Harsh words for costly OTB buyouts (Niagara Gazette)

CHEEKTOWAGA — “Egregious.”

“Self-dealing.”

“Corrupt.”

A trio of local Democratic officials used those terms and a few other choice words on Friday to describe contractual buyouts for three outgoing executives that will come at a combined cost to Western Regional Off-Track Betting Corp. of more than $500,000.

During a press conference outside the OTB branch on Clinton Street in Cheektowaga, State Assemblywoman Monica Wallace, D-Lancaster, assailed the six-figure buyouts as “sweetheart” deals that are “wholly unnecessary.”

Joining her in criticizing the deals were fellow Democrats, state Sen. Sean Ryan of Buffalo and Erie County Comptroller Kevin Hardwick, who called on OTB’s board of directors to rescind the agreements during the agency’s next scheduled board meeting.

“They are paying their top executives not to work for a year,” Ryan said. “Who gets that benefit when they leave a job or get fired? I’m sure every Western New Yorker would like to have that benefit.”

Wallace, Ryan and Hardwick said they believed the money in question would be better returned for use by the 15 local counties and two cities that are supposed to benefit from the agency’s profits.

“Let’s be clear,” Wallace said, “OTB is set up for the benefit of the local taxpayers. It is a public benefit corporation and it is tasked with operating for the benefit of the public. What that means is money from OTB operations is supposed to be returned to taxpayers.”

All three Democratic officials also suggested the deals run counter to the state’s Severance Pay Limitation Act, a piece of legislation sponsored by Wallace and supported by Ryan that limits severance for outgoing employees of some public authorities to no more than three months’ pay.

Wallace, in comments to Investigative Post last week, called the buyouts “blatantly illegal” and said she would ask Attorney General Letitia James to investigate the matter. On Friday, she said she has not yet done so.

In response to Wallace’s criticism, OTB last week had its outside counsel, Buffalo attorney Terry Connors, issue an opinion to board members that suggested the severance limit does not apply to OTB. Connors argued the agency is not among those specifically covered under the legislation.

Wallace on Friday countered: “I know as the author of the legislation it was intended to cover OTB and every single authority in New York State.”

She said it remains to be seen if Connors’ opinion would hold up in court. For now, she said, it’s clear OTB’s board violated not only the spirit of the law but also their “fiduciary responsibility” as members of a board representing a public entity to protect the public’s best interests.

“Instead of worrying about taxpayers, OTB board members and executives are treating this entity like their personal piggy bank,” she said.

Asked Friday what she might do if OTB’s board rejects the request to rescind the deals, Wallace said: “We’ll cross that bridge when we come to it.”

In response to the criticism, OTB issued a statement saying that the agency is “confident,” based on “multiple legal opinions,” that the severance and compensation packages are “appropriate and legal.”

“From the OTB Board of Director’s point of view, this matter is decided and closed,” said OTB Chairman Dennis Bassett in the statement issued by the agency. “We have now shifted toward finding our new leadership team.”

In a 16-1 vote on June 27, OTB’s board agreed to authorize buyouts for three outgoing executives, including CEO and President Henry Wojtaszek. The lone “no” vote was cast by Erie County’s representative to the board, Tim Callan, who is the county’s deputy comptroller.

Under Wojtaszek’s deal, he is set to be paid a full year’s salary — $299,000 – when he leaves the job at the end of December. The board also authorized agreements with Chief Financial Officer Jacquelyne Leach, who will be paid half of her $244,000 salary as a severance when she leaves her job in early 2025 and Vice President of Administration William White, who will receive half of his $175,000 salary when he leaves later in the spring.

Wallace noted the combined cost of all three buyouts exceeds $500,000, an amount she said is more than the profit share returned to 12 of OTB’s 15 member counties. OTB has projected it will earn more than $80 million this year and distribute nearly $10 million to the member municipalities, which include Buffalo and Rochester in addition to the 15 counties.

Wojtaszek’s pay places him among the highest-paid public officials in the state. The lawmakers noted he makes more than Gov. Kathy Hochul and Vice President Kamala Harris.

Ryan described Wojtaszek as the “king of corruption and controversy” and said he “just won’t quit” and wants to “take more tax dollars with him as he walks out the door.”

“He’s leaving at the end of the year and somehow he convinced the board to say ‘We’re just going to pay you for the whole year after you leave,’” Ryan said.

“It’s an outrage.”

In an interview on Monday, Bassett said he disagreed with the buyouts being characterized as “golden parachutes” and maintained the payments were part of the agency’s efforts to ensure it remains competitive in the regional gaming market.

“We are in a very competitive business environment,” Bassett said. “We may have some restrictions on us from a government perspective, but WROTB is fighting for our life to stay competitive. We’re not comparing ourselves to government and legislative (salaries), we are comparing ourselves to the business community and we reward success.”

Hardwick said when he thinks about running government more like a business, he thinks more about “efficiencies and economies” than “exorbitant salaries” and “golden parachutes.”

“It’s time for the gravy train, country club culture to end and it can’t end soon enough,” he said.

Ryan said the board’s actions on the buyouts are particularly troublesome, considering the agency has already came under fire for providing free health insurance to directors even despite opinions from both the state comptroller and the state attorney general suggesting the practice was illegal.

He noted that OTB was also the subject of an audit by the New York State Comptroller in 2019 that found higher-ups helped themselves and friends and family members to tickets to Buffalo Bills and Buffalo Sabres games and concerts, as well as food and drinks during the events, at a cost to the public of $121,000.

“Not only did they go to the events, they spent lavishly,” Ryan said. “They spent like they worked for the richest corporation in America, but it was all taken from taxpayers to do it.”

“These aren’t the actions of an organization that’s looking out for the public as beneficiaries,” Ryan added. “These are the actions of a corrupt, self-dealing corporation whose top people think the job is to make as much money as they can for themselves.”

Investigative Post reporter J. Dale Shoemaker contributed to this story.