Senators Craig Johnson, John Sampson, Joe Addabo and Eric Adams Ensnared in Scandal Turned Over to US Attorneys and Manhattan DA
Floral Park, Elmont and Franklin Square residents are shocked today by the findings of the New York State Inspector General’s Report who names State Senators highlighted in AEG email documents that were to form a voting block to deliver a sweetheart deal for the scandal plagued VLT operator at Aqueduct Race Track. The report charges Senate majority leaders of “cronyism and political self-dealing in the doomed selection last winter of a casino operator for the Aqueduct Race Track.” In addition, it blasts the Senators involved for leaking information on the racetrack proposals to lobbyists and grabbing campaign cash for Senate campaigns and directing it to Democratic Senate campaigns. Locally, Senator Craig Johnson was one of the recipients of DSCC money.
“This process was doomed from the start," Inspector General Fisch said. "At each turn, our state leaders abdicated their public duty, failed to impose ethical restraints and focused on political gain at a cost of millions to New Yorkers. Unfortunately, and shamefully, consideration of what was in the public’s best interest, rather than the political interest of the decision makers, was a matter of militant indifference to them," Fisch continued.
The voting block unveiled in the internal email of AEG consisted of State Senators Craig Johnson, John Sampson, Joe Addabo and Eric Adams. The committee was formed after State Senator Malcolm Smith had to recuse himself of the deal due to his business relationships with Rev. Floyd Flake. Smith formed the committee to deliver the deal for AEG. The special Senate tapped committee by Senator Smith was uncovered by an internal AEG email recovered by the Inspector General.
AEG officials went to outrageous lengths to maintain their favored status with the Senate Democrats. They went so far as to hire a Harlem-based developer Don Cogville at Senator John Sampson's behest. They also shelled out tens of thousands of dollars in contributions to Senate campaigns, trade groups and the National Action Network in hopes of helping their proposal. Fisch referred the findings to Manhattan District Attorney Cyrus Vance and the U.S. Attorney's Office, which is already conducting a parallel criminal investigation, to consider potential criminal charges.
One of the focal points of the investigation is the over $100,000 in political campaign contributions to Democratic State Senate campaigns. Locally, State Senator Craig Johnson has received $148,750 from the Democrat Senate Campaign Committee.
In addition, local politicos were stunned to read page 160 of the report, whereby local State Senator Craig Johnson was revealed to be personally tapped by Senator Malcolm Smith to be part of a voting bloc with Senators John Sampson, Joe Addabo and Eric Adams in getting AEG the contract. The bloc was formed to deliver the AEG deal and grease the wheels for the scandal plagued operator.
AEG was chosen by Gov. Paterson and legislative leaders in January only to have the deal blow up after the state Lottery found the politically-connected outfit unalienable and unfit to operate at Aqueduct.
Longtime local political observers who looked at the report and of the involvement of State Senator Craig Johnson in the deal were direct in their comments. “This is very serious stuff. Craig was named by AEG with these Senators and he has taken a lot of money from the campaign committee. What really hurts and is ironic is the fact that Craig Johnson is the Chairman of the Senate Investigations Committee. This is the kind of thing where people with scruples resign and walk away quietly.”
Local observers also noted that Senator Johnson was a prime supporter of Senator Sampson and Senator Smith. Smith campaigned extensively in Elmont for Johnson and Sampson promoted Johnson in the Senate leadership.
Report Details: The report filed Thursday called the Democratic leadership of the State Senate to task in it’s specific findings. Specifically, the Inspector General determined that:
- Governor Paterson’s office ignored expert advice from the state Budget Director and Division of the Lottery, which urged them to disregard AEG’s bid. AEG was financially precarious due to its heavy reliance on debt and significant licensing issues.
- Senate leaders leaked bid analyses to AEG lobbyists which gave them an advantage.
- Senator Sampson likely pressured AEG to include a New York City contractor in the deal before he would select AEG as the winner.
- Senator Malcolm Smith maintained a façade of recusal from the process but still advocated for AEG.
- Assembly Speaker Silver, who believed AEG was not the best choice, failed to actively participate in the process.
AEG was selected on January 29, 2010. But public pressure and post hoc conditions imposed by Speaker Silver led to the dissolution of the deal. The public outcry was prompted by news that Governor Paterson sought political backing from an AEG partner, the Reverend Floyd Flake, three days after AEG’s selection. In addition, AEG offered the state $100 million less than other bidders. The Inspector General determined that the Governor’s meeting with Flake was ill-advised but found no evidence of a quid pro quo. A new vendor, Genting New York, LLC, was chosen in August after a streamlined process run by Lottery.
In February 2010, the Inspector General’s Office began its investigation and shortly thereafter received a request from Assembly Speaker Silver to review the entire bid process. After an eight-month investigation, the Inspector General reached the following conclusions:
From the beginning, Senate officials improperly aided AEG by leaking competitive bid data. In May 2009, a secretary to Senator Angelo Aponte e-mailed AEG consultant Hank Sheinkopf an internal memo detailing and analyzing all six competing bids. When questioned, Aponte claimed not to recall why his assistant would release the memo. Aponte’s testimony was deemed not credible. Sheinkopf invoked his Fifth Amendment right against self-incrimination in a possible criminal proceeding.
In November 2009, Senator Sampson disclosed inside information to AEG lobbyist and former state Senator Carl Andrews. Sampson exhibited further poor judgment when he attended a February 2010 “victory party” at Andrews’ Albany home after AEG was selected, but before the Memorandum of Understanding was finalized. Senator Sampson apparently insisted that his preferred developer, Don Cogsville, be included in AEG’s non-gaming development plans. When questioned by the Inspector General’s office, he stated that he could not recall, among numerous other significant matters, whether he had recommended Don Cogsville.
Sampson sued to prevent the Inspector General from getting the same records he turned over to Andrews. Andrews also filed a lawsuit, which is ongoing, against the Inspector General, to prevent disclosure of his communications with the Senate.
Campaign contributions further politicized the procurement with the Senate Democratic Campaign Committee directing AEG contributions. Under standard procurement practices, such acceptance of money by a decision-maker would be legally prohibited. Three potential vendors – SL Green, AEG, and Delaware North – and their associates gave more than $100,000 to elected officials during the bidding process.
Senate President Pro Tempore Malcolm A. Smith, who stated he had recused himself from the selection process due to his personal relationship with AEG partner, the Reverend Floyd Flake, continued to advocate for AEG and was repeatedly updated by Senate staff, e-mail evidence revealed. Senator Smith also attended the February 2010 AEG victory party at Carl Andrews’ home with Senator Sampson and Senator Eric Adams, chair of the Racing and Wagering Committee.
The Inspector General’s report can be accessed on the internet by simply going to www.ig.state.ny.us. You can read details of the report as well as press releases put out by the non-partisan office.