(AllHipHop News) Jay-Z, Russell Simmons and The Reverend Floyd Flake are expected to be the first of a dozen people who will be subpoenaed today (March 2) as part of a federal investigation into the Aqueduct Racetrack.
Jay-Z and Rev. Flakes relationship are being scrutinized by critics due to their connections to Gov. Paterson.
Detractors claim Jay-Z and Flakes group Aqueduct Entertainment Group (AEG) was awarded a contract to operate 4,000 video slot machines to the Aqueduct Race Track racino, based on their relationship with Gov. Paterson. Jay-Zs company Gain Global Investments Network LLC has a 7% stake in AEG.
Gov. Paterson is accused of awarding the contract to AEG in order to gain political support from the companys investors.
Russell Simmons acted as an advisor for rival bidder Penn Gaming, who lost the contract to AEG.
Other losing bidders claim that AEG offered the least money and financial details. They also claim AEG provided unrealistic financial projections according to competitor Delaware North.
AEGs bid was about $200 million for the license, while other companies like Delaware North offered bids upwards of $300 million in addition to other incentives. The subpoenas were issued by the states Inspector General's Office, which is working with the US Attorneys office.
Gov. Paterson and AEG have denied all allegations.