ALBANY – Language included in the final state budget agreement terminates the appointment of every commissioner of the Western Regional Off Track Betting Corp., a response to a series of audits and media reports finding misspending by the public benefit corporation.
In addition, the bill’s language outlines a new voting process that will give Erie County and Buffalo new strength in the corporation’s oversight, while diminishing the strength of smaller, rural counties with lesser population that previously had outsized influence.
The hot-button issue of Medicaid reimbursement was among the highlights of the initial details that have trickled out since Hochul late Thursday announced a conceptual agreement on the fiscal year 2024 budget.
The budget language’s insertion was driven by Democratic State Sen. Tim Kennedy of Buffalo, who last year introduced several bills seeking to reform the corporation. Two aspects of his proposals made it into the final budget: one terminating the current board members’ appointments, and another recalibrating its voting strength based on population.
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“This is a big victory for the people of Western New York,” Kennedy said in an interview. “We are rooting out corruption, and we are removing a board that demonstrated a blatant disregard for the public good. We are looking to ensure that there is a fresh voice with representation that is going to empower the people of the Western New York region that OTB represents.”
Richard Bianchi, the current chairman of the Western New York Off Track Betting Corp., said in a statement Tuesday that the board was "disappointed" by the budget language.
A $1 tax increase on cigarettes, but no ban on menthols. A law allowing whistleblower lawsuits that claim wealthy people and corporations intentionally failed to pay taxes. The fine print of the state budget agreement is finally beginning to emerge.
"It was negotiated in secret with no open discussion, debate, or input from our member counties," Bianchi said. "In the short term, we will remain focused on fulfilling the responsibilities to our partners in local government as we look to evaluate potential next steps.”
The betting corporation is owned by Buffalo, Rochester and 15 Western New York counties, and its profits are supposed to be split among those governments. The corporation operates Batavia Downs and a dozen local betting parlors.
But the corporation has faced scrutiny in recent years both in the media and from State Comptroller Tom DiNapoli’s office. In 2021, DiNapoli auditors stated in one report that the corporation spent at least $121,000 on tickets to sporting events, concerts, food and alcohol for board members, employees and other people without the oversight required by state rules.
In a second audit, DiNapoli’s office found the corporation’s CEO and president, Henry Wojtaszek, did not reimburse the organization for his personal use of an official vehicle in a timely manner.
DiNapoli found lax oversight of operations by the board of directors, and in a 2021 statement, said that the corporation needed “to clean up its operations,” adding that revenues were “supposed to go to participating municipalities, not to give board members and employees generous perks and other benefits.”
At a briefing on Monday, Senate Majority Leader Andrea Stewart-Cousins said the final budget bill containing many of its most contentious initiatives – known as the “Big Ugly in Albany parlance – will be voted upon on Tuesday.
In addition, the Investigative Post reported in 2019 that the FBI was investigating the corporation’s awarding of contracts to politically wired companies.
Now, the state budget will allow for the entire board’s replacement, which could well bring a shakeup of the body’s staff.
Kennedy declined to say whether he believed Wojtaszek and other staff would be retained by a new board of directors, saying that would be at the discretion of the board. The budget language also does not bar the reappointment of current board members.
The legislative language, included in this year’s final and most complex budget bill, was posted Monday evening. The Senate and Assembly are beginning voting on the budget on Tuesday, bypassing the normal three-day aging process for legislation – and giving opponents little chance to fight back.
Asked about the language’s late public disclosure, Kennedy called the measure “a common sense good-government reform that the people have been clamoring for,” and said the reaction to similar proposals he made in 2022 had been overwhelmingly positive.
Republicans representing more rural areas have defended the corporation and said a shakeup ending the current voting rules would hurt rural communities.
Last week, U.S. Rep. Claudia Tenney, whose district covers a large portion of Central New York, issued a statement arguing that the changes sought by Kennedy would “dismantle, politicize, and disadvantage” rural communities.
“I stand with local leaders across the district in calling on Kathy Hochul to drop this misguided plan,” she said. “It should be dead on arrival during budget negotiations in the Albany sewer."
Senate Minority Leader Robert Ortt, a Republican whose district includes Niagara and Orleans counties and a portion of Monroe County, told The Buffalo News on Tuesday, "The Western Regional OTB language snuck into the state budget is Albany's latest attack on rural communities."
"Governor Hochul and Albany Democrats have conspired to eliminate the longstanding arrangement that allowed 15 counties and the cities of Rochester and Buffalo to have balanced representation on the OTB board," Ortt said. "The voice of rural counties is being smothered out simply because they are represented by Republicans. This is nothing more than a partisan power grab disguised as reform."
Kennedy said there was nothing partisan about his actions, and that his was simply responding to audits and reports finding reported malfeasance at the corporation.
“When the public is forced to see that the state comptroller is conducting audits and finding misuse of power and funds, and that the FBI is continuing an ongoing investigation, it demonstrates a continuing pattern of corruption that needs to be rooted out,” Kennedy said.
In 2022, Kennedy introduced three pieces of legislation seeking to reform the OTB: One revising the structure of the board based on population, a second capping the allowance of promotional items for members of the corporation and a third prohibiting corporation cars from being used as take-home vehicles.
A version of the first bill made it into the budget agreement, while the second two did not.
But Kennedy believes the measures left out – capping promotional items and prohibiting take-home vehicles – will pass the Senate in the coming weeks as stand-alone items, and says they also have support in the Assembly.
Under current law, each of the corporation’s 17 board members has had an equal vote on the board, according to Kennedy.
“That means a county like Schuyler County, with 17,000 people, has the same weighted vote as Erie County, with nearly a million people,” Kennedy said. “That’s not a fair, level playing field.”
The budget language set to be passed still provides that the corporation will be composed of 17 members: One for each of the 15 counties – appointed largely by county executives – one representing Rochester and one Buffalo, with their representatives appointed by mayors.
But the counties and cities will no longer have equal voting strength.
The representative of Erie County will have 24 votes. Monroe County has 20, Buffalo has 10 and Rochester has eight.
The representative of Niagara County also has eight votes; Chautauqua, five; Oswego, four; Steuben, Wayne, Cattaraugus and Cayuga, three; Livingston and Genesee, two; Wyoming, Orleans, Seneca and Schuyler, just one. The commissioners will serve four-year terms.
Bianchi, the corporation's chairman, defended the board's record. He said while many in the hospitality industry never recovered from the Covid-19 pandemic, the corporation "not only grew, but set new records for revenue, leading to the largest distribution of profits ever to member counties and cities."
"That leadership came from the Board of Directors," he said. "We are proud we of the direction and leadership we provided during those historically difficult times.”
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Albany budget terminates Off Tracking Betting Corp. board, overhauls voting rules - Buffalo News
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