08/03/2005 11:00PM

NYRA oversight board gets its first appointee


Joseph Bruno, the New York Senate majority leader, announced on Thursday the first appointment to a new five-member board that will monitor the New York Racing Association.

Bruno, who made the announcement at Saratoga Race Course, appointed Joseph Torani, a top official of a Saratoga Springs financial investment firm. The board was set up in legislation that was passed earlier this year and signed Wednesday by Gov. George Pataki. The board is expected to fill, in part, the role played by a federal monitor, the New York law firm of Getnick and Getnick, which worked with NYRA over the past 18 months.

Torani, an accountant, is the managing partner of BST Advisory Network, a partnership of seven financial and consulting companies. He will be the sole board member appointed by Bruno, a Republican who is prominent in the legislature on racing issues. Three appointments will be made by Pataki, also a Republican, and another is reserved for Rep. Sheldon Silver, a Democrat who leads the state Assembly.

Under the legislation, the board will have the power to review nearly any aspect of NYRA's business and recommend how the association should operate, including approving expenses or budgets. NYRA operates Aqueduct, Belmont, and Saratoga under a legislative franchise that expires in 2007, and the association is scheduled to open a slot-machine casino at Aqueduct next year. If NYRA were to lose the franchise before 2007, the board would take over operation of the casino.

Charles Hayward, the chief executive of NYRA, said Thursday that it "is difficult to have an opinion" about how the new oversight board will operate, given its broad powers and the fact that only one appointment has been made.

"In a perfect world, this will be a good thing for New York and a good thing for racing, if the legislature is interested in learning more about racing in the state," Hayward said. "It can be a net positive for the state in terms of how we run our business, and until we see otherwise, we just have to take it at face value."

Late in 2003, NYRA reached a deferred-prosecution agreement with the U.S. attorney for the Eastern District of New York on charges related to tax fraud in its mutuel department. The agreement required NYRA to run its business under the scrutiny of the federal monitor until late July this year and to undergo a management overhaul.

The federal monitor, Getnick and Getnick, has completed its work and will file a report with the U.S. attorney by Aug. 23. On Tuesday, Neil Getnick, the official in charge of the federal monitorship, praised NYRA and said that the association had "said yes" to a variety of reforms designed to safeguard the integrity of the racing product and its financial practices. Getnick's comments virtually ensure that the monitor will recommend to federal prosecutors that the charges against NYRA be dropped.

All appointees to the new oversight board will serve four-year terms and will not be compensated, except for expenses related to the board's business, according to the legislation. The board will remain in place unless or until NYRA is replaced, at which time the board would be disbanded within 30 days of a successor taking over.

The expiration provision and the ability of the board to take over NYRA's slot machines are raising questions about whether the board will perform in a strictly regulatory function or become a political vehicle to attack or shield NYRA during the fight to win a renewal of the franchise. That battle is expected to be hard-fought, and it will involve open bidding against a variety of well-connected racing and gambling companies. Pataki is expected to appoint a separate panel by December of this year to determine the parameters for the bidding process, including any changes to racing law and regulation.

Sisa Moio, a spokeswoman for Silver, said that Silver "has not yet finalized" his appointment to the board and that no timetable has been set. Pataki's office did not return a phone call for comment.

It is unclear how the new oversight board will work with the existing New York State Racing and Wagering Board, which has many of the same powers. Michael Hoblock, the chairman of the racing and wagering board, declined to comment on Thursday, but in a statement released on Wednesday said: "This new oversight board will play a critical role in helping to bring about lasting reforms that ultimately improve the quality of New York's racing product while at the same time foster in a new era of accountability and integrity into the sport."