02/09/2007 12:00AM

New York in turbulent state

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It takes a lot to knock a love triangle involving a homicidal, diaper-wearing astronaut off the front pages of New York's tabloids, but Gov. Eliot Spitzer managed to do it last week. By last Friday, New York Post headlines such as "Astro-nut!" and "Lust in Space" had been superceded by "Sluggo Spitzer a Raging Bull," after the newly elected governor declared war on the entire state legislature.

Entertainment value aside, this all actually has something to do with racing, because the unprecedented hostility between the governor and legislators seems certain to affect the battle for the New York Racing Association franchise.

The center of the fuss is another familiar name to followers of New York racing tussles: Alan Hevesi, the former state comptroller. The last time racetrackers were paying attention to Hevesi, he was screaming for heads to be placed on pikes at NYRA, calling press conferences to brand the racetracks a hotbed of corruption and mismanagement under previous regimes.

Then last fall, as Hevesi went through what was supposed to be the formality of reelection, his opponent uncovered the fact that Hevesi had been using state employees, at a cost of over $200,000, to chauffeur and run personal errands for Mrs. Hevesi. The comptroller first claimed these were anti-terrorism bodyguards responding to threats, and when that story didn't exactly fly, he said he just hadn't gotten around to reimbursing the state. Ticketmate Spitzer called on him to drop out of the race, but Hevesi refused and won reelection with 57 percent of the vote, but then resigned before taking the oath after pleading guilty to a felony count of defrauding the state. (On Friday, Hevesi ducked both jail time and probation when he was sentenced to pay only a $5,000 fine, repay the funds spent on his wife, and submit his DNA to a state criminal database.)

That left it to the legislature to appoint a successor, and Spitzer thought he had a deal with the Senate, led by Joe Bruno, and the Assembly, led by Sheldon Silver, to select from a small group of candidates recommended by a panel of former comptrollers. When the panel neglected to nominate any of the senators or assemblymen Bruno and Silver wanted considered, the legislators reneged on the arrangement and gave the job to one of their own, Assemblyman Thomas DiNapoli. Spitzer reacted by calling DiNapoli "thoroughly and totally unqualified for the job," criticizing the assemblymen who betrayed him, and promising to deliver "a knockout punch" to the "culture of corruption" in state politics. Political observers say there has not been a gubernatorial-legislative rift with such ferocity since the days of Teddy Roosevelt.

All of this makes the franchise issue that Spitzer inherited a little more interesting on two counts. First, the chances of an amiably brokered deal among the governor and the two houses of the legislature seems increasingly unlikely. Second, as Spitzer continues to emphasize rather than retreat from his zealous stance as a uniquely principled reformer, it will grow ever more difficult for Spitzer to accept the recommendation of the previous administration to award the franchise to a group that includes at least two close Spitzer associates and contributors.

Excelsior Racing Associates, which won the nonbinding bidding contest conducted by an advisory panel last year, is financed in part by Richard Fields, a casino developer who provided Spitzer with the use of a campaign airplane and excessive campaign contributions, some of which eventually had to be returned. Another partner in the venture is Bill Mulrow, a close friend of Spitzer's and one of the candidates the governor wanted to see get Hevesi's old job.

Spitzer has taken no formal position on who should get the franchise, but has criticized the mechanics of the advisory panel's scoring system, as has Silver, for giving fewer points to "integrity" than the size of lease payments. On the other side of the aisle, Bruno is considered to be aligned with Empire Racing Associates, but one of its former directors had to resign because of his business links to Bruno that are the focus of a federal ethics investigation.

So, as appeared likely all along, the whole process is nearly back to square one with a new governor in place. At least it finally appears that the advisory panel's report, withheld since its summary findings were announced in October, will be released next week, giving the public its first look at what the three bidders actually might plan to do. In the meantime, a bankrupt and undermanned NYRA trudges on, putting on the most cheap and dismal winter racing in its history, still waiting for a go-ahead from Albany on the racino approved by voters five years ago. Politics, as usual.