny of Flake and Greene. Meeks alleged that Greene’s critics were “trying to prevent a person of color from trying to be part of the process.”
The controversy was damaging to Paterson who dropped his re-election bid. It also led the state to rescind the AEG franchise, and to launch an investigation into how it was awarded.
Last week, the Post reported that Sampson was under federal investigation as part of a broader probe of Meeks, including the relationship of these two politicians with Edul Ahmad, a Guyanese-American businessman who has pled guilty in a multimillion-dollar mortgage fraud scheme.