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SHAKING THE MONEY-MAKER: Cadillac health plans for a part-time board | Local News


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Service on the Western Regional Off-Track Betting Corporation board of directors is a strictly part-time arrangement. Members attend a single two-day meeting per month at Batavia Downs Gaming, with their overnight lodging and meals furnished at the racino hotel. Under New York law, compensation for board members is strictly capped at $4,000 per year, plus travel expenses. But for the members of the Batavia board, that’s just the beginning of what they receive.

According to the Buffalo-based Investigative Post, 13 of 17 current directors and three retired directors also receive health-care insurance through WROTB. These policies are among the most expensive on the market with annual premiums that can exceed $30,000 for a single director. They include full coverage for family members, no deductibles or co-pays, and free dental and vision care. Directors who stay on the board for 10 years, as many do, are allowed to carry their policy with them after they leave, for free.

One of the directors to receive those state-prohibited health plans is Niagara County’s appointed representative to the WROTB board, Elliot Winter. His father, Rick Winter, was the county’s board representative before him and also received the health plan.


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Documents that the agency was forced to disclose under the Freedom of Information Law put the premium value of all this coverage at more than $229,000 per year, but because those policies are augmented by other “self-insurance” payments that come directly from the agency, the current expense to taxpayers is more than $500,000 per year, according to Michael Nolan, the agency’s former chief operating officer.

But according to a formal opinion from New York’s Attorney General, those taxpayer-funded health plans are also illegal. In 2008 the Attorney General issued an opinion to another public off-track betting operation, on Long Island, and was unequivocal: “The board has no authority to offer health insurance benefits for or, more generally, to establish the compensation for its own members .” In other words, the rules of what compensation board members can receive are set by state law, not the whims of the board members who stand to benefit.

Lawyers hired at taxpayer expense to defend the board’s health plans insist that they are legal, citing a “non-binding opinion” issued by the New York Comptroller in 1978. But the board and agency know well that opinion (released in the same year as the movie Grease) has long been superseded by changes in state law and by the Comptroller’s office directly.

In an email earlier this week, the Comptroller’s office reiterated its long-standing position on the illegality of the OTB health plans: “The State Comptroller has repeatedly and unambiguously informed the OTB that the old 1978 opinion was directly repudiated by this office years ago. We urge the OTB to take appropriate action to recover improperly spent monies.”

Not so fortunate in matters of health coverage are the men and women who work to keep the agency running. They range from the janitors who sweep the floors of the Batavia casino to the attendants who staff the OTB betting parlors. In December I spoke with a half dozen of these workers, all members of the United Public Service Employees Union.

In contrast to the board members and their monthly meetings, OTB parlor workers commonly work 13-hour shifts, staffing operations that are open every day of the year except Christmas and Easter. It is not an easy job. One betting parlor in Buffalo was robbed at gunpoint last August. These workers asked me not to use their names, for fear of retaliation from management.

Unlike the part-time board members, those who work at the parlors do not get health coverage for their families. With a few grandfathered exceptions, they are offered a policy only for themselves. If they want a family plan they have to pay for it, but it would cost them $1,800 per month. In the agency’s current negotiations with the workers’ union, the board is also seeking reductions in that health coverage, citing the need to cut costs.

“They are trying to take away the benefits of employees who have been there for twenty-plus years,” Antonella Rotilio, their union representative, told me. “A lot of our members are really upset, because the board gets to keep their own health insurance.” One 20-year employee told me, “I could go to Mighty Taco if I wanted and make more than my regular wage, but I stay for the health insurance.”

Last year, as news of the Batavia board’s expensive health plans was making local headlines, the board tried to minimize the controversy by voting to eliminate health coverage for any new directors, while retaining it for themselves. In effect, the board recognized the legal issues involved, but decided to keep their coverage anyway. Siebert told a local paper that “no one raised an issue with it” until it became public.

COMING FRIDAY: The political fortress of Henry Wojtaszek.

ABOUT THIS SERIES

Batavia Downs Gaming, otherwise known as Western Regional Off-Track Betting (WROTB), is a public benefit corporation chartered under New York State law. It is owned collectively by 15 Western New York counties along with the cities of Buffalo and Rochester. Its operations include the Batavia horse racing track, casino and hotel, along with its network of more than two dozen betting parlors in the region. By law the profits it earns are supposed to be divided up among these local governments to help finance local services. It is run by a board of directors appointed by those same local governments.

Batavia Downs Gaming has also been the subject of a series of corruption allegations. These include illegal taxpayer-funded health plans for members of its board as well as the handout of expensive luxury box tickets to Buffalo Bills games and other events to board members and senior agency officials, also at taxpayer expense.

Local columnist Jim Shultz recently completed an in-depth, six-month investigation into these charges, including interviews with agency whistleblowers and others. In April he published a national article based on those investigations, A Study in American Kleptocracy, in the New York Review (where he is a contributing writer). This week the Niagara Gazette is publishing “Shaking The Money-Maker,” a four-part series by Shultz based on that same investigation. The series continues through the Weekend edition.

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