08/21/2005 11:00PM

Request would push back report by NYRA monitor


SARATOGA SPRINGS, N.Y. - The U.S. attorney for the Eastern District of New York has asked a federal court to extend a deferred-prosecution agreement with the New York Racing Association until Sept. 13. The request, which was endorsed by NYRA's chief executive officer, Charles Hayward, in a letter dated Aug. 18, would extend the agreement three weeks beyond the original agreement, which was set to expire on Aug. 23.

NYRA has been operating under the agreement since early in 2004. Under the terms of the deal, NYRA would avoid an indictment on charges of facilitating tax fraud in its mutuel department if it paid a $3 million fine, reformed its management and operating practices, and was overseen by a federally appointed monitoring firm, Getnick and Getnick, for 18 months. Getnick and Getnick was scheduled to submit its final report to the U.S. attorney on Aug. 23.

"It has recently become apparent that the vacation schedules of the many parties working towards a final resolution, as well as other time constraints, will prevent Getnick and Getnick . . . from being able to submit its final report to the United States Attorney's Office and the Court before the August 23 date," the letter from the U.S. attorney said. The letter was signed by Daniel R. Alonso, chief of the criminal division of the U.S. attorney's office, and addressed to Judge Arthur P. Spatt of the U.S. District Court Eastern District of New York.

Three weeks ago, a partner in the monitoring firm, Neil Getnick, praised NYRA's current management during a speech at a law conference in Albany. Because of those comments, the report is expected to recommend that charges against NYRA be dropped.

Hayward said he could not comment beyond what was contained in the letter. "I can say that we agree with the request," Hayward said.

Also on Monday, NYRA released financial figures showing that the association lost $15.98 million in 2004 and $22.13 million in 2003. The figures were taken from documents submitted on Monday to the New York State Racing and Wagering Board, which has recently complained that NYRA has not complied with racing law requiring the financial statements to be on file with the board.

Total revenues - which includes all wagering revenues, including money NYRA uses to fulfill statutory obligations to purses and the state - were $287.5 million in 2004, compared with total revenues of $283.5 million in 2003.

Net revenues in 2004 were $152.9 million, compared with $151.8 million in 2003, NYRA said. Expenses were $168.9 million in 2004, compared with $173.9 million in 2003. NYRA said that expenses were reduced "due to cost-cutting measures throughout NYRA's overall operation."

NYRA had not previously released its financial results publicly, although the reports were available through the wagering board. Hayward said the release of the statements "reflect a new level of transparency." The actual documents will not be available for review until Wednesday, according to NYRA's press office.

The release from NYRA noted that the association has fully funded its horsemen's account, and on Monday, officials for NYRA and the New York Thoroughbred Horsemen's Association said that the account had been converted into a trust fund to protect the money should NYRA go bankrupt or face financial insolvency.

NYRA's treatment of the account had been a target of criticism from both regulators and the horsemen's association. Early in 2003, NYRA acknowledged that it had used funds in the accounts to pay for operating expenses, and that as a result, NYRA owed horsemen approximately $20 million. Later that year, NYRA separated the horsemen's funds from its operating budget.

Although NYRA officials had previously said that the account was fully funded, Bill Nader, a NYRA senior vice president, said that the earlier statements had been inaccurate because of "timing issues."

"We really thought it was fully funded, but now we're coming completely clean, because we just recently became aware that that wasn't the case," Nader said.

Last summer, NYRA reached a multi-year deal with Television Games Network giving TVG the exclusive in-home broadcasting rights for the NYRA signal. Money raised from the deal was used to make up most of the deficit in the horsemen's account.