Empire on Empire: A Compendium of Quotes on Empire Racing

Transcription

1 Empire on Empire: A Compendium of Quotes on Empire Racing 1. Empire executives say that the inspector general's report was unfair because some of its findings were based on interviews with Mr. Getnick and other people with connections to competing bidders for the franchise. Mr. Smith was never interviewed by investigators preparing the report. 'Knowing now that Getnick is on N.Y.R.A.'s payroll, and knowing that that was in the works for some time -- to my mind, it's very much like a mobster putting a federal judge on the payroll after he acquits them,' said Jeffrey Perlee, Empire's president. 'Getnick has a tremendous incentive to make sure that N.Y.R.A. gets another 30 years of life. '' Ex-Monitor of Horse Racing Interviewed in Bruno Inquiry, New York Times, September 30, Others, including a NYRA competitor, said they were led to believe the state wanted a 20-year lease instead of the potentially more lucrative 30-year deal Spitzer worked out with NYRA. "We didn't get that opportunity," said Jeff Perlee, president of Empire Racing Associates, one of NYRA's main competitors, along with Capital Play and Excelsior Racing Associates, for track rights. Spitzer spokesman Paul Larrabee disagreed. "They were asked to make the best proposal they could," Larrabee said of the competitors. Spitzer aides queried on NYRA Times Union, September 28, The chief of one of Excelsior Racing s competitors, Jeff Perlee of Empire Racing Associates, later dismissed the claims as a smokescreen, saying he was convinced Excelsior Racing s gambling and real estate partners are still working behind the scenes for a role at Aqueduct and Belmont. Spitzer Aides: NYRA Right Choice for Franchise, Blood-Horse September 27, When Spitzer took office on Jan. 1, there was no part of New York State government that needed change more desperately than NYRA and racing. Not only were they indicted, but then they went bankrupt, said Jeffrey Perlee, chief executive of Empire Racing, one of whose partners - Churchill Downs - runs the Kentucky Derby. Perlee said his company would take the job without seeking a taxpayer subsidy, which NYRA would require to cover debts and operating deficits. 1

2 Losing bidders slam state's pick, Newsday, September 19, Empire Racing suspects Ms. Hamann's report was rigged. While preparing the review, Ms. Hamann's office consulted with Neil Getnick, who helped NYRA avoid federal indictment as a court-appointed independent monitor. She treated him as a neutral observer. Yet the evidence suggests that the primary goal of Mr. Getnick, who failed to disclose to the public that NYRA trustees may have knowingly and illegally siphoned away horsemen's funds for more than a decade, has always been to promote NYRA's "transformation," rather than to offer a fair assessment of the association. Spitzer Plays the Ponies, New York Sun, September 18, Yet that same firm, Empire Racing Associates, is also threatening to sue over the state's review of its proposal, claiming the process was flawed and alleging conflicts of interest that helped NYRA win the governor's support. "We're interviewing counsel and exploring avenues to take," said Empire spokesman David Vermillion. Among its complaints, Empire claims an official who reviewed Empire's bid for the Inspector General's office had worked for the Manhattan law firm Getnick & Getnick. The firm has close ties to NYRA, serving as its court-appointed monitor when NYRA was under federal investigation for corruption a few years ago. Bids on Racetracks Scrutinized, Gannett News Service, September 17, Jeff Perlee, president of Empire Racing Associates, said his group is considering suing because it is dissatisfied with the work of Thacher Associates. Boxer said a second report by Thacher about Empire replaced the report Empire complained about. Spitzer horse-track plan criticized, Times Union, September 13, Meanwhile, Empire - which includes the out-of-state racetrack operators Churchill Downs Inc. and Magna Entertainment - is threatening to sue over a report, issued in July by state Inspector General Kristine Hamann, concerning the integrity of the bidders, compiled as part of the franchise-selection process. Empire, which paid more than $1 million in fees for the report, claims that Thacher Associates, a consulting firm retained by the IG's office to evaluate the integrity of the bidders, submitted a report containing factual errors. Furthermore, Empire charges that Thacher's report was biased because one of its employees once worked for Getnick & Getnick, the law firm that served as the federal 2

3 monitor during NYRA's deferred prosecution two years ago. The new NYRA plans to hire Getnick & Getnick as its own integrity monitor for a reported $125,000 a month. Track's Muddy for 'New' NYRA Plan, New York Post September 13, But Empire executives said that the firm chosen to review their bid, Thacher Associates, included on its staff a former employee of a law firm linked to a competitor for the franchise. The competitor is the New York Racing Association, which currently holds the franchise. Last month, Gov. Eliot Spitzer recommended that it keep the franchise, which expires later this year, even though it has faced bankruptcy and scandal in recent years. Mr. Spitzer's choice sparked controversy among lawmakers in Albany and lobbying by Empire and other bidders, who hoped to persuade the Legislature to reject Mr. Spitzer's recommendation. Now Empire is considering suing Thacher to recover the roughly $1.1 million in fees the company paid the consultant to conduct its review. 'Thacher has a contractual duty to us to have disclosed this conflict, and they did not,' Jeffrey S. Perlee, the chief executive officer of Empire Racing, said Tuesday. 'We paid Thacher for work that turned out to be filled with errors and omissions.' Thacher's report on Empire cited murky ownership and links to the unsavory underbelly of the racing world. In a letter sent to Ms. Hamann after the integrity report was released in July, Mr. Perlee cited what he said were more than a dozen factual errors. He also disputed the inclusion of a verbatim ' special report' from Thacher investigators on the origins of Empire, a report that Mr. Perlee said was based on information supplied largely by people working with other bidders. ' Only in the section on Empire were readers treated to unchecked facts, competitors' gossip and opinions passing as definitive information and editorial conclusions that are properly the province of the governor and legislative leaders, he wrote. According to Mr. Perlee, Mr. Thacher called him later that month to say that he agreed with his concerns. In an interview, Mr. Thacher did not dispute that he had spoken with Mr. Perlee but said, 'At this time, it is not appropriate for me to comment on the contents of the inspector general's report.' Racing Group Says Review of Track Bid Was Tainted, New York Times, September 12, A losing racing bidder, Empire Racing, said the governor seemed to keep the status quo in racing while he seemingly punted on gaming. Empire called on the legislature "to forge a true solution that will benefit New Yorkers." 3

4 Future of NYS Tracks: The Next Big Bet, Newsday, September 5, Empire spokesman David Vermillion said Spitzer rejected substantial upfront payments from bidders, such as Empire's proposed $200 million. He also questioned NYRA's and Spitzer's secret dealings. A transparent process? When were the negotiations? he said. Spitzer places bet on NYRA, Times Union, September 5, Officials at Empire Racing said Spitzer's recommendation to retain the failed status quo is bad for horse racing and bad for New York taxpayers. The group said separating racing -- the costliest business -- and video slots -- the most lucrative -- doesn't work. Gov. Spitzer Recommends Tracks' Management Hold On To Franchise, AP September 5, Criticism of the deal also came from Empire Racing Associates, one of the companies that has been seeking the franchise. In a statement, Jeff Perlee, the chief executive of Empire Racing Associates, called Spitzer's decision to split the racing and casino components of the franchise a losing bet and urged the state legislature to reject the recommendation. Daily Racing Form, September 4, Empire Racing had been repeatedly assured that the involvement of key figures from NYRA, including trustee Charles Wait and Ed Lewi, created a conflict of interest that would preclude the group from endorsing a specific bidder, the statement read. In fact, the group denied our request for a meeting to discuss Empire s plans for economic development in the Saratoga region because, they said, they did not want to appear to be favoring a particular bidder. We believed this. Today it looks like everyone was duped. A few weeks of taxpayer-funded success in Saratoga can t make up for decades of financial mismanagement, bankruptcy, and failure at the top. Concerned Citizens for Saratoga Racing Support NYRA, Blood-Horse, August 23, Empire CEO Jeff Perlee criticized connections between NYRA and some citizens' group members. Empire Racing had been repeatedly assured that the involvement of key figures from NYRA, including trustee Charles Wait and Ed Lewi, created a conflict of interest that would preclude the group from endorsing a specific bidder," he said. "In fact, the group 4

5 denied our request for a meeting to discuss Empire's plans for economic development in the Saratoga region because, they said, they did not want to appear to be favoring a particular bidder. We believed this. Today it looks like everyone was duped. A few weeks of taxpayer-funded success in Saratoga can't make up for decades of financial mismanagement, bankruptcy and failure at the top. " NYRA gets local nod, Saratogian August 23, Empire Racing's submission offers to join forces with its three competitors under a board that would include government, racing and off-track betting representatives. A 'winner-take-all' mentality will not work in Albany and it will not revive racing, said Jeff Perlee, chief executive of Empire Racing. Racetrack proposals accepted, Newsday August 9, Jeff Perlee, CEO of Empire, explained Empire's shift of direction as a way to honor priorities of legislative leaders. Senate Majority Leader Joseph L. Bruno has specifically said he'd like to see the best of all bidding proposals combined somehow. We've all been engaged in a contest, Perlee said. A winner-takes-all doesn't work in Albany. Saratoga untouched by track talk, Times Union, August 8, Empire Racing has identified a path forward that can benefit all parties involved, and we look forward to presenting that plan to the state, said David Vermillion, a spokesman. A person familiar with Empire's pitch said the group is suggesting the state mix and match from among the bidding teams to find the best components of each to run things. Down to wire for franchise-seekers, Times Union, August 7, Jeff Perlee, the chief executive of one of the bidding groups, Empire Racing Associates, said the group would submit a revised plan to reflect the priorities of the decision-makers in Albany, a reference to the fact that both Spitzer and the legislature have to approve the awarding of the franchise. Perlee declined to provide details about the revised plan. Later in the day, Empire Racing issued a release that said it had modified its for-profit proposal to advocate for the creation of a not-for-profit racing authority that would run 5

6 the racing side of the operation. Empire Racing - which lost the endorsement of the New York Thoroughbred Horsemen's Association last month and had earlier called for a forprofit model - said that the new racing entity would contract out the day-to-day management of the racetracks and casino operations to a "qualified, business-oriented operator." Daily Racing Form August 7, It seemed like a direct slap at Empire, which last month somewhat desperately called for NYRA and Excelsior to be disqualified from the bidding process for allegedly having had secret meetings (which both groups deny) to discuss precisely such an arrangement. So given that Capital Play already has its casino partner in Mohegan Sun, and that NYRA and Excelsior would sooner drink hemlock than work with Empire, a cold NYRA-Excelsior quinella might still be an overlay if you can get $3.60 Daily Racing Form Steven Crist July 20, It's pretty clear they had different standards, Perlee said. It just seems like different practices were used. That's a pretty significant procedural issue that has to be taken into account. The misstatements and mistakes of fact have got to be reconsidered. We're in the process of putting together a list to correct the record. Perlee said Empire plans to submit its concerns to state officials today. The main review covered thousands of pages of regulatory records, legal action and newspaper reports including background checks of principals in the four competing firms, and did not find sufficient cause for any bidder to be dropped from the franchise selection process. Also on Tuesday, Perlee wrote to Spitzer's special counsel Richard Rifkin, who's chairing a committee charged with recommending the next racetrack operator to the governor. Much of the information on our company was provided by, and attributed to individuals who are associated with competing bidders, Perlee wrote. "There were a number of factual errors in the Thacher submission which, left unaddressed, could paint an inaccurate picture for decision makers going forward. " Empire: Report findings flawed, Saratogian, July 6, On Tuesday, Empire CEO Jeff Perlee wrote to Spitzer's special counsel, Richard Rifkin, who's chairing a committee charged with recommending a preferred franchisee to the governor. NYTHA couldn't deal with the governor's office directly under state procurement rules while it had an interest in Empire, he said. Like everyone else, Empire and NYTHA expected the franchise question to be settled by now. Perlee said NYTHA has other issues, apart from the franchise, requiring it to deal with the governor's office. To do so, it had to relinquish its relationship with Empire, he said. 6

7 Horsemen, Empire Racing sever ties, Saratogian, July 4, An Empire spokesman, David Vermillion, disputed the report's conclusion, and said that the report contained factual errors and other misleading information. Asked to identify the errors, Vermillion said the report erroneously identified two officials as having positions at the company. He also said Empire was in discussions with Spitzer to correct the record. " Daily Racing Form, July 3, Officials of Empire had previously declined to comment on the June 8 meeting. Perlee sent the letter to Richard Rifkin, Spitzer's chief counsel and the head of a panel that held hearings on the NYRA franchise earlier this year, to correct several published reports that suggested Empire was not willing to partner with NYRA. We specifically stated that if this new framework were adopted that we would remain interested and would continue to seek the revised franchise, Perlee said. Daily Racing Form, June 18, Officials with Empire Racing Associates, a group of gaming and horse-racing interests based in Saratoga Springs, and Capital Play LLC, an Australian consortium, were stunned at the potential outcome of their months of work and millions of dollars in costs in attempts to win the franchise. The two firms, while continuing to bad-mouth NYRA for weak attendance, declining revenues and criminal indictments, say they would indeed be willing to partner with the association. NYRA, Spitzer at work on deal, Times Union, June 16, " The VLT program was approved in the first place to benefit the entire new York thoroughbred community, said Dennis Brida, a longtime horseman and Executive Vice President of Empire Racing, one of the four groups bidding on the New York Racing Association franchise that expires at the end of the year. Separating VLTs and auctioning it off to a gaming operator with no background or connection to the New York thoroughbred community is a repeat of past mistakes, and it is wrong for the growth and future of the industry. Brida compared the separation to the failed OTB model started in 1971, which now sees OTB and NYRA competing for the same wagering dollar. The Day At The Races, Daily News, June 15,

8 26. " We can't allow these VLTs to be put in the hands of some out-of-state casino interest, Empire Vice President Dennis Brida said at a Congress Park press conference. Separating it out and auctioning it off to a gaming operator... is not only unfair, it's wrong. Empire striking back: Racing firm warns over repeating past mistakes, Saratogian, June 15, Excelsior's strong standing has provoked outcry from one of its competitors, Empire Racing Associates, which is alleging that the for-profit venture colluded with the New York Racing Association to split up operations in an arrangement that would give the association control over racing and one of the bidders control over gaming. NYRA, a nonprofit entity, has held the franchise to operate Saratoga Race Course, Belmont Park, and Aqueduct since 1955, losing millions of dollars and facing charges of financial mismanagement. The franchise is set to expire on December 31. A spokeswoman for Excelsior, Katie Burke, denied the charges, saying, The allegations of collusion are unequivocally and patently false. The meetings with NYRA never transpired nor did the conversations they allege. Empire is denying that it is not interested in a partnership with the association. We are interested in any scenario that protects the interest of New York's horsemen, said David Vermillion, a spokesman for Empire, which is backed by major players in the national horse racing industry. Big Spitzer Donor in Line for Lucrative State Deal, New York Sun, June 15, Empire Racing, one of the four bidders hoping to get the nod to run racing in New York starting next year, sent a letter to State Comptroller Thomas DiNapoli and Richard Rifkin, special counsel to Gov. Spitzer, on Wednesday claiming that the New York Racing Association and Excelsior Racing were violating state procurement rules designed to prevent collusion. The letter, written by Jeff Perlee, CEO of Empire Racing, said NYRA and Excelsior have had meetings that discussed splitting up operations and components of the franchise and dividing them among themselves. Excelsior would control the video lottery terminals, while NYRA would control the racing, the letter said. Empire countered Hayward's statement with its own: Trust is paramount in a public franchise. Credibility, with the public, the state's horsemen and with our state leaders has, unfortunately, not been a hallmark of the present racing operator. We stand by the credibility and the authority of the information... " The Day at the Races, Daily News June 2,

9 29. He said, she said: Thursday, Jeff Perlee of Empire Racing, one of four bidders looking to take over New York's racing franchise when NYRA's license expires Dec. 31, sent letter to state comptroller Thomas DiNapoli and Richard Rifkin, special counsel to Gov. Spitzer, claiming to have evidence that two other bidders, NYRA and Excelsior, are colluding to carve up franchise, in violation of state rules. Franchise Firms Go Back And Forth, New York Post, June 2, Rival Empire Racing Associates has called on the state to investigate NYRA and Excelsior, saying they violated state procurement policies by allegedly discussing plans to split up the state's racing franchise. According to Empire, NYRA and Excelsior have reached a deal that would see Excelsior control gaming operations at Aqueduct and possibly Belmont, while NYRA or its successor would continue to run racing. Empire CEO Jeff Perlee sent a letter on Wednesday to state Comptroller Thomas DiNapoli and Gov. Eliot Spitzer's special counsel, Richard Rifkin, asking them to investigate the matter. NYRA refutes Empire claim, Saratogian, June 2, Jeff Perlee, chief executive officer of Empire Racing, has accused the New York Racing Association and Excelsior Racing of collusion in their bid for the right to run New York s racing franchise. In a letter sent to New York Comptroller Thomas DiNapoli and special counsel to the governor Richard Rifkin on Wednesday, Perlee said NYRA President Charles Hayward and Excelsior s Richard Fields met in recent weeks to discuss dividing up operations and components of the franchise. Perlee said such a meeting would violate state procurement rules and has requested an investigation. The bidding process has ended and the parties are awaiting a decision from New York Governor Eliot Spitzer. Perlee claims the secret meeting produced a plan under which NYRA would run the racing side while Excelsior would handle gaming. Perlee said the two companies have formed a plan to divide video lottery terminal revenue between them. Empire accuses NYRA, Excelsior of collusion, Thoroughbred Times June 1, Empire called on the state officials to investigate the allegations. Empire said the meetings included Charles Hayward, the NYRA president, and Richard Fields, a casino developer who is a partner with Excelsior. Empire said the division of the 9

10 franchise would occur presumably after Excelsior was awarded the franchise and NYRA would then reassert its control of racing through a plan of reorganization filed with the federal judge overseeing its Chapter 11 bankruptcy proceeding. The information relayed was so specific as to include an actual breakdown of how the two bidders would plan to distribute VLT percentages between themselves, Jeff Perlee, Empire s CEO, said in the letter to state officials. Empire Group Alleges Collusion in N.Y. Bid Process, Blood-Horse, May 31, Perlee said that the racing industry is thriving in the rest of the country, but floundering in New York. We've been downtrodden for so long we've almost forgot who we are, he said. Groups Make Pitches to Run NY Tracks, Gannett News Service, April 11, If you have casino operators running racing... racing will be the stepchild, Jeff Perlee, Empire's executive director, told the panel. Empire, a coalition of North America's biggest track operators and racing interests, faces stiff competition from Excelsior, led by Richard Fields, the developer of the Seminole Hard Rock Casino, and Steve Wynn, creator of a string of casinos in Las Vegas and elsewhere. Perlee, and colleagues such as Marc Holiday, president of SL Green Realty Corp., and Empire Chairman Jeffrey Tucker, a investment manager who founded Fairfield Greenwich Group, portrayed their coalition as committed to furthering horse racing. Empire outlined plans to improve the state's economy with things such as a huge new Empire Equine Economic Zone that would use state tax breaks and other incentives to encourage development of horse businesses from Schenectady County to Onondaga County. The group's bid was similar to its proposal last year, which came in second in a review by a different state panel. That panel, created under former Gov. George Pataki, recommended Excelsior's bid. Racing bidders jockey for deal, Times Union, April 11, '' We sent a notice to everyone on our team telling them to back off -- the process is clear, and we're going to respect that, ' said Jeff Perlee, the chief executive of Empire Racing. ' For our team, our experience speaks loudest. So we're happy to let our experience and our plan do the talking. '' Vying to Run State's Tracks, Racing Interests Woo Politicians, New York Times. March 26,

11 36. We're happy to hear it. Last I looked, this is about horse racing, he said. When you've got baseball teams, casino operators and club promoters in the mix, Empire Racing's horsemen and our horse racing experience really stand out from the pack. Casino mogul ups the ante in racing contest, Times Union, March 9, A letter to the executive director of the Ad Hoc Committee on the Future of Racing on Thursday, Empire Racing Associates asked whether Excelsior disclosed that its team included lobbyist William Powers, former top Assembly lawyer Michael Boxley, racing consultant Richard Powell and veterinarian Jerry Bilinski. Bilinski was a racing consultant to Senate Majority Leader Joseph Bruno, R-Brunswick, through June, the letter notes. Excelsior's Web site lists Bilinski as a member. Such disclosures were required in the bid document, wrote Empire Vice President Justin McDonald. He also questioned why no lobbyists for Excelsior or principal Richard Fields are registered with the Temporary State Commission on Lobbying. Failure to disclose bidding team members or to report any lobbying to the lobbying commission would be a ground for disqualification, said Jeff Perlee, chief executive of Empire, a Saratoga Springs-based group that came in second among three bidders for the right to run races at Aqueduct, Belmont and Saratoga. The New York Racing Association, the current franchise holder, came in third. Rival challenges winning track bid, Times Union, December 9, Jeff Perlee, called Excelsior unqualified and a dog-track operator. Daily Racing Form, November 24, " Empire Racing is confident that when the ultimate decision is made this franchise will be awarded to the only qualified group in the process, the statement said. This is the group that has expertise running some of the world's greatest tracks; represents 6,000 New York horsemen and breeders; and knows how to create jobs, economic development and a great fan experience through racing & and that's Empire Racing. " Churchill's N.Y. racing bid stalls in first round, Courier-Journal, November 22, " Will Sen. Bruno be willing to turn Saratoga over to a dog track operator? Perlee said. "Going forward, when the real decision is going to be made, we feel pretty good. " Racetrack underdog gains edge on rivals, Times Union, November 22,

12 41. Empire CEO Jeff Perlee said, 'We're at the quarter pole. The results show we're neck and neck. Now the decision goes on to the decision makers. From our point of view the question is, what does Governor-elect Spitzer do? He's gone on the record saying three things matter in this: integrity, racing experience and economic development. 'We handily won integrity, racing experience and there was no mention here of economic development, which is a major component of our plan. Also, Senator Bruno becomes very important here, particularly when you look at operational experience. Will Senator Bruno be a party to turning Saratoga over to a dog track operator?' Excelsior in lead to run N.Y. tracks, Saratogian, November 22, But Jeff Perlee, the chief executive of Empire, said, 'This is a horse race, and we're neck and neck.' He added: The more cynical types will say it really hasn't even started. What really matters is what happens when the Legislature reconvenes.' Mr. Perlee and other members of Empire Racing have said that Excelsior lacks experience in running thoroughbred tracks and is more interested in running video lottery terminals as part of the deal. Excelsior says it is offering more money to upgrade the tracks and providing a more generous deal over all. Group with Yankees Partner Has Top Horse Racing Bid, New York Times, November 22, ' The worst thing the state can do now is overreact and potentially auction off racing assets to casino interests,' said Jeff Perlee, CEO of Empire Racing, referring to his competitor. 'Empire Racing is committed to doing whatever it can to assist the state in protecting the horse racing community and this important industry.' NYRA files for bankruptcy protection, AP November 3, The battle for control of the New York Racing Association franchise, which expires Dec. 31, 2007, continued yesterday when Jeff Perlee, the CEO of Empire Racing, one of the three other entities bidding on the franchise, took another punch at the NYRA, sending a letter to Carole Stone, Chairwoman of the Non-Profit Racing Association Oversight Board. In the letter, Perlee urged the board to advance the public funds to the NYRA, to keep it from declaring bankruptcy but also called on both State Comptroller Alan Hevesi and Attorney General Eliot Spitzer to review and compare the NYRA's agreement with MGM Mirage to operate the 4,500 Video Lottery Terminal Racino at Aqueduct, further delaying the project. 12

13 The Day at the Races, Daily News, September 21, Perlee, former head of the Lottery, told Stone we do not believe that the release of these funds should be conditional on the approval of an agreement between NYRA and the casino operator MGM, adding significant questions have been raised about this unreleased agreement. Empire s Chief: NYRA Needs Help, New York Post, September 21, Empire Racing Associates says an attendance drop proves that a new track operator is needed, while New York Racing Association says the 2006 meet outperformed every track in North America. Handle's great, but handle doesn't shop on Broadway,' Empire CEO Jeff Perlee said. 'It's attendance that matters. Saratoga has too much at stake to be engaged in wishful thinking.' Empire, NYRA square off, Saratogian, September 8, Finley, president of West Point Thoroughbreds, near Cherry Hill, N.J., added that even if Empire loses the bid, the key is to find a better way to operate the tracks. If there's a better plan out there, a better way to skin the cat, then we want to go with that, he said. 4 groups vie for racing, Times Union, August 30, 'We started with the horsemen, basically crafting the entire bid. Onto that sort of architecture, we then added the operational expertise of what amounted to America's top racetracks, plus New York City's largest real estate firm (S.L. Green), and technical components from Scientific Games, the world's leader in gaming technology. We expanded on the fundamental core architecture of the horsemen's bid with all this expertise. Empire Racing engaged the New York horsemen front and center in offering a solution,' Perlee said. 'Some so-called experts felt that that was fanciful or naïve, that individual horsemen or trainers wouldn't have the wherewithal and organizational ability to participate in this process. When we first started this process you used to hear the term, 'naïve horsemen.' You don't hear that any more. 'That's probably the most significant aspect of this, that New York horsemen have put themselves front and center.' 13

14 'By virtue of New York horsemen becoming engaged, creating Empire Racing and executing the Empire Racing plan, you now have a situation where two companies (Churchill and Magna) that were fully expected to individually be running everything 100 percent, are now on a team and comprise 6 percent of those operations (each). 'They have adjusted their plans to play on a team that is run by New York horsemen. Empire: Lots of hard work, Saratogian, August 27, '' Our mission is to provide New Yorkers with racing that is both home grown and world class,' Jeff Perlee, the chief executive of Empire Racing, said in a statement Wednesday. ' The addition of these two great organizations to our team achieves that mission and prepares us to present the strongest possible bid to the state. '' Empire Joins Alliance in a Bid to Run New York Tracks, New York Times August 17, " The best architects give you the best plans, and the best contractors build the best buildings, said Jeff Perlee, chief executive officer of Empire. Racing bidder gains players, Times Union, August 17, Jeffrey Perlee, the head of Empire Racing Associates, said his group's bid represents the lifeblood of racing: the owners and trainers who make up the New York Thoroughbred Horsemen's Association. Perlee, whose group also has members tied to Bruno, disputed NYRA's track ownership position. The state owns the tracks, Perlee said. The state decides who runs the tracks. He suggested Empire Racing best understands horse racing's importance in the Capital Region: " his is our franchise. This is the Buffalo Bills. This is the Boston Red Sox. " Racing's `rehearsal, Times Union, August 2, Jeffrey Perlee, chief executive officer of Empire Racing Associates, which is run by New York-based owners and breeders and includes as partners Delaware North and Woodbine, sought to stress his group's New York ties. The home grown part is most important,' he said. Several competitors, including Magna Entertainment and Churchill Downs, are based out-of-state. He said his group's bid premise is to make sure the New Yorkers are firmly in charge' of the tracks. 14

15 Perlee went out of his way to note that Empire, unlike NYRA, believes the state owns the tracks. Unlike officials with Magna and other bidders, he stressed that Empire also believes the state government should play a major role in the running of the Aqueduct, Belmont, and Saratoga racetracks. They just don't get that, ' he said of other bidders. Perlee criticized the third world conditions' of the backstretch at the NYRA tracks. Under NYRA's leadership, he said the horsemen have been keenly missing ' from the operation of the tracks, a claim Duncker strongly disputed. He also talked of restoring integrity to racing in New York, which hit a low point a couple years ago after a number of high-profile legal troubles that spread through NYRA. Future of NY Racing Franchise Hot Topic at Conference, Blood-Horse, August 1, '' It is important that the decision makers do everything possible to ensure that racing does not become a branch office for some out-of-state operation, where the energy, talent and money goes out of New York,' said Jeff Perlee, the president and chief executive of Empire Racing Associates. ' It would not be good for the state or racing in New York. '' Race Is On for Right to Operate New York Tracks, New York Times June 5, 'I think the idea of a horseman's based bidding group has been percolating since talk of the franchise has been percolating. It makes inherent sense, when you think about it. The horsemen put on the show. There is an awful lot at stake for them, and by and large, I think, they have been bystanders. I think they concluded they could not afford to remain bystanders. Jeff Perlee Perlee says working with state a must, Saratogian, April 2, " Operating racing in New York is about protecting jobs, green space and the historic character of the New York tracks, said Charles Reiss, a longtime owner of thoroughbreds who was one of those named to the board of the new group, Empire Racing Associates. It is also about ensuring that these New York assets are managed and developed for New Yorkers by New Yorkers while protecting revenue sources for the state. " The Inside Track, Newsday March 8, " We just don't want anyone to come in from the outside and run VLTs and diminish the importance of horse racing, because horse racing won't produce the income VLTs will, NYTHA President Richard Bomze said on Monday. The whole purpose is to protect racing, to keep it as it is, and if not, improve it. This will guarantee horsemen will have an active role in the future of the running of racing in New York. The only way we can ensure that is if we're involved. 15

16 Richard Bomze New York horsemen bid crystallizes for state franchise, Thoroughbred Times, March 6, 2006 Empire Releases 57. A group of horsemen, breeders, and backstretch workers appeared in the heart of Saratoga today to support the call to keep the Video Lottery Terminal (VLT) program at New York State s race tracks in the hands of the New York thoroughbred industry to strengthen thoroughbred racing in the state. The VLT program was approved in the first place to benefit the entire New York thoroughbred community, said Dennis Brida, a longtime horseman and Executive Vice President of Empire Racing, the horsemen and breeder-led group bidding for the racing franchise. Separating VLTs and auctioning it off to a gaming operator with no background or connection to New York thoroughbred community is a repeat of past mistakes and it is wrong for the growth and future of the industry. At a gathering in Congress Park in downtown Saratoga Springs, just a short distance from the Saratoga Race Course, Brida made the following points concerning the future of racing: Like the State, Horsemen and Breeders desire a VLT operator who can deliver the most effective financial results, but they also expect an operator with a longstanding relationship with the New York thoroughbred community Separating the VLT program from track operations is a plan for which there is no successful model Simply establishing a dedicated revenue stream from a non-racing VLT operator is not sufficient and it repeats the failed OTB model of the 70 s Those interested in supporting thoroughbred racing should contact the Governor and the State Legislature to voice their support for placing VLTs in the hands of the New York thoroughbred industry Release 6/14/ The Ad Hoc Committee on the Future of Racing developments today made it clear the franchise process is a horse race and two competitors are running neck and neck. Now the focus moves to the decision makers. Governor-Elect Eliot Spitzer has gone on record identifying three key elements in this process --- integrity, racing, and economic development. This afternoon, Empire Racing handily won the integrity category and also won the racing operations category. 16

17 Interestingly, the Ad Hoc Committee engaged in no discussion whatsoever concerning economic development, a key element of Empire Racing s plan. Another key decision maker, Senate Majority Leader Joseph Bruno stated as recently as this week that the key factor in the process needs to be the interests of New York horsemen. In addition, Senator Bruno stated a for-profit approach holds the most promise for New York racing. The approach of the Ad Hoc Committee today was contrary to these priorities. Empire Racing is confident that when the ultimate decision is made this franchise will be awarded to the only qualified group in the process. This is the group that has expertise running some of the world's greatest tracks; represents 6,000 New York horsemen and breeders and knows how to create jobs, economic development and a great fan experience through racing-- and that's Empire Racing. Release November 21, Official documents reveal the New York Racing Association has repeatedly acknowledged that ownership of the State racetracks reverts to the State of New York when NYRA s franchise to operate the tracks expires next year. However, now faced with the possibility of losing the racing franchise, NYRA is changing its tune the private organization now claims its control of the tracks extends beyond the franchise period. NYRA s reversal puts it directly at odds with its own documents on the issue and with Attorney General Eliot Spitzer. Late last month at the Associated Press Forum Spitzer said, We (the people of New York State) own the land. I don t care what they (NYRA) say. NYRA s own official documents provide clarity on the land issue. For instance, in its 2002/2003 Audited Financial Statement (see page 7), and in every Audited Financial Statement before that dating back to at least 1995, NYRA stated: Under the franchise, title to the racetrack properties remain with the Association until the expiration of the franchise, unless the Association relinquishes the franchise, declines to conduct race meetings and parimutuel wagering, or voluntarily effects a corporate dissolution. Upon occurrence of any of these events, titles to the properties transfer to the Fund (NYS Thoroughbred Racing Capital Investment Fund an arm of State government). In addition, Gerard McKeon, who served as President of NYRA when land ownership issues were resolved, stated to the Blood-Horse last year: I don t think there s any question. The law is clear and the law says that if NYRA doesn t get the 17

18 franchise it goes out of existence, and when NYRA goes out of existence the properties go to whomever the legislature says it goes to. Period. NYRA s current lobbyist, William Crowell, stated in the Saratogian, There s a provision in racing law that says if the franchise is terminated, the state would succeed to the property. However, when state and federal investigations and federal indictments for tax evasion put NYRA in increasing danger of losing the franchise, NYRA began changing its official statements relating to the State s ownership of the tracks. In addition, this summer, as NYRA prepared its strategy, NYRA Chairman C. Steven Duncker told a forum at Albany Law School that NYRA owns the properties. In a further departure, NYRA President Charles Hayward told the Jockey Club Round Table that NYRA alone possessed the ability to resolve the issue amicably, inferring that litigation against the taxpayers was an option. No one can say for sure why NYRA would change its position now, particularly when they have previously clearly acknowledged the State s ultimate ownership, said Empire Racing spokesman Mark Grimm. Our concern is that they re trying to manufacture a bogus legal claim to somehow gain leverage and derail an open and competitive State bidding process. The audited financial reports are available on the Ad Hoc Committee on the Future of Racing s website ( Empire Racing is a group of visionary New York Horsemen and breeders seeking to revive New York racing. Exclusively supported by the New York Thoroughbred Horsemen s Association, Empire Racing represents the interests of the 6,000 owners, trainers, and farmers who provide New York State with $1.4 billion in economic impact, 17,000 jobs and preservation of 44,000 acres of open green space. More on Empire Racing can be found at Release October 18, Many in the New York racing community were alarmed to hear of NYRA s most recent financial problems, as relayed by NYRA President Charles Hayward at your Oversight Board meeting last week. The fact that less than a week earlier NYRA was publicly declaring its unparalleled success makes this financial news all the more startling and confusing. The information presented to your Board demonstrates that the status quo has failed and that fundamental change for New York racing is required. We are hopeful that 2007 will be a time of change for all of us. 18

19 Until that time however, much long term harm to the New York racing and breeding industry could be inflicted. In particular, a decision by the NYRA Board of Trustees to seek bankruptcy protections for themselves would impose great uncertainty on labor, individual New York horsemen and breeders, and thousands of families whose livelihood depends on racing remaining financially viable. For those reasons, we urge the Oversight Board to take necessary steps, including advancing public funds, to ensure that racing operations will continue until such time as a new, financially capable operator can be selected. Further, we do not believe that the release of these funds should be conditional on the approval of an agreement between NYRA and the casino operator MGM Grand concerning allocation of VLT proceeds. Significant questions have been raised about this unreleased agreement, the terms of which could bind and influence racing operations for many years, affecting the income available for necessary racing improvements and lease payments to the State s taxpayers. We are separately asking Comptroller Hevesi and Attorney General Spitzer to review and compare this agreement with other such VLT management contracts in the State and industry. We agree with Comptroller Hevesi s statement yesterday that if the agreement cannot be approved in its current form, the State should work with NYRA and MGM expeditiously to craft an acceptable arrangement. While this is occurring, we would hope that you see fit to release funds necessary to keep racing solvent and operating. Obviously, everyone would prefer if these funds were advanced to an entity that was reformed, responsive to the public, and able to generate financial confidence going forward. In the meantime we urge you to do whatever is necessary to keep the present track operator from endangering the future of New York racing Letter/ Release September 21, Empire Racing CEO Jeff Perlee said the agreement provides additional key components for Empire's bid for the New York thoroughbred racing franchise. Our mission is to provide New Yorkers with racing that is both home grown and world class, Perlee said. The addition of these two great organizations to our team achieves that mission and prepares us to present the strongest possible bid to the state. Release August 16,