INVESTIGATIVE POST Article-
The claim: board members should pay back the public for expenses related to entertainment, health insurance and politically wired contractors.
Earlier this month a federal court subpoenaed a host of current and former board members at Western Regional Off-Track Betting Corp., as part of a lawsuit seeking to hold the directors liable for the agency’s alleged misuse of millions of public dollars.
The lawsuit aims to compel those 21 board members to pay back to OTB — and thus to the 15 counties and two cities that own the agency — money “improperly used” to purchase health insurance for board members, expensive tickets to sporting events and concerts, and contracts for politically connected firms.
Specifically, the lawsuit claims that OTB’s board members approved:
- Spending “approximately $500,000 per year” for at least the past decade on “deluxe quality health, dental and vision insurance” for board members, even though the state attorney general and the state comptroller deemed the practice impermissible, and the agency’s own legal counsel advised the board the benefit “was unauthorized … and could lead to civil or other liability for the Board of Directors.”
- Spending “in excess of $300,000” each year on suites for Bills and Sabres games, concerts, golf outings and other events. “[M]ost of … the … Special Events Tickets are being used by [OTB CEO Henry] Wojtaszek, his family and friends … and other members of the WROTB Board of Directors,” according to the lawsuit.
- Directing more than $1.3 million in consulting contracts to three firms with ties to the Republican and Conservative parties in Niagara and Monroe counties and to OTB board members.
OTB — which runs the Batavia Downs racetrack, casino and hotel, as well as betting parlors and kiosks throughout the region — has been beset in recent years by allegations that it is a patronage pit controlled largely by, and for the benefit of, Republican and Conservative party insiders.
The latest inquiry is the result of a false claims lawsuit filed almost two years ago but just unsealed in February by a federal judge. The plaintiff is Michael Nolan, a former chief operating officer at OTB.
The lawsuit aims to hold OTB board members individually liable for approving expenditures that violate the state’s False Claims Act.
“We’re trying to recoup money that’s been stolen from the people,” Steve Cohen, Nolan’s attorney, told Investigative Post.
The lawsuit asks the court to make the board members pay “three times the amount of all damages incurred,” plus penalties between $6,000 and $12,000 for each misuse of public funds.
In his complaint, Nolan offers three examples of outside firms with connections that won OTB contracts due, he said, to their owners’ “close political connections” to the agency:
- Growth Marketing of Rochester, run by Arnie Rothschild, a close associate of OTB Chairman Richard Bianchi, was paid more than $1.1 million for advertising in 2018 and 2019, without a competitive bidding process.
- Richardson Management of Williamsville, run by Republican lobbyist Rick Winter — father of OTB board member Elliot Winter, a defendant in the lawsuit — was paid $126,000 for lobbying work between 2012 and 2016.
- Regency Communications of Lockport, run by Republican political operative Glenn Aronow, was paid $73,000 for “consulting services” between 2014 and 2017.
In 2019, Investigative Post reported the contracts with these three firms had caught the interest of the FBI, while Nolan was still working for OTB.
In all, Investigative Post has published more than two dozen stories about the agency’s management in the past six years, reporting in detail on the allegations raised in the lawsuit, as well as investigations by the state comptroller and the Federal Bureau of Investigation.
The link to read the full Investigative Post article is: https://www.investigativepost.org/2023/05/30/lawsuit-seeks-millions-from-otb-officials/