Saturday, February 6, 2010

Gov. Paterson's lawyer admits Aqueduct casino pick is a 'political process'

Saturday, February 6th 2010, 4:00 AM

Slot machines like the ones seen here at Empire City at Yonkers Raceway could soon be installed at Aqueduct.
Harbus for News
Slot machines like the ones seen here at Empire City at Yonkers Raceway could soon be installed at Aqueduct.

ALBANY - Gov. Paterson's top lawyer conceded Friday that politics was a key factor in picking the winning bidder for an Aqueduct "racino."

Peter Kiernan's stunning revelation came as Paterson hustled to cast the controversial selection of Aqueduct Entertainment Group as squeaky clean, insisting the losers who told of secretive and shady dealings were voicing sour grapes.

"A number of people who lose cry foul, and they think they can get some resonance," Paterson told KISS-FM.

Kiernan, the gov's chief counsel, said the weeding of bidders was more about political reality.

"It's not a typical [bidding] process," Kiernan told the Daily News. "It is not governed by procurement law. It is a political process because you have the three political leaders that have to make the decision."

In the end, the three leaders - Paterson, Senate President Malcolm Smith and Assembly Speaker Sheldon Speaker - agreed on AEG, which has ties to an influential former Queens pol, the Rev. Floyd Flake.

Paterson has been blasted for picking AEG just days after Flake left open the possibility of supporting Attorney General Andrew Cuomo for governor. Paterson insisted Friday the minister's involvement didn't influence him at all.

"Rev. Flake's share is .06%, and the area that he's involved in is not the actual operation of the track. It's the, what they call, the amenities. The community - you know when you build in a community," he said.

Paterson, Kiernan said, initially supported another bidder. He relented on AEG, which was supported by Senate Democratic leaders, to break the gridlock. Silver signed on with several major strings attached.

Asked if the leaders as a group factored in specific technical and financial criteria in selecting the winner, Kiernan stunningly admitted, "I don't believe so.

"They had to reach a consensus," he said. "There were several bidders that if you added up their strengths and weaknesses were all about equal."

Kiernan said AEG was highly rated for being friendly to labor, had female- and minority-owned businesses on board and had relationships with the community.

AEG also ranked high, he said, based on the belief it could become a brand name, particularly with music man Jay Z's company owning a 6% share.

Kiernan said Albany is concerned AEG does not have the required $300 million in upfront payments that other bidders had on hand. The group will have 30 days to get the money.

Now, after one losing bidder said the whole deal "smacked of favoritism" toward AEG, several gaming companies and good government groups demanded an independent review of the selection system.

"It was all done behind closed doors," said Eric Schippers, senior vice president of Penn National Gaming. "It would be good for the public and the other bidders to understand how this decision was arrived at."

Senate Minority Leader Dean Skelos (R-Long Island) has called for hearings into the

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