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> Stop scratching on holidays
Stop scratching on holidays
Published: June 1, 2012
Off Track Betting in New York State has been racing into a crisis called shrinking revenue. Some people have spitballed a solution: Don’t close on holidays.
New York State Racing Law bars racing on Christmas, Easter and Palm Sunday, and the state has ruled OTBs can’t handle action on those days, even though they could easily broadcast races from out of state.
“You should be able to bet whenever you want,” said Jackson Leeds, a Nassau OTB employee who makes an occasional bet. He added some irrefutable logic: “How is the business going to make money if you’re not open to take people’s bets?”
Elias Tsekerides, president of the Federation of Hellenic Societies of Greater New York, said OTB is open on Greek Orthodox Easter and Palm Sunday.
“I don’t want discrimination,” Tsekerides said. “They close for the Catholics, but open for the Greek Orthodox? It’s either open for all or not open.”
OTB officials have said they lose millions by closing on Palm Sunday alone, with tracks such as Gulfstream, Santa Anita, Turf Paradise and Hawthorne running.
One option: OTBs could just stay open and face the consequences. New York City OTB did just that back in 2003. The handle was about $1.5 million – and OTB was fined $5,000.
Easy money.
In Greece, the Banking Chief Draws Scrutiny
By LANDON THOMAS Jr.
ATHENS — In an era when central bankers like Ben S. Bernanke dominate
the global economic stage, few hold as much power within their own
country as Georgios A. Provopoulos, the governor of the Bank of Greece,
who has played a crucial role in keeping Greece out of bankruptcy and in
the euro zone.
But now Mr. Provopoulos faces one of the bigger challenges of his
tumultuous reign: an investigation into whether he abused his position
by clearing a banking deal involving his former employer and a business
magnate who was subsequently charged with embezzlement and fraud.
In a confidential report issued last May, a senior Greek prosecutor said
that Mr. Provopoulos approved the 71 million euro ($96 million) deal
despite warnings from his staff regarding the buyer’s finances. The
report, parts of which were reviewed by The New York Times, hints at the
scope of the investigation, about which little has been previously
disclosed.
There is no evidence that Mr. Provopoulos profited personally from the
transaction, which was ultimately approved. But his role — and the
chance, however remote, that he might face criminal charges — could have
ramifications beyond Greece. Other countries in the euro zone have
invested more than 40 billion euros to shore up the Greek banking
system. In the process, they have pressed Athens to clean up the
corruption and crony capitalism that have been at the root of the
country’s problems.
According to the report, Mr. Provopoulos allowed the businessman,
Lavrentis Lavrentiadis, to enter into a deal with Mr. Provopoulos’s
former employer, Piraeus Bank, at a vastly inflated price. The
transaction enabled Mr. Lavrentiadis to gain control of another bank,
Proton, and, in the process, benefited Piraeus, which was struggling.
The dossier cites a number of red flags that banking supervisors raised
about Mr. Lavrentiadis, including excessive debt and suspicions of money
laundering. Last December,
he was charged with embezzling from Proton to prop up his other
interests. He is being held in prison pending trial and has denied the
charges.
Proton Bank had to be bailed out by the Greek government, at a cost of 1.3 billion euros.
The deputy prosecutor at the time, George Kaloudis, argued in his report
that there were enough questions concerning the transaction to warrant
further investigation of the central bank’s handling of the affair. Mr.
Kaloudis, who is no longer in his position, declined to comment.
Mr. Provopoulos, in an interview, said all of his actions were taken to
prevent the Greek financial system from imploding and that the central
bank’s board unanimously approved the Proton deal. He added that Mr.
Lavrentiadis had a 20-year record as a successful entrepreneur and had
promised to make the bank a more conservative institution.
“He was ready to inject additional capital in the bank, and he satisfied
all formal and legal requirements,” Mr. Provopoulos said. He pointed
out that Mr. Lavrentiadis was ultimately arrested and charged based on
evidence provided by the central bank.
The controversy over Mr. Provopoulos and the Greek bank bailouts echoes
the public discontent over the taxpayer-financed rescues of large
American banks during the financial crisis that began in 2008. Five
years ago, Henry M. Paulson Jr., the former Goldman Sachs chief who was
then Treasury secretary, and others with ties to Wall Street
orchestrated those bailouts, prompting a public outcry.
In Greece, Mr. Provopoulos fast-tracked a slate of deals that
transformed Piraeus Bank, where he had been a vice chairman before
joining the central bank, into the nation’s most powerful bank. The
legal saga is also a visible sign of a behind-the-scenes power struggle
between Mr. Provopoulos and the government of Prime Minister Antonis
Samaras over control of the country’s banks, which for decades have been
a source of patronage and influence in Greece.
Whether prosecutors will formally charge Mr. Provopoulos is unclear. Mr.
Lavrentiadis’s lawyers have argued that their client’s case and that of
Mr. Provopoulos must be investigated together, as Mr. Kaloudis
suggested in his report.
The governor’s supporters say that the inquiry is politically motivated
and baseless, an attempt to force out Mr. Provopoulos so that the
largely discredited political class can reassert itself. But Mr.
Provopoulos’s critics argue that the playbook used in the Proton deal —
described as a series of back-room maneuverings that rewarded Michalis G. Sallas, the domineering chairman of Piraeus Bank
— was deployed repeatedly, most recently when Piraeus bought the Greek
operations of three Cypriot banks last March at a knockdown price of 524
million euros, and a few months later booked a profit of 3.5 billion
euros on the transaction.
“The position of the governor has become very strong, and I do not think
that he has been subjected to proper scrutiny,” said Pavlos
Eleftheriadis, a law professor at Oxford University who has been
critical of how special interest groups in Greece have expanded their
influence and power in recent years. “There was the spectacular failure
of Proton, and there are questions about the Piraeus deal in Cyprus. We
need root and branch reform of all our institutions — including the Bank
of Greece.”
It is not hard to see why Mr. Provopoulos has become a lightning rod. He
has done little to disguise his low regard for the political
establishment, openly criticizing its fiscal policies and privately
upbraiding both the conservative New Democracy party and the
left-leaning Pasok party for not attacking Greece’s economic problems
with more force and speed.
“I am not in this job to please politicians,” Mr. Provopoulos, 63, said
in an interview here in his capacious office. “I am not just an ordinary
citizen. I have much larger responsibilities. My actions will be judged
in the future after the dust has settled and people are in a better
position to assess the results.”
His senior status within the governing council of the European Central
Bank, which, along with the International Monetary Fund and the European
Commission, has pursued a brutal austerity regime for Greece, has fed
suspicion that he identifies more closely with technocrats in Brussels
and Frankfurt than with the beleaguered Greek public.
And he has indirectly challenged the authority of Mr. Samaras, who
became prime minister in 2012 and who had expected that the role of
banking kingmaker would be reserved for the prime minister, as has been
the custom in Greece.
For decades, political influence in this country has been a direct
function of a politician’s ability to borrow and spend, with local
banks, as the main buyers of Greek government bonds, acting as the
primary facilitators. Under an austerity regime, such an approach is no
longer possible. And as governments have come and gone — to date, Mr.
Provopoulos has survived five prime ministers and seven finance
ministers — the power of the Bank of Greece’s governor has only
solidified.
Trained as a professor of economics, Mr. Provopoulos is no ivory-tower
academic. His style — self-confident, if not a touch combative — conveys
the attitude of a top-level bank executive, the role he performed for a
decade before taking charge of the Bank of Greece in 2008. As he sees
it, his experience as a no-nonsense deal maker has been critical to
Greek banks, in preventing them from succumbing to last year’s
near-fatal bank run and in their re-emerging now with a fresh charge of
capital, courtesy of the European taxpayer.
His response to the bank panic had the feel of a military campaign.
Under cover of nightfall, cargo planes from Frankfurt and other European
capitals flew in pallets of cash, which were then transferred by boat,
truck and train to banks throughout the country. And with one Greek bank
after the other facing possible failure, the spate of bank mergers that
he orchestrated in such a short period was unprecedented.
“My experience as a commercial banker was very helpful,” he said. “I
believe we did a good job — if the banking system had not been protected
we probably would have had to exit the euro area.”
During the struggle to salvage the Greek economy, he said, nodding
gravely in the direction of his desk, “the center of gravity was right
here.”
Mr. Provopoulos’s six-year term concludes next June, and while it is
customary for new prime ministers to name their own central bank heads, a
growing number of bankers and investors argue that Mr. Provopoulos
should be reappointed in light of the country’s fragile financial
condition. But the Proton investigation could change that.
To some extent, the Proton transaction gets at the essence of what has
made Mr. Provopoulos such a polarizing figure here. Pulled together
quickly at the end of 2009 and early 2010, the deal drew upon the
central banker’s crisis management skills and showed his willingness to
make a chancy bet in the hope that the payoff of a more stable banking
system would justify the risks. But it also shines a not-so-flattering
light on the murky give-and-take among bankers, business leaders and
government officials that has long been par for the course in Greece and
that many believe lies at the root of the country’s economic collapse.
At the time, Mr. Lavrentiadis was sitting on over 2 billion euros of
debt. Piraeus, under Mr. Sallas, was looking to unload its 31 percent
stake in Proton, which it had acquired in 2008.
The deal, as Mr. Provopoulos saw it, would solve two problems: it would
give Piraeus a needed infusion of cash and the shaky Proton a new owner
who promised to invest in and stabilize the institution.
The Proton deal was announced on Dec. 29, 2009. The next day, Mr.
Lavrentiadis wired 71 million euros to Piraeus, according to the
prosecutor’s report — even though the sale had not been formally
approved by the central bank’s regulatory division.
As weeks passed without a nod from regulators, Mr. Lavrentiadis became
worried that he would never gain control of the bank. Mr. Lavrentiadis
told prosecutors that he met with Mr. Sallas, the Piraeus chairman, in
late March and said that he had decided to pull out of the deal.
“Don’t do that,” Mr. Sallas replied, according to Mr. Lavrentiadis’s
account. “Let me call my good friend George Provopoulos, and he will do
what is needed to get this deal cleared.”
A few days later, the central bank approved the sale.
Piraeus Bank, in a statement, said: “The allegation that Piraeus Bank or
its chairman intervened inappropriately to facilitate the sale of
Proton Bank shares to Mr. Lavrentiadis bears absolutely no resemblance
to reality and reflects the diversionary defense line recently concocted
by Mr. Lavrentiadis, a full 28 months after he was initially charged."
At the root of Mr. Provopoulos’s defense is his view that at the time of
the deal, in March 2010, Mr. Lavrentiadis had a strong enough
reputation as a businessman to be approved as a new bank owner in
Greece. This was not, however, an opinion that was shared by the head of
Cyprus’s central bank, who rejected an attempt by Mr. Lavrentiadis to
buy a bank in Cyprus during the same period, contending his finances
were questionable.
In retrospect, Mr. Provopoulos said, he accepts that Mr. Lavrentiadis
was a bad actor. But he rejects the criticism that the Proton sale and
Piraeus’s Cypriot deals reveal any favoritism to his former employer or
Greek banks in general.
“My first and only priority is to ensure the stability of the financial
sector,” Mr. Provopoulos said. Mr. Sallas of Piraeus was prepared
to take risks that others were not, he added.
As for Mr. Lavrentiadis, he continues to protest his innocence.
“If I am guilty,” he said recently to government prosecutors, “then so are Mr. Sallas and Mr. Provopoulos.”
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