But all that seems to have stopped sometime in 2016. The last quarterly financial report posted on the NYRA website is the one for the second quarter of 2016, there's no annual report for 2016, and the meeting book for the last publicly listed Directors' meeting, held in December 2016, had a budget for 2017, but no actual financial data.
So what's happened? Why is NYRA no longer transparent? From the time "new NYRA" was established in 2011 until mid-2016, it conducted itself as if it were a governmental entity, acting in ways that were consistent with New York State's open meetings law and freedom of information law. As well it should have. "New NYRA" was a creation of legislation in 2011 that rescued old NYRA from bankruptcy, transferred the land under NYRA's race tracks to the State, and gave the state, and in particular, Governor Andrew Cuomo, effective control over appointments to the NYRA Board of Directors, and subjected NYRA to close oversight by the State Budget Department's Franchise Oversight Board.
New legislation this year (2017) changed the composition of the NYRA Board of Directors while at the same time giving the Franchise Oversight Board even greater powers. That legislation was signed by Cuomo as part of the State's 2017-18 budget, but did not go into effect until this week, when "new" Directors -- who in fact were virtually the same as the previous Directors -- were appointed. But, whether NYRA is still a state entity under the new version of the law or not, there should be no question that it was one under the law as it was through the end of 2016 and at least the first quarter of 2017, and that therefore its records for 2016 and prior years should be open to the public. After all, it was our tax money that bailed NYRA out of bankruptcy -- along with a slice of the income from the Resorts World slot machine palace at Aqueduct -- and as taxpayers we should be able to see what's happened to our money.
Several months ago, when I noticed that there were no new financials being posted on the NYRA website, I filed a Freedom of Information Law (FOIL) request for them with NYRA. So far, the only response has been two adjournments of my request, the latest to tomorrow, June 9th. Here's why I think NYRA should make its financials public on its website and therefore should also honor that request and provide its recent financial reports -- which I will be happy to share online if NYRA doesn't post them -- and, more generously, why I think its apparent retreat from transparency is wrong.
New York has two important statutes that promote public access to state agencies. The Open Meetings Law (Sections 100-111 of the Public Officers Law) requires state agencies to conduct their business in public. The Freedom of Information Law (Sections 84-90 of the Public Officers Law) allows the press and individual citizens access to government agencies' records, subject to very limited exceptions. The preamble to FOIL states that:
government is the public's business and . . . the public, individually and collectively and represented by a free press, should have access to the records of government.
Since FOIL was first enacted in 1974, and especially after amendments in 1977 that significantly broadened its reach, the courts have uniformly said that the statute is to be read liberally, with a presumption that disclosure is valid, and that the exemptions in the law are to be read narrowly.
Under FOIL, an "agency" must disclose its records when requested, unless one of the following exemptions applies:
- Records specifically exempted by state or federal law;
- records that would create an unwarranted invasion of someone's personal privacy;
- records whose disc;closure would interfere with current or imminent contracts or collective bargaining agreements;
- records that are trade secrets or whose disclosure would cause serious competitive disadvantage to a private entity that submitted them to the agency;
- certain law enforcement records;
- records that could endanger the life or safety of an individual;
- exam questions and answers;
- records that would compromise an agency's computer security; and
- certain intra-agency records, but specifically not including statistical and financial tabulations and records of audits.
Section 86(3) of the Public Officers Law defines an agency for purposes of FOIL as:
(A)ny state or municipal department, board, bureau, division, committee, public authority, public corporation, council, office or other governmental entity performing governmental or proprietary functions for the state. . .
Obviously, NYRA isn't a direct state agency like, say, the Governor's Office or the Department of Taxation and Finance. But that's not necessary for an entity to be subject to FOIL. Generally, even private or semi-private entities can by "agencies" for purposes of FOIL if they are so involved with the state that it makes sense to bring them within the reach of FOIL.
New York's highest court, the Court of Appeals, has not yet ruled on whether NYRA or any entity like NYRA is subject to FOIL, but in 2009, the next level court, the Appellate Division in western New York, laid out a six-factor test to be used in determining whether FOIL applies to something that's not, strictly speaking, a government department. In the absence of a state-wide rule from the Court of Appeals, and in the absence of any competing rulings from other Appellate Divisions, that ruling is precedent in all of the state. Let's look at that test and see how it might apply to NYRA.
First, is the entity required to disclose its annual budget? In NYRA's case, the answer is yes; the budget must be submitted to the State Franchise Review Board for approval.
Second, does the entity maintain offices in a public building? In 2011, when "new NYRA" was established, old NYRA ceded whatever rights it had to the land under its racetracks it the State. So, while the grandstands may belong to NYRA, the land under them belongs to the state. This factor is also on the side of NYRA's being an "agency" for purposes of FOIL.
Third, is the entity subject to a government entity's approval over hiring and firing? This factor says NYRA is not an "agency."
Fourth, does the entity have a Board comprised primarily of government officials? Only two of the 17 NYRA Board members in the 2011-June 6 2017 period were actually government officials, but of the 17, eight were nominated by the Governor and two each by the State Assembly Speaker and State Senate Majority Leader, so 12 of the 17 slots were filled by government appointees. Comes down on the side of NYRA being subject to FOIL.
Fifth: was the entity created by a government agency? "New NYRA" was created by the state legislature, through amendments to the State Racing, Pari-Mutuel Wagering and Gaming Act in 2011. Without the authorizing legislation, it wouldn't exist. Another factor for FOIL.
Finally, does the entity describe itself as an agent of a governmental agency? NYRA hasn't explicitly said so, but it has structured itself as if it believes itself to be subject to FOIL. It has appointed a records access officer and an appeals officer, as required by the FOIL statute, and, up through the end of 2016, it conducted its Board meetings in public, as required by the Open Meetings Law.
On balance, then, NYRA was right when it decided back in 2011 that it should act like a public entity. Nothing changed between then and yesterday-- although the balance of factors may be different going forward now that "new" Directors have been appointed in accordance with the 2017 budget legislation -- and NYRA should continue to make its financial records public and hold its Board meetings in the open. I'm hoping NYRA's lawyers reach the same conclusion.