Metro

Silver warns gov over slots deal

Assembly Speaker Sheldon Silver yesterday turned up the heat on Gov. Paterson over the awarding of the contract to run the video lottery casino at Aqueduct Racetrack to a group led by Paterson pal Floyd Flake.

In an unusually blunt and threatening letter to Paterson, Silver said he will reject the governor’s selection of Flake’s company, AEG, to run the lucrative “racino” unless four conditions are satisfied.

“Let me reiterate — in the event our conversation and my letter were not absolutely clear,” Silver said in sharp language directed at Paterson before he again stated his requirements for accepting Flake’s Aqueduct Entertainment Group.

Silver bluntly put Paterson on notice that the conditions were “not negotiable.”

These are the conditions:

* AEG must pay a $300 million up-front licensing fee.

* Anyone with a felony conviction within the past 15 years is barred from being a partner in the deal.

* The project must be environmentally sound.

* Legislative leaders must have veto power over any subsequent changes to the plan.

One of the partners in the AEG bid, Darryl Greene of the Darman Group, has a criminal record.

Silver notes several times in his letter that Paterson had already agreed to the conditions. Silver writes that he was warning the governor again because he had read recent press reports suggesting that AEG believed the conditions could be negotiated.

Silver said they can’t be.

For his part, Paterson defended the choice.

“Silver wanted four conditions met . . . Those conditions were relayed to the group that won the bid and they agreed to the terms,” Paterson said. “They’re the conditions we all agreed to.”

The lengthy bidding process has been fraught with problems — and even led Las Vegas gaming titan Steve Wynn to back out last year.

Meanwhile, sources involved in the discussions told The Post that Paterson’s senior advisers had favored other bidders as more qualified than AEG in terms of financial resources and gaming experience.

Those advisers include Secretary Larry Schwartz, Lottery Director Gordon Medenica and Budget Director Bob Megna.

“AEG was not recommended by the governor’s senior staff at any time,” said a source involved in the discussions.

Another legislative source said it was the biggest Paterson fiasco since his botched handing of the naming of a successor to Hillary Rodham Clinton’s Senate seat.

Sources also said a preliminary assessment of the top six racino bidders by the Lottery Division listed AEG near the bottom of the pack.

A division spokesman said any rating or study was internal or preliminary, and declined to release it.

Megna said AEG was “qualified” and “could meet the requirements.” But he said his financial analysis was based on AEG and other bidders raising $200 million by March 31, not $300 million.

Also yesterday, a rival gaming firm slammed Paterson for rejecting its plan and revealed it had offered the cash-starved state $100 million more up front than AEG.

“We were extremely shocked and dismayed by the governor’s [decision], given we offered over $100 million more to the state than AEG in our bid,” fumed Penn National Gaming Senior Vice President Eric Schippers.

“AEG offered $200 million. We offered $301 million in up-front cash. Clearly that’s $100 million more than AEG,” Schippers told The Post.

AEG then matched Penn National’s $301 million up-front fee offer.

Albany insiders said it’s surprising to see a firm publicly dress down a governor and suggest favoritism the way that Penn did.

Under an unusual bidding procedure, both Silver and Senate Democratic Conference Leader John Sampson of Brooklyn were required to sign off on Paterson’s choice for the racino.

Additional reporting by Brendan Scott in Albany and Maggie Haberman in New York

carl.campanile@nypost.com