Jay Z, Gov Paterson Caught in NY Corruption Scandal…Aqueduct Slots Deal Draws Scrutiny…

Jay-Z stake in Aqueduct slots deal draws scrutiny

By FREDRIC U. DICKER in Albany and ANNIE KARNI in New York City
12:57 PM, February 21, 2010

Gov. Paterson has 99 problems — and Jay-Z might be one of them.

The governor’s friendship with the hip-hop impresario is raising questions because of the latter’s involvement with AEG, the consortium controversially selected to run a multibillion-dollar racino at Aqueduct Racetrack.

Paterson’s bond with the man born Shawn Carter was growing at the same time that Jay-Z was being courted to join the Aqueduct Entertainment Group.

Paterson tabbed AEG in late January to turn the aging track into a slick gaming venue with 4,500 video slot machines.

But the deal is under federal investigation after questions were raised about the secret selection process.

Last Aug. 31, Jay-Z and his wife, Beyoncé, shared a podium with Paterson to announce that Jay-Z would stage a 9/11 benefit concert at Madison Square Garden.

In early September, AEG Chairman Richard Mays approached Jay-Z through his business partners and asked whether he would be interested in joining the consortium — which at the time ranked last among six bidders seeking the lucrative project.

Within days, Jay-Z had agreed to take a 7 percent stake in AEG through one of his companies, Gain Global Investments Network LLC.

Jay-Z, 40, had long been interested in the project, sources said. In spring 2009, he’d begun talking with casino mogul Steve Wynn about joining Wynn’s bid to operate the racino.

No deal was hammered out, and Las Vegas-based Wynn Resorts Limited, frustrated by the long review process and its murky rules, eventually bowed out.

“Paterson directly told Wynn he needed to have a minority partner, so he went and got Jay-Z. But when Wynn pulled out, Jay-Z was without a home,” a source told The Post. “AEG went and grabbed Jay-Z after his deal with Steve Wynn fell through.”

AEG jumped at the chance to recruit Jay-Z, who has become increasingly close to Paterson, sources said. The two dined together in June and hung out in the Hamptons.

After attending the 9/11 concert at Madison Square Garden as Jay-Z’s guest, Paterson wrote to MTV: “I can personally attest to his commitment to New York and the impact he has on New Yorkers of all ages. He is most definitely deserving of the top-MC-of-2009 title.”

AEG denies that it courted Jay-Z to win favor with the governor.

“Given [Jay-Z’s] superstardom and his long and deep connection to New York, the partners thought he could bring a unique perspective to shaping a facility that would truly be an entertainment destination,” AEG spokesman Jonathan Rosen said. “The partners were looking to bring in someone who could bring marketing and community advice to the team.”

A Paterson spokeswoman added: “There is absolutely no relationship between Governor Paterson’s friendship with Jay-Z and the choice of AEG.”

Still. Jay-Z seems an odd fit with the group, considering that he brags in his music about having dealt drugs in his youth — not to mention that he pleaded guilty to misdemeanor assault and was sentenced to three years’ probation for stabbing a record executive in a 1999 nightclub melee.

One member of the AEG consortium, Darryl Greene, has already been forced to drop out over his criminal past. He’d fleeced city agencies out of $500,000.

Paterson’s relationship with others in the AEG consortium has also drawn criticism. Three days after the winning bid was announced this month, he met with the Rev. Floyd Flake, an AEG partner and Queens political kingmaker, in the governor’s Harlem office. The two later said that they talked politics but that there was no quid pro quo.

Meanwhile, Paterson continues to pal around with Jay-Z, even lauding him last month in Esquire for supporting the administration through some rough patches.

“Jay tells me, ‘I’ve got your back,’ ” the governor told the magazine.

Additional reporting by Carl Campanile



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