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State asked to investigate Aqueduct gambling contract

Assembly Speaker Sheldon Silver Thursday asked the state inspector general to investigate a gambling contract awarded at the Aqueduct Racetrack in Queens, a development that could cripple the deal.

Silver (D-Manhattan) followed state Sen. Dean Skelos (R-Rockville Centre), who called for public hearings into the deal for 4,500 video slot machines at the track.

Silver asked Inspector General Joseph Fisch to review the bid-selection process, determine if the Lottery Division followed the law and assure that four conditions he laid out last week can still be met.

Meanwhile, Peter Kauffmann, a spokesman for Gov. David A. Paterson, said the governor would release "all documents germane to the selection process" by Tuesday. "There is nothing to hide, and all of these documents were shared with the legislative leaders during the selection process," Kauffmann said.

Jeffrey Levine, chief executive of Levine Builders and partner in Aqueduct Entertainment Group, released a statement Thursday night, saying: "We are confident that any review will find AEG was selected because our bid represented the best value for New York's taxpayers and the best plan for the residents of Queens."

The strikes against the Aqueduct deal come in the wake of published reports, and Paterson's subsequent denials, that the deal awarding a contract to Aqueduct Entertainment Group is being investigated by federal prosecutors. Paterson said the Manhattan U.S. attorney this week issued subpoenas seeking information about a Queens charity linked to state Senate President Malcolm Smith (D-St. Albans) and Rep. Gregory Meeks (D-Far Rockaway). "They subpoenaed the New York State Lottery, which is a licensing agency," Paterson said on WOR radio. "It has nothing to do with the bid process."

Under terms of a 2007 law, Paterson, Silver and Senate Democratic chief John Sampson (D-Brooklyn) all must agree on the video lottery terminal contract.

"The lack of transparency in the selection process only feeds the public's distrust that the proper procedures were followed," Skelos said.

Bennett Liebman, the coordinator of the Racing and Wagering Law Program at Albany Law School, said Silver's action Thursday muddles the deal.

"No one really knows anything," he said. "It's always been very difficult to read the speaker's motivations."

Silver spokesman Dan Weiller said the Assembly speaker is not necessarily walking away from the deal. He said Silver's agreement is contingent on AEG meeting four conditions, which the consortium has said it can do.

Liebman said that if the deal is going to be investigated, it should not be done by Fisch, a Paterson appointee.

"You're dealing with an appointed official of the governor," he said. "But where do you go? Obviously you can't go to the attorney general at this point."

A spokeswoman for the Manhattan U.S. attorney, citing policy, declined to confirm or deny the existence of the investigation.

With James T. Madore and Anthony M. DeStefano

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