- Horse Racing - NTRA calls on Giuliani for help

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Wednesday, November 20
NTRA calls on Giuliani for help

NEW YORK - The National Thoroughbred Racing Association will hire the consulting firm headed by former New York city mayor Rudolph Giuliani to oversee restoration of the sport's image in the wake of the Breeders' Cup pick six scandal, industry officials said Tuesday.

The firm, Giuliani Partners, will make recommendations on how to upgrade the industry's communications and wagering systems and implement security procedures and controls, according to the officials, who spoke on the condition of anonymity. The company will be involved in a comprehensive examination of pick four and pick six bets made in the past year, the officials said.

The company will also oversee an ongoing effort by Ernst and Young's security unit to examine controls in the industry's totalizator network, which links hundreds of wagering sites across the country and processes more than $14 billion in wagers a year, the officials said. Ernst and Young is a partner in Giuliani's company.

The NTRA held a special board meeting Tuesday in Manhattan to discuss the plan and scheduled a news conference for Wednesday morning.

Public confidence in wagering has become a major challenge for the NTRA since the pick six investigation was launched on Oct. 27. Racing fans have complained, sometimes bitterly, that the investigation has raised new concerns about the security of parimutuel pools and renewed fears that people with access to the tote system are able to bet after the starting gate opens or alter tickets.

No one has been charged in the investigation. The three suspects in the case surrendered on Nov. 12 to the U.S. attorney for the Southern District of New York. The U.S. attorney's office has until Dec. 17 to convince a grand jury to issue an indictment.

In a criminal complaint, the U.S. attorney's office alleged that Chris Harn, an Autotote employee who was fired on Oct. 31, altered bets placed by two former fraternity brothers, Derrick Davis and Glen DaSilva, through telephone accounts at Catskill OTB. Harn had access to the Catskill OTB computer systemfrom Autotote's headquarters in Newark, Del., the complaint said.

The NTRA, which asked New York regulators to investigate the Breeders' Cup pick six just hours after the Cup was run on Oct. 26, appointed a task force on Nov. 1 to study wagering and technology issues. On Nov. 6, the NTRA hired Ernst and Young to begin an immediate review of the tote systems.

Since then, officials said, the NTRA has considered bringing Giuliani aboard. Many board members have privately expressed concern that the organization needed to go to an independent company instead of relying on racetracks, OTB companies, and tote companies to cooperate with the organization's efforts to close security gaps in the network. Getting a company associated with Giuliani - who left office under high approval ratings after his leadership during the Sept. 11 crisis - became a priority, officials said.

"This will make sure we're getting the kind of tough-minded analysis that we need, from an outside source," said one industry official.

Giuliani Partners was launched shortly after Giuliani's final term as mayor of New York ended late last year, and most of its employees are former members of Giuliani's staff at City Hall. According to a description on its website, the firm helps companies "operate more effectively in both daily operations and long-term planning."

Officials at Giuliani Partners did not return phone calls on Thursday.

Earlier this year, Mexico City hired the company to help respond to problems of rampant crime. Giuliani Partners also has consulting contracts with Merrill Lynch, Nextel Communications, and Purdue Pharma.

One of the employees at Giuliani Partners is Mike Hess, the former head of New York's council on economic development. Hess guided the city's policy when it solicited bids to purchase New York City Off-Track Betting Company in 2001. The city eventually accepted a bid from Magna Entertainment over competing bids from the New York Racing Association and Churchill Downs, but the deal was never taken up by the state legislature, which had to approve the sale.

It was unclear Thursday how much the NTRA will pay to bring Giuliani aboard. Mexico City pledged $4 million to the company for its crime-fighting consultation. Giuliani is believed to be receiving as much as $100,000 to make a private speaking engagement.

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