The following is a NY Post exclusive report:

Gov. Paterson secretly accused Assembly Speaker Sheldon Silver of “collusion” after complaints of corruption surfaced over the selection of a politically connected firm to operate an Aqueduct casino, The Post has learned.

Paterson’s stunning claim was laid out in never-published “off-the-record” statements the governor made during a recorded interview with The New York Times and recounted in explosive internal staff e-mails.

Both the tape of the interview and e-mails were obtained by state Inspector General Joseph Fisch as part of his probe into the circumstances surrounding the state’s giving the Aqueduct Entertainment Group the contract to run a 4,500-video slot casino at the Queens race track.
In the interview, Paterson vents that he was being unfairly pilloried over political fallout from AEG’s selection. He made the choice with Senate Democratic leader John Sampson and Silver.

But Paterson charges that Silver was trying to “sabotage” the AEG deal on behalf of another unnamed bidder by attaching additional financial and criminal background conditions on its investors in return for his support.

For example, Silver increased to $300 million from $200 million the up-front license fee AEG had to pay the state.

“Suppose the bid is $200 million. And I think I know who’s getting the bid and they have $200 million, but I don’t think they have $300 million. So I write into it, it should be $300 million,” Paterson says in the “off-the-record” portion of the interview, which is being published by The Post for the first time.

“And then the group that wins the bid can’t pay it. And [Silver’s] group’s sitting there and has $300 million. What is the legal term that describes that act?” Paterson rhetorically asks in his conversation with the reporter.

“Collusion,” the governor said.

Paterson adds: “There just isn’t enough attention being paid to what’s really going on here.”

In e-mails, Paterson’s aides fretted over what the governor had said.

“He [Paterson] outright accuses the Assembly Speaker of collusion. Tabs will jump on this,” former Paterson communications director Peter Kaufmann wrote in a Feb. 16, 2010, e-mail to chief of staff Larry Schwartz, referring to tabloid newspapers.

When questioned by the IG probers whether the “collusion” accusation about Silver was accurate, Paterson said, “I wouldn’t say it’s inaccurate.”

For his part, Silver pointed to sections of Paterson’s “sworn” testimony, where the governor says, “I’m not implicating the speaker.”

In his sworn testimony to investigators, Silver said he had “no horse in this race,” although some insiders believed he was backing a bid submitted by SL Green and the Hard Rock hotel chain.

He did say he didn’t expect AEG to meet his conditions.

State officials later rescinded AEG’s contract, concluding the consortium was “unlicensable.”

A new company, the well-regarded Malaysia-based Genting, was subsequently awarded the Aqueduct gaming contract in August after the AEG bid collapsed in scandal.

Some Albany insiders said Silver acted most responsibly by imposing stricter conditions that helped sink AEG. Those same conditions were included in the most recent bidding rules that led to the selection of Genting.

At a groundbreaking ceremony for the racino on Thursday, Paterson said Fisch’s probe provided the impetus for the state to clean up its selection process. Under the new procedure, lobbying was banned and the professional judgment of state lottery officials held sway.

“If there were lemons,” Paterson said, “we turned them into lemonade.”

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(Source: NY Post)