The Western Regional Off-Track Betting Corporation today filed a formal complaint with the New York State Joint Commission on Public Ethics against Rochester developer David Flaum, the Seneca Nation of Indians, and the Seneca Gaming Corporation, accusing them of violations of the New York State Lobbying Act.
The complaint alleges that Flaum has engaged in unregistered lobbying activities and has accepted employment with a contingent-based fee from the Seneca Nation of Indians and the Seneca Gaming Corporation (SGC), which violates the New York State Lobbying Act.
In August, 2013, media reports indicated that Mr. Flaum and Flaum Rochester had contracted with the Seneca Nation and SGC to create a gambling and hospitality development in Henrietta, New York, in Monroe County.
According to the state, an individual engages in "lobbying activities" when he makes "any attempt to influence . . . the approval, disapproval, implementation or administration of tribal-state compacts, memoranda of understanding, or any other tribal-state agreements and any other state actions related to Class III gaming." A review of the website maintained by Joint Commission on Public Ethics (JCOPE) indicates that neither Flaum nor Flaum Rochester is a registered lobbyist.
"There is evidence strongly suggesting that Flaum and Flaum Rochester are lobbying on behalf of the Seneca Nation and the SGC," said Michael P. Nolan, Executive Vice President/COO of the Western Regional Off-Track Betting Corporation (WROTBC).
Nolan said OTB has a copy of the agreement listing signatory lines for the Nation, the SGC and Flaum. Not only does it say that Flaum Rochester will provide 'Liaison Services', which includes helping the Seneca Nation achieve either an amendment of the current Nation-State Gaming Compact or State approval of a new gaming compact, but it also states that Flaum Rochester may be required to represent the Seneca Nation’s interests before municipal, county, state, and any other governmental bodies to further the interest of the project.
"I think it’s clear that those responsibilities fall under the definition of lobbying," Nolan said.
Michael Kane, President of WROTBC, suggests that further evidence of a contingent-based fee arrangement exists between the Seneca Nation and Flaum.
"The agreement states that Flaum Rochester will be eligible to earn a Success Fee if a Compact Approval becomes effective, and that fee is as high as $5 million," Kane said. "This ‘Success Fee’, can only be considered the type of contingent-based fee rendered illegal by the Lobbying Act."
The Joint Commission on Public Ethics Commission was created to restore public trust in government by ensuring compliance with the State's ethics and lobbying laws, regulations, and guidance. The Commission administers the statutory filing program that discloses information concerning the identities, activities, and expenditures of those attempting to influence the governmental decision-making process in New York State on both state and local levels.
"We at Western Region OTB completely support the mission and objectives of JCOPE," Kane said. "We are asking them to investigate these allegations, and at the conclusion of their investigation, to send a swift and appropriate message that they will not tolerate any attempts to circumvent the laws of New York that have been instituted to stop the corruption and influence-peddling that have been so destructive to our state."