Updated on 05/14/2012 6:23PM

New York Racing Association names McClain president and hires new general counsel


The New York Racing Association board of directors on Monday appointed its chief operating officer, Ellen McClain, as president of the association, and hired Kenneth Handal, a former assistant U.S. attorney, to be general counsel.

McClain filled the position of president vacated by the departure 10 days ago of chief executive officer Charles Hayward, who was fired by the board on May 4 after the release of a state report suggesting that NYRA officials had been aware that the association had set its takeout too high for trifecta and superfecta bets for 18 months in 2010 and 2011. McClain was hired in 2009 as chief financial officer after a 20-year career in media finance and operations and was elevated to chief operating officer in late 2011. The association's chief executive officer position reamained open on Monday.

Handal, a former assistant U.S. attorney and the former president of a management consulting company, was hired as general counsel, chief ethics and compliance officer, and sectretary of the association. Handal replaces Patrick Kehoe as general counsel. Kehoe was also fired on May 4 as part of the fallout from the report.

In a statement, NYRA said that Handal is an “expert in corporate ethics, compliance, governance, and risk management.”

Since the report was released by the New York State Racing and Wagering Board on April 30, NYRA has faced reinvigorated criticism over its management practices from state regulators and politicians. Last week, NYRA’s board reportedly met with New York Gov. Andrew Cuomo, one of the association’s critics, who has said that he would seek to changes in the association.

“This is a critical period for New York racing,” McClain said in a statement announcing the hiring of Handal. “NYRA is a $2 billion racing and wagering company, and we must operate with the highest standards and practices in the areas of corporate compliance, governance, risk management, and internal controls. Ken is a crucial addition to the NYRA senior management team and has the expertise to help guide our company through the current crisis and beyond.”

Most recently, Handal was the president of governance, risk, and compliance for Guidepost Solutions, which specializes in working with companies that are facing investigations. Previously, he filled similar roles at Computer Associates (now known as CA Technologies) and Altria, and he has also been a partner in the law firm of Arnold & Porter and an Assistant U.S. Attorney for the Southern District of New York.

Handal will perform some of the same duties that are currently handled by Jonathan Sack, a partner in a New York law firm who is NYRA’s current integrity counsel. In 2011, NYRA hired Sack to replace the firm Getnick and Getnick, which NYRA had hired as its corporate monitor after it reached a deferred prosecution agreement with federal prosecutors over tax evasion charges brought against more than a dozen mutuel tellers.

Sack had earlier performed an investigation into the takeout incident, and he had concluded that there had been “no indication of intentional wrongdoing and that no NYRA executive “was trying to deceive anyone” when the association was mistakenly applying a 26 percent takeout to trifecta and superfecta bets, rather than the legal maximum of 25 percent.

On the same day that he was fired, Hayward released a statement contending that a full investigation of the takeout matter would exonerate him. An accompanying letter from Hayward’s lawyer contended that the NYRA board had been presented with evidence that “demonstrably establishes that NYRA did not deliberately apply an incorrect takeout rate.”