A group closely allied with New York Gov. Andrew M. Cuomo received $2 million from gambling interests last December as he developed a proposal to expand casino gambling in the state.
Cuomo's support for expanded gambling, which he made a centerpiece of his State of the State address in January, had a profound impact. Within weeks, the Legislature endorsed a constitutional amendment that, if approved once more by lawmakers and then by voters, would allow for seven full-scale, privately owned casinos, potentially worth billions of dollars.
The contributions went to the Committee to Save New York, a business and labor coalition that raised $17 million and spent nearly $12 million in 2011, much of it on campaign-style television and radio advertisements praising Cuomo and advocating for his proposals to cap property taxes and slash state spending.
The New York Gaming Association, a trade group founded by Genting and other companies that operate racetracks and electronic slot machines, chipped in $2 million to the committee. Genting, a subsidiary of Southeast Asia's largest gambling company, gave an additional $400,000 to the group allied with Cuomo during 2011.
Founded by real estate developers and business executives at Cuomo's urging shortly after he was elected governor, the Committee to Save New York has rapidly become the biggest spender on lobbying in Albany, providing not only critical backing for Cuomo but also a counterweight to the labor unions whose money and political muscle have traditionally dominated the Capitol.
Cuomo, a Democrat, strongly disputed any suggestion that he was influenced by money from the gambling industry. He noted that he had expressed support for an expansion of casino gambling months before the contributions were made, and that he had diverged from the gaming association on several key issues.
To try to suggest an improper relationship between the governor and gaming interests is to distort the facts in a malicious or reckless manner, Richard Bamberger, a spokesman for the governor, said in an email.
The Committee to Save New York defended its fast-growing role in Albany.
From the inception of CSNY, we have focused on a reform agenda designed to help create jobs, improve the economy of our state and get state government working for the people again, said Michael McKeon, a spokesman for the committee. We are proud of our track record, and if there are people who felt they were getting something more for contributing to CSNY, then they are simply wrong.
Because it is organized as a nonprofit social advocacy group, called a 501©4, the Committee to Save New York is not required to disclose the sources of its money publicly. But The New York Times learned some details of the group's financing through a review of public records and interviews with more than two dozen individuals familiar with the group's activities.
The $2 million from the gaming association appears to have been the committee's second largest contribution in 2011, according to a tax return released by the committee last month, which included information on donation amounts but did not identify donors.
The group's single largest donor was another business advocacy organization, the Partnership for New York City, which gave just over $3 million.
Two companies that belong to the Partnership for New York City also contributed to the Committee to Save New York: Citigroup and JPMorgan Chase, each of which contributed $25,000.
Other major donors to the Committee to Save New York, according to people with knowledge of the group's finances, come from New York's real estate industry: Brookfield Properties, the Durst Organization, and Newmark Knight Frank.
There are no gambling companies or casino executives among the committee's more than 30 advisory board members and partner organizations. Nor was casino gambling high on Cuomo's agenda when he ran for governor in 2010.
Cuomo took some steps toward formulating a position as early as June 2011, when he charged an aide with developing a statewide gambling plan. He suggested in August that he was open to legalization of full-scale, private casinos.
There are already five Indian-run casinos in New York, all of them upstate. There is also limited electronic gambling, but no table games with dealers, at so-called racinos located at nine racetracks, represented by the New York Gaming Association.
An official with the association said that it had contributed $1.5 million to the Committee to Save New York on Dec. 1 and $500,000 on Dec. 6. Around the same time, Cuomo unambiguously took the gambling industry's side, writing a newspaper op-ed article on Dec. 4 saying that he favored expanded casino gambling in New York. Within days, the Committee to Save New York also adopted the issue, adding legalized gambling to its list of priorities for the 2011 legislative session.
In his State of the State speech in January, Cuomo raised the stakes further, calling for the constitutional amendment to legalize casino gambling and proposing to transform Genting's planned resort near Aqueduct into a destination casino resort that would include the nation's largest convention center.
This is not about chips and cards, he said in the speech. This is about the jobs that the casino industry generates.
Cuomo and his aides defended the Genting project for months, publicly dismissing worries that the proposed site in New York City was too remote and concerns that the administration had settled on a developer too quickly.
But on Friday, Cuomo said that the deal with Genting had fallen through. And at a news conference at the Capitol on Monday, he distanced himself from the racing association as well, telling reporters he was opposed to giving operators of existing racetracks a preference for future casino licenses.
The current racinos are going to argue, they currently argue, that the selection should be limited to the current racinos, Cuomo said. I 100 percent oppose that.
Political giving by casino interests has exploded in recent years. This year, gambling companies, casinos and Indian tribes with gambling concerns have given close to $20 million to federal candidates, according to the Center for Responsive Politics.
Gambling companies have long had their eye on New York, potentially one of the most lucrative markets in the country because of the high population density and relatively high personal income levels.
Gambling companies have argued for years that New York loses billions of dollars a year to casinos in Connecticut and New Jersey, costing the state jobs and tax revenue. But the state's constitution prohibits casino gambling, and efforts in the past to legalize it beyond tribal reservations have failed.
Two years ago, Genting won a lucrative concession to install 4,500 video slot machines at Aqueduct, the anchor of what the company hoped would become a full-scale luxury casino. Beginning in 2011, Genting made a full-scale push in Albany to permit private casinos, organizing the New York Gaming Association with other gambling companies and hiring well-connected lobbyists and advocates, including several close to Cuomo.
Genting and the association considered a major advertising campaign to back their efforts. But, according to two people with knowledge of the discussions, the Cuomo administration encouraged the companies to contribute to the committee instead, effectively putting the gambling industry's cash behind the committee's promotion of Cuomo's agenda.
The administration had very clear ideas of how they wanted to see this progress and made it clear to us, said Timothy Rooney, Jr., the general counsel at Empire City Raceway, a Yonkers casino that is a member of the association. I think we agree with a lot of the governor's initiatives, Rooney added. If that's the vehicle for supporting them, it makes sense.
Some donors to the Committee to Save New York said they had urged Cuomo to pursue legalized gambling.
Jeffrey R. Gural, the chairman of Newmark Knight Frank and the owner of two upstate racinos that are members of the New York Gaming Association, said he had contributed about $200,000 last year to the committee, chiefly because he supported Cuomo's agenda and shared the governor's view that public employees unions had grown too powerful in Albany.
The business community never counted for anything, Gural said. All anyone ever saw was the ads about why the governor shouldn't cut this and cut that.
But Gural said that he also viewed expanded casino gambling as an important initiative for New York.
I told him, `Andrew, it will create a lot of jobs, Gural said. We're surrounded by casinos everyone has them, but we have racinos. Upstate needs jobs desperately.