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NYRA's CEO had $75,000 'mentor'
Records fuel questions about agency's ties with search firm
By James M. Odato
Updated 6:25 am, Monday, November 4, 2013
Christopher Kay speaks about the Travers Stakes in the paddock of the Saratoga Race Course Aug 21, 2013 in Saratoga Springs, N.Y. during the post position draw in which Verrazano was named the morning line favorite to win the Travers Stakes which will run on Saturday at Saratoga. (Skip Dickstein/Times Union)
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The New York Racing Association paid a search firm $130,060 to come up with the winning candidate for chief executive officer. Once NYRA's board acted on that recommendation and hired Christopher Kay, the payments didn't stop.
According to people familiar with the arrangement NYRA made with RSR Partners, a managing partner with the headhunting firm that found Kay was retained for another $75,000 to "mentor" the new CEO about the world of sports management.
Kay bonded with the adviser, lawyer John Keitt, to the point that Kay came very close to hiring him as NYRA's next chief counsel. But once the Cuomo administration learned of the plan, state officials raised concerns about the optics and suggested that Chairman David Skorton unwind the proposal. Keitt backed out while this push and pull was going on, according to a person familiar with the situation.
Keitt, a former top lawyer for the Associated Press, did not take calls from a reporter. His colleague at RSR, Joseph Bailey, said the firm never talks about its relationships with clients. NYRA spokesman Eric Wing also would not talk about the matter.
NYRA partially granted a Freedom of Information Law request for information about RSR's fees and reports. The limited information provided shows that the Greenwich, Conn.-based RSR received three payments in April and May for its search work, plus some expenses. Not included in the documents provided under FOIL was any mention of the additional deal with Keitt for his mentoring services — a type of consulting known as "onboarding."
The concern within NYRA is that the Cuomo administration will try to force a lawyer it prefers on the now publicly controlled racing operation, which holds the keys to the state's three principal thoroughbred tracks, according to a person familiar with the situation.
Kay, who comes from a corporate law background, is unfamiliar with racing businesses but was hired for his broader experience in corporate and not-for-profit operations. In mid-October, he abruptly dismissed Kenneth V. Handal, NYRA's chief counsel; NYRA officials have not said who would assume the responsibilities of the top legal executive. Wing would not say what the process for filling the position will be.
NYRA this month also hired an executive in charge of racing, Martin Panza. The appointment comes four months after Kay took the top job at a salary of $300,000. He can earn another $250,000 in bonus money for meeting accomplishments that have not been revealed.
Lottery seeks advice
On Sept. 13, the Division of the Lottery notified prospective bidders that it desires proposals for "market research regarding alternative approaches for the future of lottery in New York state." The ad for the request said a bidder may be picked as soon as Oct. 23. The notice said the study sought needed to take into consideration the pending referendum on casinos.
The study is sought without knowing the outcome of Tuesday's vote on whether the public supports changing the state constitution to allow for commercial casinos.
Lottery spokesman Lee Park said staff considered this the right time since the landscape of gaming will change. Indeed, even if the casino referendum fails, the state plans to allow up to six more video lottery terminal centers to be added to the nine racinos already operating. Lottery officials say VLTs compete for gambling dollars and have taken away from traditional Lottery revenues.
The request to bidders says the report desired must be delivered 45 days after Election Day.
"It is believed that the state does not fully capitalize on the economic development of legalized gambling," the notice to bidders says. The contractor is expected to be chosen soon, said Park, adding that the Lottery could extend deadlines.
The ad says a five-year plan is sought and that online gambling options are in question, although a marketing strategy for such alternatives is not specifically required. The division also said that if the bidders want to weigh in on developing problem gambling programs, they must indicate the costs of any recommendations.
Several states are looking at options for their Lottery products, with some weighing whether to offer a hand-held computer-access option.
Do you have a story about waste and abuse of public funds? Contact James M. Odato at518-454-5083, jodato@timesunion.com or on Twitter at @JamesMOdato
According to people familiar with the arrangement NYRA made with RSR Partners, a managing partner with the headhunting firm that found Kay was retained for another $75,000 to "mentor" the new CEO about the world of sports management.
Kay bonded with the adviser, lawyer John Keitt, to the point that Kay came very close to hiring him as NYRA's next chief counsel. But once the Cuomo administration learned of the plan, state officials raised concerns about the optics and suggested that Chairman David Skorton unwind the proposal. Keitt backed out while this push and pull was going on, according to a person familiar with the situation.
Keitt, a former top lawyer for the Associated Press, did not take calls from a reporter. His colleague at RSR, Joseph Bailey, said the firm never talks about its relationships with clients. NYRA spokesman Eric Wing also would not talk about the matter.
NYRA partially granted a Freedom of Information Law request for information about RSR's fees and reports. The limited information provided shows that the Greenwich, Conn.-based RSR received three payments in April and May for its search work, plus some expenses. Not included in the documents provided under FOIL was any mention of the additional deal with Keitt for his mentoring services — a type of consulting known as "onboarding."
The concern within NYRA is that the Cuomo administration will try to force a lawyer it prefers on the now publicly controlled racing operation, which holds the keys to the state's three principal thoroughbred tracks, according to a person familiar with the situation.
Kay, who comes from a corporate law background, is unfamiliar with racing businesses but was hired for his broader experience in corporate and not-for-profit operations. In mid-October, he abruptly dismissed Kenneth V. Handal, NYRA's chief counsel; NYRA officials have not said who would assume the responsibilities of the top legal executive. Wing would not say what the process for filling the position will be.
NYRA this month also hired an executive in charge of racing, Martin Panza. The appointment comes four months after Kay took the top job at a salary of $300,000. He can earn another $250,000 in bonus money for meeting accomplishments that have not been revealed.
Lottery seeks advice
On Sept. 13, the Division of the Lottery notified prospective bidders that it desires proposals for "market research regarding alternative approaches for the future of lottery in New York state." The ad for the request said a bidder may be picked as soon as Oct. 23. The notice said the study sought needed to take into consideration the pending referendum on casinos.
The study is sought without knowing the outcome of Tuesday's vote on whether the public supports changing the state constitution to allow for commercial casinos.
Lottery spokesman Lee Park said staff considered this the right time since the landscape of gaming will change. Indeed, even if the casino referendum fails, the state plans to allow up to six more video lottery terminal centers to be added to the nine racinos already operating. Lottery officials say VLTs compete for gambling dollars and have taken away from traditional Lottery revenues.
The request to bidders says the report desired must be delivered 45 days after Election Day.
"It is believed that the state does not fully capitalize on the economic development of legalized gambling," the notice to bidders says. The contractor is expected to be chosen soon, said Park, adding that the Lottery could extend deadlines.
The ad says a five-year plan is sought and that online gambling options are in question, although a marketing strategy for such alternatives is not specifically required. The division also said that if the bidders want to weigh in on developing problem gambling programs, they must indicate the costs of any recommendations.
Several states are looking at options for their Lottery products, with some weighing whether to offer a hand-held computer-access option.
Do you have a story about waste and abuse of public funds? Contact James M. Odato at518-454-5083, jodato@timesunion.com or on Twitter at @JamesMOdato
Do you have a story about waste and abuse of public funds? Contact James M. Odato at518-454-5083, jodato@timesunion.com or on Twitter at @JamesMOdato
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