By Associated Press
Buffalo, NY – A major hospitality company running the first "racino" in New York was ordered Friday by the state Lobbying Commission to explain an agreement that could provide "success fees" to a top Albany lobbyist, a possible violation of state law.
David Grandeau, executive director of the Lobbying Commission, said he wants answers from Delaware North Corp. and the lobbying firm headed by former state Republican Chairman William Powers.
"Contingency fees are illegal" under the state's lobbying law, Grandeau said.
"I think quite frankly, they were intending to do that ... If they ever agree on a contingency fee, it would be a misdemeanor," Grandeau said after The Associated Press asked him about the wording in a $10,000-a-month contract between Delaware North and the Albany-based Powers, Crane & Company lobbying-consulting firm.
A contingency fee is a payment made based on the outcome of a project.
A lawyer for the Powers firm and a spokeswoman for Delaware North said the companies were doing nothing wrong and that they would cooperate fully with the Lobbying Commission.
James Crane, an Albany attorney representing the Powers firm, said no agreements for contingency fees had been reached and that any that were agreed to later would only be for non-lobbying activities.
Wendy Watkins, a spokeswoman for Delaware North, said company lawyers had told her "they are very confident we are not in violation of any state lobbying law."
In late January, a "racino" with slot machine-like video lottery terminals opened at the Saratoga Raceway, a harness track in Saratoga Springs north of Albany. The Delaware North-managed facility became the first of eight such sites authorized by the state last May.
Such racinos are being installed at horse racing tracks across the state.
Last month, another facility opened at the Delaware North-owned Finger Lakes Racetrack and next week a Delaware North-managed racino is opening at the Buffalo Raceway.
The Delaware North contract with Powers, Crane -- besides the $10,000 monthly retainer -- calls for discussions on each project handled by the Powers firm to "determine if a success fee is to be paid ... for that project. The amount and terms of payment of such success fees shall be negotiated in good faith."
"We're going to call them in and say, 'Look, you guys, you can't have a contingent fee. What are you trying to do here?'" Grandeau said.