NY Lottery Division gets federal subpoenas

Peter Kiernan, counsel for Governor David Paterson, said in a statement that the Lottery Division had been issued subpoenas by the U.S. Attorney's Office on February 9 related to an entity called the New Direction Local Development Corporation.

New Direction, according to its website, was founded by Congressman Gregory Meeks and state Senate President Malcolm Smith to aid residents of Queens and the Rockaways.

Rev. Floyd Flake, the congressman whom Meeks replaced, holds a stake of less than 1 percent in Aqueduct Entertainment Group, the vendor selected to run the video lottery terminals at Aqueduct Race Track.

Governor David Paterson in a radio show last Friday had called Flake a "minute" investor in the video lottery venture.

One of New Development's missions was to raise money for victims of Hurricane Katrina, but the New York Post on February 8 ran an article saying almost none of the money reached the victims.

The governor's counsel said: "The Lottery Division has been advised that the inquiry by the U.S. Attorney's Office is in regard to the New Direction Local Development Corporation, and not the selection of Aqueduct Entertainment Group to run video lottery terminals at Aqueduct Race Track."

The New York Times and other newspapers have raised questions about whether the governor's selection of Aqueduct Entertainment was due to Flake's political clout.