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A Study in American Kleptocracy

Jim Shultz
A public-owned agency that controls gaming in Western New York is supposed to fund local governments. Instead, a local elite has turned it into a master class in graft.
Betting slips and cash

Mario Tama/Getty Images

Betting slips and cash at an off-track gaming parlor in New York City, 2008

The Batavia Downs gambling complex spreads out like a giant fortress at the western edge of the small city of Batavia, New York. At its center is a half-mile-long oval horse-racing track, the brainchild of a 1930s era sports promoter named William “Lefty” Goldberg. He was a man who saw opportunity in mixing horses and betting in the middle of nowhere, halfway between the state’s second and third largest cities, Buffalo and Rochester. The Batavia Downs track opened in 1940 to a crowd of 2,500 people. Today, from July to early December, it still draws a steady following of spectators and gamblers.

In the years since the track opened, Batavia Downs has grown into a vast gambling empire. Its current operations now include a huge casino jammed with more than 850 brightly lit slot machine screens, an eighty-four-room hotel with four restaurants, and a dozen off-track betting parlors and more than two dozen “easy-bet” kiosks set up in local bars and restaurants across Western New York. These outposts give people the chance to bet in their own neighborhood on races from across the nation. By any measure, the Batavia Downs complex is a formidable money machine, generating revenue of around $50 million every year. Over the past five decades, it has reported taking in more than $6.4 billion in wagers and has kept more than $1 billion of that sum.

Batavia Downs is also ostensibly owned by the public. Since 1973, Batavia Downs and its various enterprises have been the property of Western Regional Off-Track Betting, a public benefit corporation chartered under New York law that belongs collectively to seventeen Western New York local governments, which share its profits. Such quasi-governmental entities are common nationwide. They run everything from toll bridges and power generating stations to public libraries and hospitals, and, in this case, a race track, a casino, and a network of betting parlors. In New York State in particular, they were pioneered by the master builder Robert Moses, who favored the idea of their relative independence from government oversight.

Thanks to that autonomy, though, Batavia Downs Gaming (also known as Off-Track Betting, or WROTB) has also been converted into a fortress of another kind. Inside its walls, the small band of people who run the agency have created a set of arrangements that now cream off at least a half-million dollars a year in dubious benefits for themselves. These range from opulent box seats for sporting events to gold-plated health plans for some of the agency’s board members.

Corruption in the public sphere is a corrosion that undermines people’s faith not only in government, but in democracy itself. Usually, however, when political corruption is in the news, the focus is on the high-end variety, in Washington or in state capitals, where a system of exchange of campaign contributions for political favors is already standard practice. Batavia Downs Gaming, in contrast, involves graft of the old-school variety, a master class in how a group of small-town political operatives have converted a public agency into their private dispensary of perks and privileges, which they also use to fend off demands for accountability.

Now, however, that carefully constructed fortress is under attack as never before and the question is: Will those barricades of old school corruption still hold?

The ardent fans of the Buffalo Bills are legendary for the harsh conditions they are willing to endure to cheer on their beloved team. Neither blizzards nor bone-chilling cold can keep them away. For the Bills’ playoff game against the New England Patriots this past January, a packed stadium of regular spectators sat through three hours of football at temperatures of 4 degrees, with a wind chill well below zero.

The executives and board members of Batavia Downs Gaming, along with their families and political friends, do not have to suffer such hardship. According to an audit released last fall by the New York State Comptroller, Thomas P. DiNapoli, the agency spent more than $1.3 million for heated luxury boxes and thousands of tickets to Bills games, together with Buffalo Sabres hockey games and other expensive events in less than two years.

That $1.3 million for luxury seats is just one of the expenditures tucked into the agency’s annual marketing budget of $5.8 million—an amount that is double what the agency passes on each year as income to the local governments that own it. In theory, the marketing purpose is to lure gamblers with rewards to return to the Batavia casino and gamble more: make a bet and win a chance to watch the Bills play from a luxury box. But according to the Comptroller, the agency did not keep complete records of who received a good portion of those tickets, and at least $120,000-worth did not go to gambling customers but to others, including many to agency board members, executives, and their families and friends.

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Michael Nolan, a former volunteer firefighter and town supervisor in Elma, New York, joined the executive team at Batavia Downs Gaming in 2011, and served as its chief operating officer from 2016 to 2020. He was on the receiving end of insiders’ requests for those tickets. “I would have board members calling me to ask for eight tickets to take their grandkids and their kids,” he told me.

“Board members would just ask, ‘Hey, do you have any tickets for Sunday’s Bills game,’” said Phil Barnes, a retired sheriff deputy and a board member representing Schuyler County, “and they would get tickets.” One recipient was Richard Bianchi, chairman of the board of directors and a long-time member. According to the Comptroller’s audit, Bianchi seemed a particular fan of hockey and of taxpayer-funded drinks and refreshments. In November 2018, Bianchi asked the marketing office for six tickets to see the Buffalo Sabers, an outing that ran up a $1,300 tab for snacks and drinks. The next month, he asked for four Sabers box tickets for a gathering that cost $1,800 in food and alcohol.

Nolan told me that another board member who made use of the luxury boxes is Richard Siebert, Genesee County’s representative on the board for nearly thirty years. He said that Seibert’s requests included seats for himself and his grandchildren. When news of the luxury box giveaways broke, upon release of the Comptroller’s audit, Siebert offered a novel explanation in a local media interview. He insisted that board members and executives who use the luxury boxes are there effectively on janitorial duty, just to keep things tidy for the gamblers who win seats. “The host has to make sure it’s clean,” he said. “They have to make sure the food is served…we have to have staff members at every single event to do the housekeeping.”

In fact, the luxury boxes for Bills games come complete with attendants to serve the food and drinks, as well as VIP parking passes, special entrances to the stadium, heating and private bathrooms. Those boxes  cost between $6,000 and $20,000 per game to rent. It seems unlikely that the stadium expects these high-end clients to take on cleaning duties as well. Comptroller DiNapoli said, after his office’s audit, “Revenues from the OTB are supposed to go to participating municipalities, not to give board members and employees generous perks and other benefits.”

Free luxury tickets to sporting events, however, are not the most lucrative reward that those who oversee Batavia Downs Gaming give themselves. Service on the agency’s board is a strictly part-time arrangement: members attend a single two-day meeting per month at the track, with their overnight lodging and meals furnished at the casino 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, which has been digging into the agency’s affairs for more than four years, thirteen (of seventeen) current board members and three retired members also receive health-care insurance through Batavia Downs Gaming. The benefits of these policies, among the most expensive on the market with annual premiums that can exceed $30,000, include full coverage for their family members, no deductibles or co-pays, and free dental and vision care. Those who stay on the board for ten years, as many do, are allowed to carry their policy with them after they leave, for free. The combined premium value of all this coverage totals more than $229,000 per year, but because those policies are augmented by other “self-insurance” payments that come directly from the agency, the actual expense to taxpayers is more than $500,000 per year, according to Nolan.

In 2008, another public off-track betting operation, on Long Island, asked the New York attorney general for an opinion on whether the agency could offer health coverage to its board members. The response 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 short, the rules of compensation are set by state law, not the whims of the board members who stand to benefit.

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

In contrast to the board members and their monthly meetings, off-track betting parlor workers commonly work thirteen-hour shifts, staffing operations that are open every day of the year except Christmas and Easter. It is not an easy job, and security is also a concern: 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.

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Unlike 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,” said Nolan. 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 twenty-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 members, while retaining it for themselves. Siebert told a local paper that “no one raised an issue with it” until it became public, which he blamed on politicking.

*

Politics is involved, but not in the way Siebert meant. The man at the center of Batavia Downs Gaming is its president and chief executive, Henry F. Wojtaszek. Wojtaszek has worked in the executive office of the agency since 2010, first as its general counsel and, since 2016, also in the top job. He is, by reputation, both charming and clever. “He could sell the Brooklyn Bridge to somebody if he wanted,” Barnes, the Schuyler County board member, told me.

Wojtaszek’s path to his roughly $200,000 per year post runs through the close-knit world of the Western New York Republican Party, as is the case with many of those overseeing the agency. He began his career as the city attorney of the small Buffalo suburb where he grew up. He later advanced to become the powerful chairman of the Niagara County Republican Party, and the junior partner in a legendary Western New York political machine, led by State Senator George Maziarz. Wojtaszek is also half of a well-known power couple in Western New York: his wife, Caroline, served for three years as Niagara County’s elected district attorney and in 2020 was voted in as a county judge.

“Henry’s paws are as deep as you can get into politics,” said Nolan, who served under Wojtaszek for nine years. For years, Wojtaszek and Maziarz cultivated a vast web of allies and favors until the two had a spectacular public falling-out in 2018 after both came under investigation by the New York attorney general on political corruption charges. Wojtaszek agreed to testify against his former mentor and was later allowed to plead guilty to a single campaign finance charge that came with a fine of $1,000. The scandal eventually pushed Maziarz to abandon the senate seat he had held for twenty years.

Under proper circumstances, the oversight of a public benefit agency’s CEO would come from its board of directors. But luxury box seats and opulent health plans can buy a good deal of slippage in real scrutiny. In Wojtaszek’s case, there is much he might wish the board to overlook.

Aside from ready access to sporting event seats for his friends, Wojtaszek has discovered other ways to divert agency resources into his own pockets. The 2021 State Comptroller audit found that he had used an agency car for years without keeping track of his personal use, as well as an agency phone. After his car use was uncovered he reimbursed the agency $3,484 in restitution. But the more substantial benefit Wojtaszek has secured is the use of the agency’s considerable contracting power to give lucrative work to close partisan allies.

One of those contracts went to a Republican political operative named Glenn Aronow. In 2012, Aronow lost his job as a staffer in the New York Senate when he was charged with sexual harassment of another legislative employee, an accusation he has consistently denied. Eventually, taxpayers were forced to pay out a $90,000 settlement to his accuser. After his dismissal from Albany, Aronow found a safety net doing public relations at Batavia Downs under Wojtaszek. “We hired him on a contract basis…and paid him $73,000,” said Nolan. Another GOP operative closely linked to Wojtaszek, Rick Winter, was awarded a contract worth more than $120,000 on leaving the agency’s board, according to Nolan, to lobby state lawmakers on the agency’s behalf. Soon after Winter’s departure from the board, Republican legislators in Niagara County bequeathed his lucrative seat to his son, Elliot Winter. When I sought comment on the allegation of political favoritism, an agency spokesman, Ryan Hasenauer, insisted that everyone employed by Batavia Downs Gaming is hired “because they are deemed the best person for the job.”

These were just a few of the taxpayer-funded contracting deals that Wojtaszek funneled to his GOP friends. Barnes, who is himself a Republican, told me: “I quickly learned that the OTB is nothing more than political appointments.” I heard the same from Dennis Virtuoso, a twenty-year veteran of the Niagara County Legislature.

“It is actually a money-maker for the Republican Party, and a patronage thing,” he said. Virtuoso, a Democrat who retired from the legislature earlier this year, also said that Wojtaszek regularly directs Batavia Downs Gaming business to local vendors who support his chosen local candidates. “Take care of your friends, that’s how you stay in power,” he told me.

Doing so, though, requires the board to look the other way. According to both Barnes and Nolan, defending the health plans in particular has been central to maintaining board members’ loyalty to Wojtaszek and Bianchi, and their selective blindness. “They knew they weren’t supposed to have the insurance, though they may say different,” Nolan told me. “Henry would just tell them everything they wanted to hear and the board just kept everything in place so they could keep their insurance.”

In 2018, the Investigative Post confronted Wojtaszek with the attorney general opinion calling the board health plans illegal. After claiming that he was unaware of the legal advice, he defended the health plans: “The benefits they [board members] receive are hard-earned and well-deserved.” He went on to argue that the ruling does not apply to the Batavia Downs Gaming board because it was issued for a different public off-track betting agency. Finally, he said he would seek an attorney general opinion specifically for his agency, which he never did. Wojtaszek’s spokesman told me in an email that the agency is currently “engaged with the Attorney General’s office” on the issue.

In February 2019, the issue of the health plans came to a head, thanks to an attack from an unexpected source, Wojtaszek’s jilted political mentor, former Senator Maziarz. In an angry, televised news conference, Maziarz laid his own set of corruption charges against Wojtaszek and Batavia Downs Gaming.

“It happened to be a board meeting time and we watched Maziarz go after everything—and the insurance was a big factor,” said Barnes. He told me that the chairman, Bianchi, was out of town at the time; with both him and Wojtaszek absent, the other members of the board decided to finally exercise some oversight. “We didn’t trust the opinions we’d been getting,” Barnes explained. “The board directed Mike Nolan and me to get an independent attorney’s opinion.” In other words, an opinion from outside Western New York and Wojtaszek’s sphere of influence.

The two reached out to a former prosecutor in Albany, and to a law firm in Syracuse, Barclay Damon, which specializes in state and federal rules, and fraud. “The opinion spelled out very clearly that the board should not have health insurance,” said Nolan, “and if they continued, could most likely be liable for payback.”

The meeting that heard the opinion delivered was on a Thursday the next month. The following Monday morning, Bianchi called the executive staff into his office to issue new orders. Nolan recounted to me what the board chairman said. “‘We need to be a team. You keep this up and the Gaming Commission is going to be after us. People are going to come after us,’” he said, according to Nolan, who added, “From that point on, I was ostracized.”

Bianchi and Wojtaszek immediately stripped him of his duties, both as the agency’s freedom of information officer, which cut off his ability to share information with outside groups, and as its procurement officer, “to keep me from seeing the contracts,” he explained.

After the conflict over the health plans exploded within the agency, Barnes said he started to question other things about Wojtaszek’s and Bianchi’s activities, especially the contracts handed out to their political friends. “I couldn’t understand why we were paying all these lobbyists,” he said. “We were paying out horrendous amounts. Some of it was $200,000 per year, some of it was $50,000 per year.” That’s when the retired lawman decided to take matters further: “I’m the one who called the FBI, and I’m proud of it.”

*

In theory, when the staff and board of a public agency are so deeply compromised by conflicts of interest and misdealings, one might expect the local governments that own the agency to take some corrective action. It is, after all, those local governments—which, in this case, include the municipalities of Rochester and Buffalo and fifteen western counties, that appoint the board and share the agency’s revenue. But there, as well, Wojtaszek had constructed some powerful defenses, nowhere more than in Niagara County, his home turf.

In 2019, as more allegations and evidence surfaced about corruption within Batavia Downs Gaming, Republican county legislators moved to protect their former party chairman. A resolution calling for the state to audit the agency was batted down on a party-line vote. One GOP legislator, John Syracuse, called it a witch hunt. “I just want to encourage you to continue on with what you’re doing,” he said, addressing Wojtaszek. Even after the State Comptroller’s audit was complete, with its report of financial malfeasance, Republican legislators buried another resolution, which called for the replacement of Wojtaszek and the county’s board representative.

“Henry [Wojtaszek] can call a party committee member and say, ‘Hey, you want to go to the Bills game. We’ve got a suite. You want to sit in a suite?” explained Virtuoso, the former county legislator. “Henry is the king. If they don’t do what Henry says, they’re going to get primaried.”

Today, though, the fortress of political patronage around the gambling empire is under assault from multiple sides at once. FBI investigators continued as recently as March to interview corruption witnesses (though, as is the agency’s standard procedure, declined to comment on the status of their investigation). The State Comptroller is reportedly working on an additional audit of the agency, but also won’t comment on the record.

Nolan, first frozen out, was then, in December 2020, summarily fired after he cooperated with FBI investigators. He later filed a multimillion-dollar suit against Batavia Downs Gaming. In a statement, the agency maintained Nolan’s dismissal was “100 percent performance related.” Nolan told me his performance reviews over the nine years he worked there were exemplary, up until the moment he raised issues about the legality of board members’ health plans and when Wojtaszek and Bianchi learned that he had spoken with the FBI.

In January, the agency’s leaders were hit with news of a package of state bills introduced by Senator Tim Kennedy, a Democrat from Buffalo, that would completely overhaul the makeup of the board. If this legislation passes in Albany, it would diminish the board representation of the small Republican counties that make up Wojtaszek’s power base and increase the board seats allotted to the more populous Democratic counties and cities, as well as award board appointments to the governor, senate, and assembly.

Casting this effort as a party power grab, the agency has lawyered up and issued new lobbying contracts, this time to Albany operatives with strong connections to both parties, costing taxpayers nearly $30,000 per month.

As I investigated the story of Batavia Downs Gaming over the past months, I was reminded of something I heard once from an anticorruption activist in Uganda: “Sometimes our public officials are confused between what is their money and what is the people’s money.” The same could be said of those who have taken charge of the publicly owned gambling enterprise in Western New York.  

In a 2020 Pew Research poll, nearly three quarters of respondents said that they did not believe elected US officials face any serious consequences for corrupt conduct. What does it actually take to bring accountability into the dark corners where public corruption thrives? What will it take to finally bring accountability to Batavia Downs Gaming?

It may well be that those who have benefited from all this misdealing have met their match at last in the powerful combination of state audits, FBI investigation, whistleblower testimony, and legislative efforts to clean house. The machinery of accountability may at last be kicking in to do that neglected job. But this is by no means guaranteed.

If the carefully constructed political ramparts guarding the Batavia Downs fortress really do crumble, it will be because the arrogant entitlement of those who run it will have become too grossly apparent to hide from public view. The citizens of New York will have had enough and accountability will follow. If that can happen here, where graft of the old-school variety is so deeply embedded, it might offer a guide to how it can be fought everywhere—especially when those entrusted with public trust confuse the people’s money as their own.


This article has been edited to acknowledge that Henry Wojtaszek reimbursed Batavia Downs Gaming for his use of an agency car.

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