Lawmakers ask for state probe into OTB buyouts

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OTB President and CEO Henry Wojtaszek. Photo by Garrett Looker.

Two Western New York lawmakers — state Sen. Sean Ryan and Assemblywoman Monica Wallace — have asked the state’s Attorney General and Inspector General to investigate buyouts for three executives of the Western Regional Off-Track Betting Corp., arguing the packages are illegal.

Citing a law Wallace helped pass in 2019 that bans so-called “golden parachutes” for leadership of public authorities, the lawmakers argue in a five-page memo to the Attorney General and Inspector General that the buyouts violate that and/or other state laws which prohibit gifts and large buyouts to public officials.

“The three severance packages total over half a million dollars of taxpayer money, and the decision to grant them warrants a thorough review by your offices,” the lawmakers wrote in an accompanying letter to state officials.

“We urge you to review the memo and the actions of the Western Regional OTB.”

In the memo, the lawmakers further cite a state constitutional ban on gifting public funds and the prohibition in the state criminal code on defrauding the government.

“It is highly unlikely that the severance packages issued to OTB officers are legal,” the memo concludes.

“This is yet the latest in a long line of wasteful spending by the OTB,” Wallace told Investigative Post in an interview Wednesday. “I have confidence that [they] will take our concerns seriously and, given what we’ve said about the abuses, they will open an investigation.”

Neither OTB President and CEO Henry Wojtaszek nor spokesperson Ryan Hasenhauer responded to a request for comment. An attorney for the OTB has previously said the buyouts are permissible under state law.

The Inspector General is charged with investigating fraud and corruption in state government; the Attorney General has broad-based powers to initiate civil and criminal investigations and prosecutions. 

The request to investigate the buyouts is the latest salvo from Buffalo-area Democrats against the public gambling agency and its board of directors.

In June, the OTB board of directors “renegotiated” the contracts of Wojtaszek, Chief Financial Officer Jacquelyne Leach, and Vice President of Administration William White to allow them to leave their positions with substantial payouts in hand.

According to the renegotiated contracts, Wojtaszek would earn a full year’s pay — $299,000 — when he departs at the end of year. Leach would depart early next year with a $122,000 buyout, half of her $244,000 salary. White would leave next April with a buyout of $87,000, half of his $175,000 salary.

The request for an investigation represents an escalation by the lawmakers who have been critical of the buyouts since the OTB board of directors approved them in late June. Wallace initially called them “blatantly illegal” while Ryan said they were “an outrage.”

She first called on the OTB board to nix the renegotiated contracts, suggesting the board should do so at its monthly meeting in July. The board took no such action during that meeting. Wallace said she was frustrated by the inaction.

“We’ve already given you a heads-up that we think this is wildly inappropriate and unlawful,” she said. “We need to take it to the next level and ask for an investigation.”

In the memo, the lawmakers argue that Wallace’s “Golden Parachute Law” applies to OTB.

Attorney Terry Connors, who represents OTB, previously said the law didn’t apply, as the agency was established under state gambling law to which the Golden Parachute language doesn’t apply.

“While I have great respect for Assemblymember Wallace, our review suggests she was wrong and cited an inapplicable statute,” Connors said in a July statement to Investigative Post. “Nevertheless, OTB will cooperate with any agency that wishes to review the severance payments.”

The memo argues Connors’ analysis was incorrect. It goes on to argue that, even if a court were to rule that the Golden Parachute Law didn’t apply, the buyouts may constitute an illegal “gift of public funds,” which is against the state constitution.

The lawmaker’s memo concluded by citing the case of Davis Etkin, the longtime leader of the Capitol Region OTB, who died in 2018. In 1998, Etkin was accused in a state audit of mismanaging $4.3 million in agency funds and later served two years in state prison. Among other offenses,  Etkin was accused of spending $750,000 in agency funds on meals for friends and family while earning a $219,000 salary — all while his agency lost money year after year.

Ryan, D-Buffalo, and Wallace, D-Lancaster, compared Wojtaszek to Etkin in the memo, noting that Wojtaszek “has been accused of using OTB funds to purchase tickets for concerts and sporting events, pay for a car and cell phone for himself, and awarding contracts to politically connected vendors.”

The memo concludes: “All of this behavior appears to fall under the umbrella of ‘obtain[ing] property, services or other resources from … a governmental instrumentality within the state by false or fraudulent pretenses.’”

“The bottom line is this is obviously wrong,” Ryan said Wednesday.

“They did not do the right thing and this is why we’re taking this action. We need to get them to stop wasting money that’s meant for taxpayers.”

J. Dale Shoemaker