Sunday, February 07, 2010

Senator Malcolm Smith’s Mentor Wins Aqueduct Racino Bid Paterson Pulls Winning Lever For Flake

The Wave, Feb. 5, 2010

By Howard Schwach

After a long and oft-convoluted process, Governor David Paterson has named a consortium that includes former Congressman Floyd Flake, called one of the most powerful political figures in Queens, to run the planned multi-million dollar gambling Racino at Aqueduct Racetrack. However, published reports in both the New York Post and New York Daily News say that Assembly Speaker Sheldon Silver may well have thrown a stumbling block in Flake’s path.

The decision, which has been in the works for several years and spans the incumbency of three governors, is designed to provide as much as $300 million in immediate funds to the cash-strapped state budget and hundreds of millions in addition in years to come.

The facility will host 4,500 video lottery terminals, restaurants, retail outlets, a 2,500-seat entertainment complex, banquet and conference halls and a racing museum.

If it ever happens.

The reports in the daily papers say that one of the conditions set by Silver for approving the deal is a requirement that no investor tied to the Aqueduct Entertainment Group, the consortium that won the bid, could have a criminal record.

Darryl Green, a minor partner in the Aqueduct Entertainment Group, has a criminal record, according to state records.

Green is a former business partner of Senate President Malcolm Smith, who represents Rockaway in the Senate, and had a lot to say about who got the Aqueduct bid.

Green was convicted in 1999 of stealing $500,000 from city agencies and private firms that paid him as a consultant for his expertise in affirmative action hiring.

Smith, who was the Senate’s Majority Leader for a short time, also has close ties to Flake.

He worked for Flake as his administrative assistant from 1987 to 1997 when Flake represented Rockaway in Congress.

Smith has often called Flake his mentor and the two remain close friends, reportedly speaking several times a day by telephone.

The decision to give the Racino to AEG was made by Governor Paterson and John Sampson, the Senate’s Majority Conference leader. Silver, the third member of the “three men in a smoke-filled room,” had to give his approval and did, with several added requirements, including one that said that all the investors had to pass a background investigation.

Assemblywoman Audrey Pheffer says that she is pleased with the decision.

“AEG is an organization that has long ties to the Queens community and has a unique and vast knowledge of the needs of our neighborhoods. The future of Aqueduct Racetrack is vital to our community. I look forward to working closely with AEG to ensure a successful project,” stated Pheffer.

AEG has widespread support from local groups including Community Board #10, the Queens Chamber of Commerce and many community and civic organizations.

“The Racino will bring welcomed economic growth to our community by providing jobs, both during the construction and also full-time permanent jobs for the operation of the facility. This project will be a strong economic engine for the local economy by providing added revenue for New York State, increased educational funding and much needed employment,” said Pheffer.

The bidding process has been widely slammed by critics who say it was always tilted by Paterson towards his friends Flake and Smith.

Paterson said, however, “AEG complied with every request made during the review process and addressed satisfactorily all matters relating to licensing ability.”

Experts say, however, that because of his criminal record, Green will have a problem getting a license from the state’s Lottery Division, which regulates gambling licenses.

ake, was a supporter of the AEG bid. But "he had no role in bringing Darman Group into AEG," said his spokesman, Austin Shafran.

Reins of power

The web of partnership and influence surrounding a shady Queens charity and a shaky bid for a lucrative gambling contract at the Aqueduct “racino.”


A consortium of companies, including The Darman Group and Empowerment Development Corp., with the winning bid to bring video slot machines to Aqueduct Racetrack.


* Temporary president of the Senate.

* Lobbied for AEG to win Aqueduct bid from Paterson.

* Worked as a congressional aide to Flake before running for senator.

* Former business partner with Greene.

* His wife, Michele, is a founding board member of New Direction LDC, the charity he set up with Meeks.


* Principal, Empowerment Development Corp.

* Pastor, Greater Allen AME Cathedral in Queens.

* Former congressman and mentor to Meeks and Smith.

* Rev. Edwin Reed, treasurer of Empowerment Ministries, Flake’s charity, is listed as the treasurer of New Direction Local Development Corp., the charity of Meeks and Smith.


* Principal, The Darman Group.

* Pleaded guilty in 1999 to defrauding city agencies; he and his companies owe $940,000 in taxes. Former business partner of Smith.

* Founder of Peninsula Preparatory Academy Charter School in Queens, for which The Darman Group was awarded the building contract. Both Smith and Meeks served on school’s board.

* Greene’s wife, Cathy, was founding board member of New Direction LDC.


* Selected AEG group Feb. 5 over four other bidders.

* Met with Flake three days later and discussed politics.


* Former protégé of Flake. Meeks succeeded Flake as representative for the 6th Congressional District in Queens in 1998.

* Partnered with Smith to raise funds for Hurricane Katrina families.

* Worked as a lawyer with Greene’s law firm, Greene & Flowers Associates.

* Member of Flake’s church.

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