News & Politics

Aqueduct Racino Deal Investigated, Directly and Indirectly; Bidders Reportedly Offered Right to Amend Documents


The selection of Aqueduct Entertainment Group for the “racino” video lottery contract at Aqueduct Racetrack continues to provoke suspicion. Not only federal investigators but also the state inspector general are nosing around the general vicinity of the deal, which has some connected backers.

The federal probe does not directly address AEG, says the Albany Times-Union, but targets the New Direction Local Development Corp., of which state senate president Malcolm Smith and former Queens congressman Rev. Floyd Flake are founders.

Representatives of Paterson and AEG insist that there’s no connection between New Direction and AEG. But Flake has invested in something called Empowerment Development Group, which has in turn invested in AEG, and Smith, who has attempted to direct many member item funding allocations to New Direction over the years, is a former protege of Flake’s and a former business associate of one Daryl Green, an AEG partner who, it was revealed after the deal was done, had been convicted of misappropriation of government funds years ago. (Green has since left AEG.)

The Post characterizes the inspector general’s investigation as prompted by the federal government. They claim the U.S. attorney “met secretly” with the IG on the matter.

Documents related to the Aqueduct deal are supposed to be released tomorrow; the Post‘s Fred Dicker reports that AEG and the other bidders have been offered the right to redact information from the documents before they are exposed.



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