Backers bail on slots plot at Aqueduct

[clevfan]

Backers bail on slots plot at Aqueduct

By FREDRIC U. DICKER in Albany and CARL CAMPANILE in NY
NY POST
Last Updated: 5:06 AM, March 10, 2010



AEG's bid to run video slots at Aqueduct looked ready to be put down yesterday.

Queens minister Floyd Flake and rapper Jay-Z bailed out as key local partners in the Aqueduct Entertainment Group, while Gov. Paterson's office threatened to kill the deal.

"The deal is circling the drain. It's on its way to being dead," an insider told The Post.

State and federal authorities are probing accusations that the selection of AEG was rife with corruption and favoritism.

Flake's backing-out came just hours after NYPost.com broke a story that Paterson's senior advisers -- in a letter to AEG -- vowed to disqualify the winning bidder for failing to submit all of its investors to rigorous background checks to obtain a gaming license. The deadline to comply was yesterday.

The license review includes a criminal-background check and examination of five years' worth of tax returns -- including spousal income. It also includes a rigorous look at all other business dealings and associates.

Although Flake and Jay-Z were named as investors, neither applied for the gaming license and never submitted to pre-screening by the state.

Sources said Flake and Jay-Z may have been concerned about the extensive prying into their finances and associations.

Flake also has gotten heat from his church community for his role in the gambling project. Even his wife, Elaine, also a minister at Allen Cathedral in Jamaica, had misgivings, a confidante said.

"If Lottery [Division] does not receive such information by said deadline, the [Governor's Office] will withdraw its support for AEG," Paterson's senior aides Larry Schwartz and Peter Kiernan told AEG Chairman Richard Mays in the March 5 letter.

AEG insisted later in the day that its bid was in compliance, but Paterson's office would not comment on its status. Paterson said the Lottery Division is reviewing whether AEG's latest submission complies with the license requirements.

Meanwhile, in a bizarre turn of events, Paterson said that on the advice of his lawyer, he was recusing himself from any further matters involving AEG.

"I'd rather not talk about that -- but it had nothing to do with the process or my role," Paterson said.