Jay-Z’s Aqueduct Conundrum

Even though Jay-Z is considered a Live Nation artist, it’s his relationship with AEG that is getting him in hot water. OK, it’s AEG, but not THAT AEG.

The New York press has been focusing on a possible scandal that involves Gov. David Paterson and a deal he negotiated regarding the lucrative Aqueduct Racetrack in Queens. There has been an effort to remake the racetrack into a multibillion-dollar racino, and six different entities were in the running for operation rights.

That is, until the least likely choice – a partnership called Aqueduct Entertainment Group – won the contract over five groups that were considered better choices, according to the New York Post. That’s when Paterson’s relationship to Aqueduct Entertainment Group came under federal scrutiny. Paterson gave the contract to Aqueduct Entertainment Group a few days after its major investor and “Queens kingmaker,” the Rev. Floyd Flake, suggested he was considering endorsing Paterson’s rival, Andrew Cuomo, in the upcoming gubernatorial election.

Since then, all hell has been breaking loose, with State Comptroller Tom DiNapoli saying he had concerns that Aqueduct Entertainment Group would not be able to provide the $300 million license fee for the project. Only 3 percent of state voters in a survey said that awarding the contract to Aqueduct Entertainment Group was “fair and appropriate,” according to the Post.

Now Paterson’s new BFF, Jay-Z, has found himself under the microscope. Paterson and Jay-Z have been seen dining together, and Paterson was a special guest at Hova’s 9/11 tribute at Madison Square Garden. When Las Vegas casino mogul Steve Wynn, who threw his hat into the racino ring, was told by Paterson he needed a minority partner, Wynn called Jay-Z, according to the Post. A deal never materialized.

Eventually, Wynn backed out of the bidding process. Meanwhile, Jay-Z invested a 7 percent stake in Aqueduct Entertainment Group through his company Gain Global Investments Network, according to the paper.

Aqueduct Entertainment Group denied courting Jay-Z to gain 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,” a spokesman told the paper.

Paterson’s office also denied the connection.