By Howard Koplowitz
Gov. David Paterson’s selection of Aqueduct Entertainment Group, which has strong ties to influential southeast Queens minister the Rev. Floyd Flake, to build and operate video lottery terminals at Aqueduct Race Track is being called into question by those who believe the pick may have been politically motivated.
Flake’s Empowerment Development Corp. has a 0.06 percent stake in AEG, according to AEG spokesman Andrew Frank.
Three days after Paterson, state Sen. John Sampson (D-Brooklyn) and state Assembly Speaker Sheldon Silver (D-Manhattan) selected AEG for the VLT contract, the governor met with Flake, who told the New York Times a week earlier that state Attorney General Andrew Cuomo would be a “great governor.”
An endorsement from Flake, the politically powerful minister at the Allen A.M.E. Cathedral in Jamaica, carries significant weight in southeast Queens.
A Paterson spokesman earlier told TimesLedger Newspapers that Flake’s involvement in AEG had no bearing on the governor’s selection.
Dick Dadey, executive director of the Citizens Union, a good government group, said the Aqueduct deal “epitomizes all that is wrong with Albany.”
“This has the appearances of an insider deal in which the decision was based less on merit and more on connections,” he said. “There is some element of this truth that this deal may not have been made properly. It’s important for the public to know what went into the deal. Too many questions have been asked for which there has been silence.”
Susan Lerner, executive director of the good government group Common Cause/NY, said the timing of Paterson’s meeting with Flake and the selection of AEG appears questionable.
“I have no way to tell [the decision was political], but it sure looks bad, doesn’t it? It raises all sorts of flags. Our elected officials appear to be tone-deaf as to how this will look to voters. It behooves people at the level of the governor to be more considerate of these concerns and not feed the rumor mill.”
A member of Flake’s congregation said the reverend touted the benefits of the Aqueduct deal during services Sunday.
“His position is that the Aqueduct project is going to provide a lot of jobs,” the church-goer said. “He was advising people, ‘Don’t believe what you read in the papers.’”
State Sen. Joseph Addabbo (D-Howard Beach), who represents the area around Aqueduct, said he would give the governor the benefit of the doubt.
“AEG itself is a credible group,” Addabbo said, noting that questions about the group were only raised after they were selected by the legislative leaders. “If AEG was deemed political, then they shouldn’t have been part of the [bidding] process. I can’t answer for the governor’s actions. If I find out [the decision] was political … I’m going to be against it, too, and we should rethink this.”’
Silver said he agreed to the selection of AEG with conditions, including increasing the upfront payment to the state from $200 million to $300 million and an assurance that anyone who was part of AEG had not been “convicted within the past 15 years of a felony or other crime or offence involving fraud, larceny of any sort, theft, misappropriation or conversion of funds, or tax evasion.”
AEG appeared to not be in compliance with Silver’s conditions because Darryl Greene of the Darman Group, one of AEG’s investors, pleaded guilty to misusing $500,000 in public funds in 1999.
Greene put out a statement Monday saying he was resigning from AEG’s bid, but did not give a reason.
“The video lottery terminal development at Aqueduct is a critical project for the community, Queens and the state. I believe very strongly in the abilities of Aqueduct Entertainment Group, particularly the local development team of Levine Builders, Turner Construction and GreenStar Services, along with the jobs they will create and the product they will produce,” he said. “It is for that reason that I will step aside and relinquish all interest and potential interest in the project and with Aqueduct Entertainment Group.”
Senate Minority Leader Dean Skelos (R-Rockville Centre) has called for a one-day public hearing into the selection of AEG.
“The process has been entirely done behind closed doors,” said Skelos spokesman Scott Reif.
Reif said Skelos “heard things” about a document from the state Lottery Division that ranked AEG as the least qualified out of the five bidders and that the group is going to have a problem making the $300 million upfront payment attached to the deal.
Asked whether Skelos believed the decision was a political one, Reif said, “We just don’t know.”
But Lottery spokesman Jennifer Givner said there was no such document.
She said the Lottery created a methodology that could have been used in the decision-making process, but it did not rank the bidders.
“It did not come into play by any of the parties involved … therefore, we are not releasing it,” she said of the draft.
Assemblywoman Audrey Pheffer (D-Rockaway Beach) said AEG was among her top two picks for the VLT contract, along with S.L. Green, which partnered with Hard Rock Entertainment for its bid.
“We thought their plan is good,” Pheffer said of her evaluation and the community’s opinion of AEG. “As far as the community is concerned, we need to move forward. If they don’t move forward quickly, the people who were unemployed will still be unemployed and the state will keep losing money.”
Pheffer suggested the other bidders who lost out on the contract are trying to undermine AEG.
“Some of the people who didn’t get the contract are feeding part of this frenzy,” she said, referring to the scrutiny of AEG.
Reach reporter Howard Koplowitz by e-mail at hkoplowitz@cnglocal.com or by phone at 718-260-4573.
