Prospect of more scrutiny for OTB

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Batavia Downs, the flagship of Western Regional OTB. Photo by Garrett Looker.

Two state authorities appear to be eyeing probes into the Western Regional Off-Track Betting Corp., Investigative Post has learned.

The Inspector General, responding to a request from two state lawmakers, has obtained documents including buyout deals for Henry Wojtaszek, OTB’s outgoing  president and CEO, and two of his top lieutenants. The Inspector General’s office would neither confirm nor deny whether the records request has progressed into a formal investigation.

In addition, the state comptroller is considering a request from Erie County Comptroller Kevin Hardwick for a “performance and management” audit of OTB. Three good government groups have made a similar request.

The state Inspector General for Gaming is concerned with buyout payments for Wojtaszek and two other officials earlier this year. Two state lawmakers have argued that the buyouts are illegal under state law.

“We have received a request for documents from the Inspector General for Gaming and we have fully complied,” OTB spokesperson Michael DeGeorge said in a statement Wednesday.

Terry Connors, an attorney representing OTB, said the IG’s office requested copies of the buyout contracts for Wojtaszek and the two other officials “months ago.” 

“We provided them the same day,” Connors said. “And we haven’t heard anything since. Quiet as a church mouse. That’s a good thing.”

He said he and OTB believe the buyouts are legal.

“We reviewed the contracts and determined they’re in compliance with the law,” Connors said.

The IG’s office declined to comment.

“In the interest of maintaining the confidentiality of complainants, witnesses, and subjects of any allegations, we do not confirm the existence or status of investigations unless and until a finding of wrongdoing is made,” Press Secretary Michael Cook said.

The IG probe follows an August request by state Sen. Sean Ryan and Assembly Member Monica Wallace for that agency and the New York Attorney General to investigate the buyouts. At that time, the lawmakers cited a law Wallace helped pass that bans buyouts for public officials larger than three-months pay.

“It is highly unlikely that the severance packages issued to OTB officers are legal,” the lawmakers wrote to the Inspector General and Attorney General in August.

Wojtaszek’s buyout, set to be paid by the end of the week, is equal to one year’s pay, or $287,000. Chief Financial Officer Jacquelyne Leach’s buyout, $122,000, is equal to half of her annual salary of $244,000. A third official, Vice President of Administration William White, was slated to receive a buyout payment of $87,000, equal to half of his $175,000 salary, though his buyout agreement makes no mention of such a payment. 

Henry Wojtaszek’s buyout agreement. Obtained via FOIL.

DeGeorge on Wednesday did not respond to a question about whether White will still receive the payment when he departs next year.

Ryan, in a statement Wednesday, said he welcomed the IG’s probe.

“Our OTB has been mired in corruption for years, and the golden parachute payouts for Henry Wojtaszek and other top executives is just the latest in a series of scandals,” he said. “I was proud to join with my colleague Assembly Member Monica Wallace to call for this investigation, and I hope it will lead to real accountability for New York taxpayers.”

It’s not clear if the AG’s office has opened its own investigation; a spokesperson did not return a phone call seeking comment. 

It’s also not clear if state Comptroller Thomas DiNapoli will again probe OTB. His office in 2021 completed two audits of OTB that led to the agency changing how it distributes Buffalo Bills and Sabres tickets and Wojtaszek giving up his use of an agency vehicle. 

OTB operations have also been the subject of an investigation by the FBI, which has not produced any indictments.

In November, Hardwick sent a letter to DiNapoli requesting a “performance and management audit” of OTB. Hardwick wrote that efforts by his office to get information from OTB have been met with resistance — including those by Deputy Comptroller Timothy Callan who is also Erie County’s representative on the agency’s board of directors.

“While WROTB has provided some data and information, their management team has failed to answer many of my questions,” Hardwick wrote. “Despite your office’s two recent audits of WROTB, it appears little has changed, both in the culture and in their behavior.”

In November, good government groups Reinvent Albany, Common Cause and the League of Women Voters similarly called on the state comptroller to complete a “top to bottom” audit of OTB, citing numerous concerns.

Hardwick requested that an audit by DiNapoli’s office include the buyouts offered to Wojtaszek, Leach and White, among other subjects, including:

• Salary increases “which appear to lack merit.”
• The hiring of staff “who have no background in racing or gaming.”
• Hiring consultants “without conducting any apparent competitive procurement.”
• Sponsorships of various groups that “have not been approved by the Board of Directors and which appear to serve little purpose.”

Hardwick suggested that those activities are “questionable at best and quite possibly violations of State law.”

The hirings and salary increases likely refer to new CEO Byron Brown’s hiring of several people from his mayoral administration in Buffalo, including DeGeorge and Chief of Staff Steven Casey. Brown is set to earn a $295,000 salary; Casey, $190,000; and DeGeorge, $130,000.

The state comptroller’s office has “been in touch with us and I get the sense they’re taking this seriously,” Hardwick said Wednesday. 

In response to Hardwick, DiNapoli’s office said by letter that it would review the matter. A spokesperson for DiNapoli said no audits had been opened yet.

“Your correspondence is under review and consideration,” Deputy Comptroller Robin Lois wrote. “We will continue to review available

information and monitor the situation and financial decisions made by Western OTB officials.”

Hardwick said there’s “plenty of stuff” for DiNapoli and his team to probe at OTB, including the buyouts.

“I hope at the very least they will weigh in on those buyouts because they’re obscene,” he said. “It’s a target-rich environment for an auditor.”

J. Dale Shoemaker