06/19/2003 11:00PM

No Eliot Ness at work here

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New York - The 64-page report issued by New York Attorney General Eliot Spitzer on the New York Racing Association purports to identify serious professional and ethical lapses in NYRA's management. The document and the page one reporting of it in the The New York Times on June 14 fall far short of proving that case - but say plenty about such lapses in both Spitzer's investigation and the Times's coverage.

Spitzer is an ambitious Democratic Party politician who wants to be New York's next governor and is trying to make a name for himself as a squeaky-clean crime-buster. He spent three years of his office's time and money running several low-level sting operations at NYRA, entrapping a few mutuel clerks into changing up small bills for undercover agents posing as drug dealers. Along the way his investigators found some legitimate issues with NYRA's lax cash-management and auditing procedures in its mutuel department.

The crooked clerks were tried and convicted, with NYRA's aid and cooperation, and after some initial stalling NYRA changed its cash-control systems. That should have been the end of the story. Instead, Spitzer cobbled together these old incidents with a few salacious anecdotes to paint NYRA as a hotbed of rampant criminality allowed to flourish under neglectful and possibly corrupt management.

Some of the report's findings are so overblown and overzealous as to approach comedy. The report suggests that NYRA investigators have conducted drug seizures and failed to turn the contraband over to authorities, as if a million-dollar heroin shipment had gone missing, when the issue was actually whether they flushed a marijuana cigarette down the toilet when they caught a customer smoking pot in a bathroom.

Spitzer's costumed undercover agents apparently did such a good job impersonating free-spending drug lords that they inspired similar levels of "criminality" at NYRA tracks. One agent waving a stack of big bills was supposedly solicited by a prostitute at Saratoga, and another driving a BMW was unsuccessfully hit up for a $20 parking charge by an enterprising attendant.

The report tacks on a gratuitous suggestion that NYRA's president, Terry Meyocks, abused his expense account, focusing on a few missing receipts while deliberately mischaracterizing the sums of money and time frames in a nasty attempt to embarrass and discredit him. Meyocks's supposed transgressions are that he spent $1,000 on a retirement dinner for a veteran executive, and that he sometimes picks up restaurant checks for trainers and owners who race at NYRA tracks. This is completely standard, above-board behavior in racing or any other line of business.

Spitzer instead concludes that "crime was part of the culture at NYRA" and recommends the removal of Meyocks and the dissolution of NYRA's franchise.

The report further states that criminal behavior and mismanagement have contributed to a decline in the revenue NYRA produces for the state, an undocumented and absurd allegation. The decline in parimutuel taxes paid is solely the result of changes in legislated tax rates and the ongoing, industry-wide shift of betting handle from live to offtrack and simulcast business, factors the report neglects even to mention.

The Spitzer report is so transparently inept and reeking of partisan politics that it would have gone straight to obscurity had his office not duped the Times into making it page one news by leaking it to that paper the afternoon before its scheduled release. This cheap old trick guaranteed that the Times would overplay the story, thinking it had exclusively obtained a blockbuster secret document.

The Times played along, getting the story first rather than getting it right. It presented the report as a major expose, uncritically repeating its most dire and unsubstantiated allegations and spinning an atmospheric tale of criminality at NYRA that failed to include any political context and perspective. There were no comments from any current or former NYRA employees or racing insiders, who might have enlightened the reporter that ambitious Democrats have been calling for the dismantling of the Republican-friendly NYRA for decades.

NYRA is by definition an eccentric operation with an unusual corporate culture and structure, and it certainly has room for improvement. Its mandate to turn over its profits to the state, its dysfunctional relationship with its biggest retailers (the OTB's), and its bloated board of largely ineffectual directors are all impediments to innovation. In comparison with other tracks, NYRA's tracks offer minimal consumer comforts and few rewards for customers.

Given the vast sums of public money it handles and the importance of protecting the integrity of a multibillion-dollar industry, NYRA must be responsive rather than reflexively defensive about having its operations regularly scrutinized by fair-minded regulators acting in the public interest. The attorney general's report, however, was neither fair nor in anyone's interest but Spitzer's.

Steven Crist was employed by The New York Times from 1978 to 1990 and by The New York Racing Association from 1994 to 1997.