Last March, the Globe reported that Vornado Realty Trust, Suffolk Downs’s largest stakeholder, was divesting its 19.9 percent share in the track because its executives didn’t want to undergo intensive background checks that are required of all casino license applicants. Instead, in what was billed as an interim step, the state gambling commission approved a transfer of Vornado’s shares to a blind trust over which the company supposedly has no control or influence. Stephen Kidder, the managing partner of the law firm Hemenway & Barnes, and a former state revenue commissioner, was appointed trustee. According to minutes from the commission’s March 28 meeting, “The Vornado blind trust is a temporary measure created with the understanding that the trust would divest Vornado’s entire interest to a new investor.”
Clearing up the ownership of the Suffolk Downs group is crucial to proceeding with its background check — a vital part of the licensing process established under the 2011 gambling law. The deep background checks are designed to ensure that casino licenses go to financially stable applicants of good character. Recent revelations that the commission’s check discovered evidence that Gary T. Piontkowski, the former president of Plainridge Racecourse, another gambling applicant, was skimming cash from the racetrack’s money room underscore what’s at stake. The commission should not let the Suffolk Downs proposal go forward without, at the least, full knowledge of whose background it needs to check.
But, four months after Vornado’s announcement, it has yet to sell its interest in Suffolk Downs, and the commission won’t say whether a timetable for doing so is part of the agreement.
“The term of the trust are confidential,” said Elaine Driscoll, the commission’s director of communications. In the meantime, Kidder — instead of Vornado executives, or a prospective buyer of its ownership share — is undergoing the required background check. The results, said Driscoll, will be publicly presented during a hearing for the entire Suffolk Downs Phase 1 application.
This special arrangement for Suffolk Downs turns the background check, as well as the overall goal of transparency, into a mirage. It allows Suffolk Downs to continue to compete for a license, while excusing Vornado from the scrutiny other applicants must accept as part of the process. It also opens up the possibility that Vornado executives will reap huge financial rewards if Suffolk Downs wins the casino license — all without revealing the information others must reveal as casino license competitors.
Vornado should do what it said it was going to do — divest. Its executives should not be allowed to use a blind trust to keep the public in the dark about who they are and what they represent.