FBI investigating Buffalo-area OTB

The FBI is investigating the awarding of lucrative contracts by the Western Regional Off Track Betting Corp. to politically wired companies.

The investigation, confirmed by multiple sources, is looking into contracts involving firms with ties to OTB Chairman Richard Bianchi, a member of the Monroe County Conservative Party’s executive committee, and CEO Henry Wojtaszek, former chairman of the Niagara County Republican Committee.

The full scope of the probe is unclear and an FBI spokesperson would neither confirm nor deny the investigation. But sources told Investigative Post that it includes, at a minimum, contracts the OTB has awarded to at least three firms.

Those firms include:

  • Growth Marketing Group, based in Rochester, which places advertising for Batavia Downs, a casino and racetrack the OTB owns and operates. It is headed by Arnie Rothschild, who sources said is close to Bianchi, the OTB chairman.

Rothschild is active in Republican and Conservative party circles; one source described him as a “party operative.” Since 2012, his Growth Marketing Group has been paid nearly $3.5 million by party committees and candidates for elected office in New York State. Most of the payments involved television and radio advertising he purchased on behalf of Republican candidates and party committees. Another of his firms, Normal Communications, has been paid nearly $1.3 million for similar work since 2012.

Growth Marketing is one of OTB’s largest vendors, receiving payments of $533,162 last year and $601,381 in 2017, according to OTB records.

Rothschild said he is not aware of any FBI investigation, adding: “Our reputation is as a really solid media buying and production company. Maybe it’s a sin to be a Republican.”

  • Richardson Management was paid $126,000 for lobbying and consulting work from July 2012 to July 2016. The firm was paid between $1,500 and $3,000 per month, according to its contract.

The firm is headed by Rick Winter, whose son, Elliott, serves as Niagara County’s representative on the OTB board. Richardson’s contract was terminated when Elliott Winter joined the board in 2016. Rick Winter told Investigative Post he’s not aware of an investigation by the FBI. “Our company was chosen pursuant to WROTB’s procurement policy,” he said in a statement.

  • Regency Communications was paid $73,314 between January 2014 and September 2017 for consulting services that ranged from $2,500 to $4,995 per month. The firm is headed by Glenn Aronow, a former Niagara County legislator who later served on the staff of state Sen. George Maziarz until he resigned in 2011 in the wake of allegations of sexual harassment. Aronow declined to comment.

Bianchi was chairman and Wojtaszek chief legal counsel when Richard Management and Regency Communications were hired.

Bianchi, when contracted by phone by Investigative Post, said, “Why don’t you call Batavia Downs?” before abruptly hanging up. Wojtaszek refused an interview request, but said in an email that he’s not aware of an investigation by the FBI.

A spokesperson for the OTB issued a statement several hours after this story posted.

“The FBI has not confirmed that there is an investigation of the Western Regional Off-Track Betting Corporation (WROTB) and WROTB has not received any inquiry from the FBI.

“Any inquiry or investigation would learn that our contracts are reviewed by an independent Board of Directors appointed by the County Legislatures of 15 counties and the Mayors of two cities. These contracts are audited, public documents and available for public inspection. Furthermore, WROTB has procurement policies that are strictly observed.

We are proud of our record at WROTB, as the only municipally owned and operated gaming facility in New York State. We are not just a strong economic driver for Western New York, but we provide critical funding for community development which creates jobs, protects families and helps to offset tax increases for residents.”

A fact check of the statement shows:

  • The FBI does not normally acknowledge its investigations.
  • All five regional OTBs that operate in the state are government owned.
  • Revenues that local government’s receive from the Western OTB are not earmarked for economic development.
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The OTB has a history of retaining consultants and lobbyists with political ties. Many of these contracts over the past decade call for the consultant to “provide professional guidance, strategic advice and to work and perform with the intent to help the Western OTB increase their revenues and improve their marketing strategies.”

The OTB is paying former state Assemblyman Sam Hoyt $6,500 a month through the end of June for his services. Hoyt most recently served as regional vice president of Empire State Development before a sex scandal prompted his resignation in October 2017.

Before that, Park Strategies, managed by former U.S. Sen. Alfonse D’Amato, was paid $5,000 a month. Former Erie County Executive Joel Giambra provided the OTB with most of its consulting services for Park Strategies.

Wojtaszek is a subject of a separate ongoing investigation by Monroe County District Attorney Sandra Doorley. She is looking into allegations made by Maziarz that Wojtaszek pressured Niagara County officials to award a grant-writing contract in 2014 to a firm headed by Wojtaszek’s secretary at his law practice. Wojtaszek has denied the allegation. Doorley was named special prosecutor because the Niagara County DA, who would normally conduct the investigation, is Wojtaszek’s wife.

The FBI investigation represents another legal challenge for the OTB, a state public benefit corporation based in Batavia. The OTB continues to provide its board members gold-plated health, dental and vision insurance despite declarations from the state comptroller and attorney general that board members are not entitled to the coverage. Wojtaszek continues to insist the coverage is permissible.

In addition, Maziarz has charged that OTB executives and board members are making improper use of suites the OTB has purchased for Sabres and Bills games. Wojtaszek maintains the suites are being used as intended, to entertain high rollers at the OTB’s casino at Batavia Downs. He has refused, however, to release the names of those who have been provided tickets.

The Western Regional OTB is owned by 15 counties in Western and Central New York, plus the cities of Buffalo and Rochester. It operates 15 betting parlors, 30 betting kiosks in restaurants and bars, and a hotel, harness racing track and casino at Batavia Downs.

The OTB dispenses its profits to its 17 government owners, divided up based on population. The total in 2017 was $2.9 million. Erie County received the biggest cut, $709,280; Buffalo’s share was about $281,749; Niagara County’s, $227,016.