Jun 6


OTB tries to stifle a critic

Lawyers for the Western Regional OTB have sent a threatening letter to the author of critical pieces about the agency. The writer is having none of it.

Jim Shultz has gotten under the skin of Henry Wojtaszek, president and CEO of the Western Regional Off-Track Betting Corp.

Wojtaszek ostensibly works for a 17-member board of directors appointed by 15 counties and the cities of Buffalo and Rochester, but in reality, he has a free rein over OTB operations. And he’s apparently sicced one of his many lawyers on Shultz.

Hodgson Russ is one of four law firms OTB presently has on retainer. As we reported last week, OTB over the past year has spent $333,684 for assorted legal services, much of it dealing with investigators probing claims of malfeasance or efforts by state legislators to pass laws to reform the agency. Hodgson Russ got $55,519 of that business.

Shultz is the executive director of The Democracy Center, a nonprofit organization that supports efforts to promote social justice and a healthy planet. Through his work with the center, the UC Berkeley graduate has trained and supported activists on five continents, serving as a global advocacy advisor for UNICEF. Shultz is also an author of four books and contributing writer to the New York Review of Books

He is currently a resident of Lockport in Niagara County where he serves as a columnist for both the Lockport Union-Sun & Journal and Niagara Gazette newspapers.

Shultz has recently written a series of hard-nosed stories for the New York Review of Books and the Lockport and Niagara Falls newspapers. That prompted Aaron Saykin, an attorney for Hodgson Russ, to write Shultz on May 31.

The letter read in part:

I was disappointed by your characterization of WROTB and its officers and directors  in your April 6, 2022 article entitled “A Study in American Kleptocracy,” published in The New York Review. You also make many of the same scurrilous accusations in a prior article, entitled “Third world corruption in Western New York,” published in the Lockport Union-Sun & Journal in  September of 2021.

[Shultz also published a four-part series in the Lockport paper that began May 31.]

Your articles include several inaccurate and misleading statements, including outright falsehoods about WROTB’s leaders, accusing them of “graft” and “corruption.” You are accusing  them of crimes. This is defamation

This is lawyer talk for: stop or my client may sue you. My client, by the way, who is not shy about spending money on lawyers.

Of course, it’s very hard for a public official like Henry Wojtaszek to win a defamation lawsuit, and often dangerous for them to even try because all sorts of things could come out in discovery that they’d rather not see the light of day.

You can read Saykin’s full letter here.

Shultz responded with a letter of his own on June 2. Here it is in full:

Dear Mr. Saykin,

This email is in reply to your letter of May 31st raising objections regarding my coverage of WROTB in the New York Review and Lockport Union-Sun & Journal.  As I presume you know, prior to the publication of my NYR article I offered the leadership of WROTB an opportunity to comment on the record about the primary points made in that article, including the points you raise in your letter, and I included their responses in that piece.  Here are my responses on five key matters raised by your letter.

1. On the Legality of the Board Members’ Health Plans

You have restated that WROTB does not believe that it is bound by the legal opinion on this matter issued by the New York Attorney General in 2008.  That opinion, as you know, states that it is a violation of state law to provide health plans to OTB board members, as WROTB continues to do.  Importantly, you have now put into the public record the agency’s supposed legal basis for using taxpayer funds to offer these plans.  That is the “non-binding opinion” issued by the New York Comptroller three decades earlier, in 1978, an opinion long ago superseded by subsequent state laws and formal opinions.

The State Comptroller’s office could not be more clear on this matter.  This is what the Comptroller’s Communications Director reiterated by email (attached) when I asked about it on June 1st:

“The State Comptroller has repeatedly and unambiguously informed the OTB that the old 1978 opinion was directly repudiated by this office years ago, as part of an audit report in 2007 and again by the Attorney General’s Office in 2008 opinion.  We urge the OTB to take appropriate action to recover improperly spent monies.  To be very clear, this is an old opinion that we have told them multiple times is not relevant.” 

I can think of only two possibilities here.  One is that you and the leadership of WROTB remain somehow unaware that the agency has been “repeatedly and unambiguously informed” by the Comptroller that the opinion you cite has no current legal relevance.  The other is that the WROTB board continues to distribute millions of dollars’ worth of expensive health plans to its members with the full knowledge that it is a violation of New York law to do so.  As you know, that would be an act with serious legal implications for the board and agency.

2. On Board Members and Executive Staff Obtaining Luxury Box Seats for they and their Families

You are correct that it is not possible to put a precise number or dollar value on what portion of the luxury seats were given to board members, their families, and their friends.  This is because, as the Comptroller’s office noted in its audit, the agency failed to keep complete records regarding who made use of those luxury seats.  Nonetheless, the Comptroller was able to find the evidence of it, and wrote, “Revenues from the OTB are supposed to go to participating municipalities, not to give board members and employees generous perks and other benefits.”

3. On Mr. Henry Wojtaszek’s Personal Use of an OTB Vehicle

 You have asked that I include mention that Mr. Wojtaszek repaid the agency for this use.  In my article on this matter in tomorrow’s Union-Sun & Journal I will clarify that as follows: After auditors discovered that Mr. Wojtaszek was using an agency car for personal travel for a year and a half, he agreed to repay the OTB $3,484 in restitution.

4. On Whether I Should be Using the Word “Corruption.”

 On this you write the following: “Your articles include several inaccurate and misleading statements, including outright falsehoods about WROTB’s leaders, accusing them of “graft” and “corruption.” You are accusing them of crimes. This is defamation.” 

The Merriam-Webster dictionary defines the word ‘corruption’ in this way: “Dishonest or illegal behavior especially by powerful people.”  As you know, WROTB is currently the subject of investigation by the FBI, New York Attorney General, and New York Comptroller.  It is also the subject of two major civil suits that allege corruption at the agency.  These agencies and the courts will make the determination as to whether board members and senior staff have crossed the line into illegality, and what price they will pay for it.

But dishonesty is something that the public can judge for itself.  I and others – including investigative journalists, state auditors, and whistle blowers – have laid out a set of documented facts.  If those facts describe a long pattern of dishonest actions on the part of agency leaders, that is a product of the facts, not because I have written about them.

5. Who precisely is your client?

You begin your letter by saying that you represent WROTB.  Later you report that your client “informed” you about a matter concerning Mr. Maziarz.  Who precisely is your client?  Are you representing the agency and taxpayers who own it, with a legal responsibility to protect their financial interests?  Are you representing the board and seeking to justify its continued decision to award members expensive health plans in violation of state law?  Are you representing Mr. Henry Wojtaszek and his interests here?  There is a wide and clear conflict here between the interests of western New York taxpayers and the interests of the WROTB leadership, so who precisely are you being paid to represent?

With regard to your long series of personal attacks on those who have publicly criticized the leadership of WROTB, I noted that you left out Mr. Phil Barnes, WROTB’s board member from Schuyler County.  Mr. Barnes is a retired sheriff deputy and a Republican.  He has been in as solid and inside position as anyone to assess whether the board and executive team are operating the agency in an honest and non-corrupt manner.  That close-up view generated sufficient concern on his part that he called the FBI.

I will not be making any of the retractions you have asked for because what I have written and published is factually correct and well-documented.  I am sharing this correspondence, along with your letter to me, with a variety of people and agencies that are following this matter to make it a matter of public record.

Investigative Post, of course, has written extensively about malfeasance at OTB over the past three-and-a-half years. Our reporting spurred several investigations and audits of the agency referenced in Shultz’s letter.