Spitzer at the Clubhouse Turn

Neil Getnick, a former assistant district attorney of New York County, has made a fortune spinning whistle-blower laws such as the False Claims Act and the Racketeer Influenced and Corrupt Organizations law into litigating gold. Now, as he’s poised to collect millions of dollars as special counsel to the New York Racing Association, Mr. Getnick is getting the whistle blown at him.Private bidders competing for the state racing franchise are lining up against Mr. Getnick, alleging that he parlayed his position as an independent, court-appointed monitor of NYRA into a lucrative business relationship.Along the way, critics say, Mr. Getnick evolved from being a neutral compliance officer, hired by a federal court to ensure NYRA complied with its deferred prosecution agreement, into a booster, playing an instrumental role in securing support for NYRA from the Spitzer administration and derailing the bids of those who seek to privatize racing.On July 10, NYRA notified the racing and wagering board that it had retained the services of Getnick & Getnick as special counsel to assess and report on its business practices at a minimum fee of $125,000 a month for five years. The no-bid contract hinges on NYRA being awarded an extension of its franchise to operate the Saratoga, Aqueduct, and Belmont racetracks.To detractors of NYRA, the contract casts a shadow on Mr. Getnick’s monitorship and raises questions about his repeated assertions that NYRA has abandoned its corrupt ways. It raises questions about Mr. Getnick’s own established code of ethics that forbids independent private inspectors general from using an assignment to nurture a professional relationship.Senate Republicans are planning to hold hearings to examine the contract. Here’s what they should be asking: Why did Mr. Getnick not make public the fact that in 1993, NYRA trustees sought the opinion of counsel regarding the legality of dipping into Horsemen’s Account funds — money belonging to owners and training from their deposits and purse winnings — to pay for operating expenses?I hear that the firm hired to give the opinion warned NYRA that using those funds was like a lawyer dipping into an escrow account. That NYRA apparently ignored the advice of counsel for more than a decade and drained more than $13 million from the horsemen’s pot would seem to invite inquiry.More troubling is the fact that a number of the trustees of NYRA who sat on the board in 1993 are still part of its leadership. Was Mr. Getnick concerned about protecting NYRA from potential criminal liability when he urged it to sign a controversial simulcast contract with Television Games Network, which filled the horsemen’s coffers?Another question is why wasn’t the state inspector general, which conducted a more limited integrity review of NYRA than of other franchise bidders, aware that NYRA was close to clinching a deal with Mr. Getnick?The inspector general’s office of Governor Spitzer’s appointee, Kristine Hamann, released its integrity report on July 1, nine days before NYRA announced its contract with Mr. Getnick.The inspector general’s office’s insistence that it had no knowledge of the contract is even more troubling given that inspectors met with Mr. Getnick during the review process “to better understand the issues existing today regarding thoroughbred racing,” according to the office’s report.In an interview with The New York Sun, Mr. Getnick notes that the Democratic comptroller, Alan Hevesi, and the United States Attorney’s Office for the Eastern District of New York recommended his firm as NYRA’s court-appointed monitor after competitive vetting process involving more than 30 other firms.He also notes that federal prosecutors endorsed his final report and dismissed its indictment against NYRA based on his conclusions that the association “brought itself into conformity with the law” and was committed to ridding its tracks of criminality.Mr. Getnick disputes the charge that his contract with NYRA violates his own code of ethics.When he served as the monitor, NYRA was on life support and expected to lose its franchise. The possibility of working for the association two years later as its business integrity counsel wasn’t “in the cards,” he said. Moreover, he insists that the “the highest goal for the IPSIG is for the reformed organization to carry forward that program of reform after the monitorship has come to an end.”He argues that NYRA’s no-bid contract with his firm complies with racing law, which does not require a competitive bidding process for contracts of more than $250,000 when the contractor offers a “unique service.” It didn’t make sense for NYRA to competitively bid for a counsel when there “was only one former monitor that implemented” a reform program, he says.What most irritates him is the charge that he’s benefiting from a “sweetheart deal,” as the chairman of the Senate racing committee, William Larkin, calls it. After all, he said, he’s billing NYRA at a rate of $290 an hour, less than half of his standard rate for private integrity counseling services. Mr. Getnick points out that he represented a whistle-blower in a $251 million Medicaid fraud recovery in 2003, a highlight of his long, lucrative career in prosecuting fraud, the implicit suggestion being that he doesn’t need the money.“I would welcome the opportunity to appear before that committee and tell them what occurred in my own words and answer their questions under oath, fully,” he said. “If they are interested in getting the answer, they would want to put the person under oath who knows the answers to those questions.”Let’s hope he gets that chance. The Legislature cannot be expected to settle the franchise contest before it untangles the cozy relationships among the governor’s office, NYRA, and Mr. Getnick.As for the governor, he’s at the clubhouse turn. One might suggest that his administration, which is looking to justify its questionable decision to side with NYRA, has become attached to Mr. Getnick. His avowal of the transformation of the racing association well serves the governor’s self-serving interests.

Spitzer at the Clubhouse Turn

Spitzer at the Clubhouse Turn

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