To paraphrase Captain Renault, were shocked, shocked to find that secret Albany wheeling dealing was going on in the failed AEG Aqueduct deal. Earlier this year, Governor Paterson picked Aqueduct Entertainment Group to install slot machines at the Queens Aqueduct, but AEG's selection was controversial, not only because the group was politically connected but also because its bid sucked. Now, according to the Daily News, the State Inspector General has issued a report, finding "a bidding process rife with inside dealing, secret lobbying and more than $100,000 in campaign donations from the bidders."

Further, Inspector General Joseph Fisch criticized Democrats for "giving AEG lobbyists inside information, but stopped short of formally accusing them of bid-rigging," saying, "I am outraged and profoundly saddened by the conduct conducted throughout this process by the people who had the responsibility to serve the public - a responsibility that they betrayed." The Democrats in charge of picking AEG for the racino plans were Governor Paterson, Assembly Speaker Sheldon Silver and State Senate Democratic Conference Leader John Sampson, and Fisch said, "They all together with the governor had one continuency and one constituency only, and that was the state of New York. "And their responsibility to that one constituency was betrayed."

Sampson, who advocated for AEG, issued a statement saying, "Mistakes were made" in the process, but basically blamed the whole process, not his relationships (he believes he did nothing wrong). Silver also issued a statement, laying blame on Paterson and Sampson, "I was unconvinced that the bid submitted by AEG and initially approved by the Governor and Senate in January had been adequately evaluated, critically analyzed and carefully considered. Because serious concerns had been raised regarding the selection process, I demanded that every bidder meet certain requirements before the Assembly would approve the awarding of this franchise. Essentially, those same requirements were adopted as part of the new bidding process and were ultimately met by the successful bidder." And Paterson said:

, "One thing is indisputable: earlier this year Governor Paterson refashioned the selection process for a gaming operator at Aqueduct and further convinced the Legislative leaders to adhere to this new process. At the Governor's urging, standard State procurement rules were applied to the bidding process."

AEG was disqualified in March; Malaysian group Genting was selected to install the slot machines.