06/19/2003 11:00PM

Spitzer, NYRA board deeply at odds


NEW YORK - One week after New York Attorney General Eliot Spitzer released a highly critical report about the New York Racing Association, Spitzer and NYRA's board members agree on only one thing: They completely disagree.

Spitzer says that Terry Meyocks, NYRA's president since 1996, should be fired. Board members say that Meyocks should stay. Spitzer says that NYRA's controls over cash handled by mutuel workers are "inadequate" despite recent changes. Board members defend the changes for addressing the problems. Spitzer says that his only intention in releasing the report was in the interests of "law enforcement." Board members say that the report is a spurious and inaccurate document designed to strengthen Spitzer's image as a reformer as he begins to seek higher political office.

The controversy does not seem to be abating. On Wednesday, Spitzer sent a letter to all 212 members of the New York State Legislature, urging them to take action to remove Meyocks, implement stringent controls over how NYRA conducts its business, and reconsider NYRA's franchise on racing at Aqueduct, Belmont, and Saratoga.

"I believe that the state legislature and [governor] should act to promote sweeping changes in the operation and management of NYRA," Spitzer wrote. He added that he believed NYRA management "cannot be relied upon to undertake necessary changes to protect track patrons and the state."

Spitzer's report, which was made public in a front-page article in The New York Times on June 14, was the culmination of a three-year investigation into NYRA's business practices by the attorney general's office. The report concentrated on NYRA's mutuel department, which has been targeted by Spitzer. A total of 19 mutuel tellers have been convicted since 2000 on charges of money laundering or tax evasion. In the week before the report was released, two other tellers were indicted on charges of forgery.

The report was highly critical of Meyocks for allegedly turning a blind eye to problems in the mutuel department and inadequately accounting for his own business expenses. Spitzer concluded in the report that Meyocks should be fired for allowing criminal behavior under his watch. Meyocks was not personally accused of any crimes, but the report asserts that he spent company money for entertainment "in ways that appear injudicious."

Spitzer, a Democrat, is considering a run for governor of New York in 2006. His aggressive pursuit of reforms on Wall Street in the past two years has significantly raised his profile. Most of NYRA's board members and its top officials have supported Republican candidates, and some of the association's strongest supporters in the legislature, including Senate Majority Leader Joseph Bruno, are Republicans.

Many NYRA board members criticized Spitzer this week for using the report to enhance his political standing. The board members said that the report made no specific recommendations on how NYRA could improve its procedures and that it merely rehashed the results of investigations that had already been completed.

"Racing is pretty easy prey for the politicians," said Stuart Subotnick, a board member. "This is an organization that has been a political football in the past. So I'm left wondering, if there were no new crimes to detail, what was the purpose of even issuing this report?"

Spitzer said that the report was not politically motivated and that NYRA's board members were hiding behind that accusation to refrain from acknowledging the shortcomings outlined in the report.

"This had absolutely nothing to do with anything but proper law enforcement," Spitzer said Tuesday. "And it's that type of response that troubles me. All we've heard from NYRA through the entire investigation is that we just don't understand racing."

Spitzer declined to be specific about the exact changes NYRA needed to make to comply with the report's recommendations, other than replacing Meyocks and putting in place what Spitzer called proper cash-control procedures. Board members have pointed to the lack of such specifics as evidence that Spitzer's office used the various crimes committed by mutuel tellers to smear NYRA's management.

Stuart Janney, a board member, said that a section of the report in which tellers describe in interviews various schemes to cheat customers was especially indicative of Spitzer's intent to portray NYRA negatively.

"I found it quite extraordinary that nowhere in the report did I see complaints where violations did occur," Janney said. "The entire section described, basically, what might have happened, or what could happen."

Other board members said that NYRA had changed many of the cash-handling procedures for tellers in October 2002, more than eight months before the report was released, making Spitzer's charges obsolete. The report briefly mentions those changes, but it calls them inadequate compared with the cash procedures used by Atlantic City casinos and other businesses.

"I don't really know what we need to do, because I think we've already dealt with these issues," said Peter Karches, a vice chairman of NYRA's board. "If people want to hand us a checklist and say this is what needs to be done, I think we can go down it and give them chapter and verse about what has been done to fix it."

The report's criticism of Meyocks also was singled out by NYRA's directors. In interviews since the report's release, not one board member has spoken of wanting to remove Meyocks. Under NYRA's bylaws, the board can remove any officer by a majority vote of the 26 directors.

"The attack on Terry Meyocks, the expense-account attack on him, is ludicrous," said Stephen Duncker, a board member and horse owner. "Anyone that knows Terry knows that he's as straight and narrow as they get."

While the opinions of NYRA board members appear to be set, the political situation in Albany is more fluid. Still, very little can be done this year. The Legislature adjourned on Thursday without enacting any new measures that would affect NYRA in light of the attorney general's report, and the Legislature is unlikely to consider any such bills if it has to return in the fall to clean up the budget, according to a legislative aide with close ties to the racing industry.

The aide said that state legislators so far have not had detailed or serious discussions about revoking NYRA's franchise. But Spitzer's letter would certainly provide ammunition over the summer for any legislators who have an ax to grind with NYRA, the aide said.

The summer break for the Legislature will also give NYRA an opportunity to line up its supporters over the next three months, perhaps at a time when criticism generated from the report abates. In the meantime, some directors said that NYRA would likely take a look at some of the association's practices, but not simply because of Spitzer's report.

"Let's face it: Things were not done the right way in racing for forever," said Karches. "We're still working on it."