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link: https://www.timesunion.com/state/article/Overlaps-between-Hochul-and-husband-s-firm-bring-17051411.php
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Hochul's husband's company could benefit from new Bills stadium
Governor's recusals note her husband is removed from any dealings with
New York
Chris Bragg
April 4, 2022
Updated: April 4, 2022 6:55 a.m.
ALBANY — Gov. Kathy Hochul's recent announcement that funding for a new Buffalo Bills stadium included $418 million secured from the Seneca Nation brought immediate rebuke from the nation's president, who cast it as a "sweetheart deal" for the company that employs Hochul's husband.
Matthew Pagels, president of Seneca Nation, also noted that to secure the funds, Hochul's administration had briefly crippled the nation when her administration issued subpoenas freezing their key banking assets in order to leverage the payment to the state.
Hochul's office denies there was a conflict of interest involving the new stadium deal and her husband's role with Delaware North, a global hospitality and and food service company. But questions about that connection may continue, and lobbying records indicate another emerging issue involving the Seneca Nation.
Late last year, a top Albany lobbying firm, Dickinson & Avella, reported lobbying four top state budget officials — including state budget director Robert Mujica — on behalf of Delaware North. The topic was the "Seneca Nation Compact," according to state records.
The Seneca Nation Compact is a contentious 2002 agreement in which the nation agreed to pay substantial casino revenue to New York; it was that deal which Hochul succeeded in enforcing last week to secure $564 million from the Senecas.
A Division of Budget spokesman, Shams Tarek, said that the discussion with Dickinson & Avella was a "completely unrelated matter" to Hochul's securing the more than half a billion dollars.
Instead, in the the discussions with Hochul's administration, Delaware North was trying to shape certain aspects of a new gambling compact between the Seneca Nation and New York — an agreement that Hochul could well be charged with signing.
Delaware North and the Seneca Nation are fierce competitors over gambling customers in western New York, where the nation operates three casinos. The Seneca Nation contends that Delaware North is improperly allowed by the state to operate two gambling parlors in its "exclusive" gaming zone, which was created under the 2002 agreement: one near Buffalo and one in Farmington.
Late last year, according to the Division of Budget, Delaware North was pressing for "changes to operational restrictions placed upon them by the Seneca Compact," which expires in December 2023.
The original 2002 agreement was signed between then-Gov. George E. Pataki and the Seneca Nation. In January, Hochul said in a statement that she looked "forward to beginning discussions toward a new compact."
If a new compact is not reached by the end of next year, the three Seneca Nation casinos would not be allowed to operate. But Hochul could sign off on a new deal before then, including before she potentially wins a new term of office this year.
Asked about the emerging potential conflict of interest, Hochul's press secretary, Hazel Crampton-Hays, on Sunday said that the governor's counsel would "conduct a legal analysis of the circumstances to ensure compliance with recusal policies and applicable law."
The Seneca Nation's president noted that the state's discussions with Delaware North on how to potentially "further devalue the Seneca Nation's exclusivity" had occurred even before the Hochul administration had "substantive compact discussions with us, and months before the state extorted hundreds of millions of dollars from our nation."
Records also show that earlier this year, Dickinson & Avella lobbied the executive director of the state Gaming Commission, Robert Williams, about the "Seneca Nation Compact" on behalf of Delaware North.
Delaware North and Dickinson & Avella did not respond to requests for comment.
Recusal agreement
William Hochul is Delaware North's highly paid senior vice president, general counsel and secretary. In 2020, he made between $450,000 and $550,000 in salary from the company, according to the governor's financial disclosure statement.
After initial controversy arose about potential conflicts of interest, the governor's office in late October released recusal letters signed by the governor.
Hochul’s declarations include that she will recuse herself "to the greatest extent permitted by law" concerning Delaware North and its lobbying interests reflected in any disclosures filed with the Joint Commission on Public Ethics.
Hochul also agreed to recuse herself from any matter having a “direct, foreseeable and proximate impact” benefiting Delaware North. And the major Buffalo Bills' stadium deal, which Hochul announced last Monday, presents another possible conflict that critics of the deal have seized upon.
Delaware North has operated lucrative concessions, premium dining and retail services at the Bills’ Highmark Stadium since 1992. If the company holds the contract at the new stadium, it could prove to be a windfall, especially with increased services that could include additional luxury suites and restaurant services.
Hochul's office says any Delaware North interest in the stadium deal is merely "speculative and indirect."
“Gov. Hochul is committed to the strictest ethical standards and restoring trust in government," Crampton-Hays said. "Delaware North is not a party to the negotiations and any future decisions about vendors at the new stadium would be made by the Bills alone."
Delaware North's concessions contract expires at the end of the year, according to the Bills, and the services will be subject to competitive bidding by the team, which is owned by the Pegula family and could be won by Delaware North or another company.
Delaware North has said William Hochul was not involved in the stadium negotiations, and Hochul's office says he is recused from all of the company's state business activities and can't receive any incentive-based compensation based on Delaware North's business operations in New York.
John Kaehny, executive director of the good-government group Reinvent Albany, said it's difficult to understand from the outside whether Hochul is following the recusal agreements, since it's not being verified by a third party.
"They're not publicly putting out the instances where there was a recusal, why an issue was raised, or how they dealt with any issues," Kaehny said.
Nate McMurray, a former assistant general counsel at Delaware North, worked at the company for six years before leaving on unpleasant terms in 2020. He sued Delaware North and is in the midst of litigation with the company.
McMurray said Hochul’s agreement to have the stadium in suburban Orchard Park — rather than downtown Buffalo — would be a major boon for concession sales.
Like an airport or amusement park, having the stadium in isolation gives the Bills a "controlled environment" to charge inflated prices for concessions, he said. If the stadium is built in downtown Buffalo, that would force the stadium to compete with restaurants and bars for customers.
"Money that is generated by sales in the stadium is so important to the Pegulas, and they work hand-in-hand with the Jacobs family (that owns Delaware North) to maximize profit," McMurray said. "They’re getting a monopoly. The last thing they want is competition from the outside. They want people to go there and tailgate there."
The NAACP Buffalo branch also said that the stadium should be built in downtown Buffalo. Its president, Mark E. Blue, said the decision to place it outside of the city can be viewed as a sign of indifference toward "racial and socioeconomic justice and equity."
Hochul's office points to a state-commissioned study with the firm AECOM that was released in November. The study found that a stadium in downtown Buffalo would cost at least $350 million more than in Orchard Park, face significant delays and displace about 3,000 residents.
"I've made it clear to the Buffalo Bills organization that we wanted to accommodate both options and let them see the cost of downtown and Orchard Park, but not putting our finger on the scale," Hochul said in December. "If their desire is Orchard Park, it's Orchard Park. We've never said otherwise."
"Sean sparks like John Starks, nah, Sean ball like John Wall" - Rest In Power Forever Sean Price.
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