Buffalo, N.Y. (WBEN) - Western Regional Off-Track Betting (OTB) is under the microscope once again from locally elected lawmakers and other officials for controversial practices within the corporation.
State Assemblywoman Monica Wallace and State Sen. Sean Ryan were joined on Friday by Erie County Comptroller Kevin Hardwick to call on the Western Regional OTB Board of Directors to rescind severance packages totaling over $500,000 for three departing executives.
They claim the lucrative severance packages violate the state’s Severance Pay Limitation Act, which was passed by Assemblymember Wallace and Sen. Ryan in 2019, and siphon public funds that would otherwise be distributed back to the 15 counties and two cities that own OTB.
In late June, the OTB Board approved the payouts for the top executives, including a nearly $300,000 severance package for OTB President and CEO Henry Wojtaszek, who is stepping away from OTB at the end of the year. The other two executives will be leaving OTB early next year.
Western Regional OTB is a public-benefit corporation that exists for the benefit of 15 counties in Western New York, as well as the cities of Buffalo and Rochester. It operates dozens of betting parlors, as well as a racetrack, hotel, and casino in Batavia. Proceeds from its operations are to be distributed back to the municipalities, helping to reduce the local tax burden and paying for much-needed county and city services.
"Let's be clear, OTB is set up for the benefit of the local taxpayers. It is a public-benefit corporation, and it is tasked with operating for the benefit of the public. What that means is that money not spent on OTB operating is supposed to be returned to the taxpayers of the participating municipalities to pay for much-needed municipal services, and to help offset the local tax burden. But instead of worrying about taxpayers, OTB Board members and executives are treating this entity like it is their personal piggy bank," said Assemblywoman Wallace during a press conference on Friday.
"I've been in office for 12 years, and for a good part of that, I've been pointing out that the OTB is a corrupt organization. They're a public-benefit corporation, they're supposed to take all the proceeds and help support 15 counties and two cities. But I keep having to say, 'Public-Benefit Corporation.' It kind of says what it says, it's supposed to benefit the public. But if you judge them by their actions, you'd probably think they're a private-benefit corporation designed to support and feather to the vest of their top executives," added Sen. Ryan on Friday.
"What we have here, I think when it comes right down to it, is a problem with the culture at OTB. I've been looking into their operations almost since I took office in January of 2022, sent them a number of letters, went to one of their meetings. I thought we had gotten past this. I thought there was going to be a culture change once ticketgate and the insurance problems were disclosed. I thought we were going to be better. I thought the legislation that passed last year that dissolved the old Board and created a new one was going to change the culture. But obviously, as the Assemblywoman and the Senator have indicated, that just hasn't happened," said Comptroller Hardwick on Friday.
Officials say the severance packages authorized by the Board last month represent an egregious abuse of public money. The $500,000 "golden parachute" payouts are astounding in scope, and an insult to every taxpayer within those 15 counties and two cities.
By awarding these buyouts to departing OTB executives, officials say OTB is siphoning public funds and wasting money that would otherwise be distributed back to the municipalities.
"If these packages are paid, that's $500,000 that is not going to the counties and the cities for public services. That's money that could otherwise be used for roads, for senior services, for childcare. In fact, the $500,000 that these executives are getting is more than OTB's entire annual allocation for 12 out of the 15 counties in the region. And Wojtaszek's severance pay alone is more than OTB's entire allocation for several of the counties," Wallace said.
"It's corruption, plain and simple. Leadership is siphoning off a half million dollars of public money, and they're stuffing it in to someone's pocket. Maybe they thought nobody would notice, but for a corporation with their checkered past, of course we're going to notice, because we're looking at them," Sen. Ryan added. "But of all the things they've done in the last few years, this has to be the boldest they've done. This type of corruption needs to have a light shined on it. We're here today to shine the light on it."
Officials say OTB Board members have a fiduciary obligation to ensure that the OTB operates for the benefit of the municipalities in the Western region. By authorizing these lucrative and wasteful contracts, the Board has violated its fiduciary duty.
To add, officials feel the Board's decision is even more offensive when the wages of the three executives increased twice since last spring, ensuring the payouts are as high as possible.
As for the Severance Pay Limitation Act, the law was passed in the wake of a similar golden parachute buyout at the Erie County Water Authority. It limits severance packages for at-will employees at public-benefit authorities to three months’ salary.
The severance packages awarded to all three departing executives are above this threshold.
"In total, those three executives will be paid to sit home the next year, while taxpayers go to work to cover the cost of their elaborate packages," Wallace said. "In my district, the average income is less than $50,000. But the folks in this community are being asked to subsidize $500,000 in severance packages. One of those beneficiaries to the lucrative packages, President and CEO Henry Wojtaszek, is now among one of the highest paid officials in the state, earning more than [Gov. Kathy Hochul] and more than the Vice President of the United States [Kamala Harris].
Western Regional OTB has a well-documented history of misusing public resources under Wojtaszek’s leadership.
In 2021, New York State Comptroller Thomas DiNapoli issued two audits, one that found hundreds of Buffalo Bills, Buffalo Sabres and concert tickets purchased by OTB and intended to be given to players as incentives were instead used by OTB executives and Board members, who then racked up thousands of dollars in concession bills for food and alcohol.
Hardwick also cited the impropriety of OTB giving free, high-end health, dental, and vision insurance for Board members.
Both Wallace and Ryan worked with the State Legislature to pass changes reforming Western Regional OTB in an effort to curb abuses of public funds. Those changes include introducing weighted voting to ensure residents of larger counties like Erie County have equal representation on the OTB Board.
Notwithstanding these changes, however, they feel OTB Board members have continued to allow fiscal misconduct.
"We had hoped the audits would set the OTB straight. We had hoped that changing their Board members would set the OTB straight. Turns out, it's getting worse," Sen. Ryan said. "All the work we've done to try to rein in the OTB, the nerve of them to give golden parachutes to their top executives; now, you say 'golden parachute', but what if we just say, 'They're paying their top executives not to work for a year'? Who gets that benefit when they leave a job or get fired? I'm sure every Western New Yorker would like to have that benefit. And there's a lot of people that work at OTB, people who do maintenance, people keep the facilities up, they're not getting a year's full pay when they stopped work. But instead of the money going back to the municipality, it's going into the pockets of Henry Wojtaszek."
Wallace says if the OTB Board of Directors does not rescind the severance packages given to the three executives, she will be asking the State Attorney General's Office to step in and conduct an investigation into the Board's actions.
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