Jun 9


OTB reform bills stall in state Legislature

Measures to address abuses failed to gain passage during this year's session, which concluded Saturday

After state auditors criticized the handling of public funds and resources at Western Regional Off-Track Betting Corp., a pair of Democratic state lawmakers sponsored legislation in hopes of changing the way the public benefit corporation operates. 

The reform measures — sponsored by state Assemblywoman Monica Wallace, D-Lancaster, and state Sen. Tim Kennedy, D-Buffalo — were not approved by the state Legislature before the end of this year’s session that concluded Saturday.

Kennedy’s bills passed the Senate, but not the Assembly. Wallace’s bill never got out of committee in the Assembly.

Wallace said she plans to submit a revised version of her bill next year, saying she considers it a “priority” to address what she considers to be serious issues within the inner-workings of OTB. 

“The comptroller exposed abuses within OTB. This is a public benefit corporation and they have a responsibility to spend taxpayers money wisely and I don’t think they are doing that,” Wallace told Investigative Post on Thursday. 

In March, Wallace introduced a bill that would bar OTB officials from receiving any benefits, including health insurance, that they are not entitled to receive under state law. 

In addition, her bill sought changes in financial reporting that would require the agency and New York’s four other OTB organizations to itemize, in an annual report to the state gaming commission, the purchase and use of any promotional item valued at more than $50. 

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Despite opinions from the offices of the state Comptroller and Attorney General saying they are not entitled to the benefits, members of the OTB  board continue to receive gold-plated health, dental and vision insurance at the agency’s expense. 

The practice has continued even after attorneys from Barclay Damon, a law firm hired by OTB to review the matter, recommended that board members  no longer accept the health insurance benefits.  

A pair of state audits released in September found managers and board members improperly used tickets to luxury suites at music events and Buffalo Bills and Buffalo Sabres home games. The state comptroller’s office determined that OTB spent $121,000 on tickets to sporting events, concerts, food and alcohol for board members, employees and other individuals without proper oversight as required under state law. 

In addition, auditors flagged CEO Henry Wojtaszek for failing to properly reimburse the agency for personal use of a vehicle provided to him by OTB. In April 2019, after inquiries about the vehicle use were made by Investigative Post and the Niagara Gazette, Wojtaszek wrote a check to the agency for $3,484. 

“It’s pretty clear they weren’t keeping good records,” Wallace said. “I don’t know if that was intentional or sloppiness but either way it’s not acceptable.” 

Wallace’s bill ended the legislative session in the Assembly’s Ways and Means Committee. She said part of the reason had to do with this year’s session being jammed with bills and lengthy debates related to other topics, including gun violence and abortion. 

Wallace said she plans to introduce next year a revised version of her bill, which would require only Western Regional OTB, not all OTBs, to comply with the heightened promotional item reporting standard. 

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In January, Kennedy introduced his own reform proposals in hopes of ending what he described as “perverse dysfunction” at Western Region OTB. 

Kennedy introduced one piece of legislation calling for board members to be held to the standards of Public Officers Law, a common standard which prohibits state employees from receiving gifts valued at more than $15. 

Another Kennedy bill called for a change in the composition of OTB’s board, which has 17 members representing 15 counties in Western New York and the cities of Buffalo and Rochester. Kennedy’s bill would have reduced the number of board seats to 15 while increasing the number of Erie County representatives from one to four because of its larger population. 

A third piece of legislation sponsored by Kennedy would have prohibited OTB-owned cars or trucks from being used as take-home vehicles. 

Kennedy’s office did not respond to a request for comment from Investigative Post.

OTB had four lobbying firms under contract during the most-recent legislative session. Contracts for three of the firms — Jenkins & Associates, Mercury Public Affairs and Upstate Strategic Advisors — cost OTB $16,500 per month. Patrick Jenkins, president of Jenkins & Associates, is a longtime friend and former aide to state Assembly Speaker Carl Heastie

State records show the most-recent addition to OTB’s team of lobbyists — Bolton St. John’s — was hired in April for a lump sum payment of $10,000 under a contract that runs from April 22 through June 30. 

Records on file with the Joint Commission on Public Ethics, a state entity that oversees lobbying activities, show OTB’s lobbyists made contact with the offices of several high-ranking state officials, including Gov. Kathy Hochul, about a variety of mostly gaming-related matters, as well as the OTB reform proposals. 

Wallace said she does not believe lobbying played any role in her legislation stalling in committee, adding that she does not agree with OTB spending public money on Albany lobbyists. 

“We have like 10,000 bills introduced every session and those all have to go through a process to get to the floor and some of them get hung up,” she said. 

Last fall, coinciding with the release of the two OTB audits, an attorney from state Comptroller Thomas DiNapoli’s office asked a unit of Attorney General Letitia James’ office to take another look at the legality of OTB board members receiving health insurance coverage.  

To date, there are no indications the AG’s office has looked into the matter.

“I hope they are looking into those practices because they have much more ability to address those kinds of issues than we do,” Wallace said.  

OTB officials have repeatedly dismissed allegations of misconduct as unfounded.

Last August, OTB directors lauded Wojtaszek for his work as head of the agency. Following a review of an internal report on operations prepared by attorney Terry Connors, who was hired by OTB, Board Chairman Richard Bianchi described Wojtaszek as “exonerated on all fronts.” 

OTB has denied requests made under the state’s Freedom of Information Law for copies of the 380-page report prepared by Connors, claiming it is protected from disclosure due to “attorney-client privilege.”