Kenneth Handal '73 Named New York Racing Association's Acting GC, Chief Ethics and Compliance Officer

From Law.com:

Two weeks after a scandal involving overcharging bettors shook the New York Racing Association, it handed the reins of its law department to legal and compliance expert Kenneth Handal. He was named NYRA’s acting general counsel, chief ethics and compliance officer, and secretary on May 14, replacing ousted GC Patrick Kehoe.

As part of a larger shakeup of the nonprofit racing association, COO Ellen McClain was tapped for the role of NYRA president, taking on some of the responsibilities of former CEO Charles Hayward, who was also terminated by the board. In what she described as a “critical period for New York racing,” McClain said in a statement that Handal is “a crucial addition to the NYRA senior management team and has the expertise to help guide our company through the current crisis and beyond.”

Just how long Handal will stay on with NYRA has yet to be determined. But at least one thing is clear—the acting GC has his work cut out for him right out of the gate. “There are a lot of issues that need to be dealt with,” he says.

That’s a studied understatement. On the heels of an interim report from the New York State Racing and Wagering Board, NYRA is under investigation to determine what its officials may have known about overcharging for certain exotic bets. During a period of more than a year, the association wrongfully withheld more than $8.5 million by not reducing its takeout rate, as it was required to do by law. State auditors discovered the error in December.

Even NYRA’s naming of new executives in the midst of the investigation has fueled the ire of critics. NYRA issued a statement Wednesday defending the appointments, saying, “It exercised its business judgment as a private, not-for-profit corporation to appoint a president and secretary. These appointments were made to stay in compliance with NYRA’s Bylaws, Article VII, Section 7.01.”

The New York Daily News reported that New York Governor Andrew Cuomo said last week that his administration would let the investigation “run its course.” But the governor threatened to tighten legislative control over the association and called it “a long-troubled agency.”

From 2003 to 2005, NYRA operated under a deferred prosecution agreement following charges of tax evasion and money laundering that spanned nearly two decades.

“It is a critical period in NYRA’s history,” says Handal. “They’ve faced critical periods before and come through them,” he says. “I’m hoping we can do the same here.”

The acting GC has wasted no time familiarizing himself with NYRA’s current regulatory compliance program and the organization’s code of ethics. Handal has also been getting to know the organization’s remaining four lawyers, as well as his colleagues in management and on the board of directors. Based on his first week, he says NYRA’s board and company executives appreciate the presence of a strong general counsel.

Handal points out that strong in-house counsel tend to be matched with strong companies. “If you look around, the best run companies have strong law departments,” he says.

The new GC has been asked to help management and the board get through this critical period, based on his proven track record of cleaning up corporate messes. 

In 2005, he joined CA Technologies Inc. (formerly Computer Associates) to head up its legal department after most of its top executives were jailed for fraud. As GC, Handal successfully led CA’s management and board through a deferred prosecution agreement, and later headed up its global risk and compliance group. 

He left in 2009, at which time he says he’d accomplished what he went there to do. Handal says that it was rewarding to help save the company and its 15,000 jobs. “Had it not been for the DPA and the work done to get the company through this period,” he says, “CA might have gone out of existence.”

Handal notes that he likes a challenge: “I’ve always thrived in that kind of situation, where I can put my own stamp on something from a legal and compliance point of view.” 

The seasoned lawyer says that he learned to make decisions under fire from doing trial work as an assistant U.S. attorney for the Southern District of New York. He has also served as associate general counsel for Altria, where he oversaw litigation, and as a partner in the law firm of Arnold & Porter.

“All of that prepared me for CA,” says Handal, “and now for NYRA.”