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Metropolitan Transportation Authority Chairman Joe Lhota has been serving as a director on the board of the Madison Square Garden Company. | Dana Rubinstein
Lhota gets job at MSG, raising conflict concerns
By DANA RUBINSTEIN
The man charged with fixing the subway system is even busier than previously disclosed.
In addition to his numerous other obligations, as of December, Metropolitan Transportation Authority Chairman Joe Lhota has been serving as a director on the board of the Madison Square Garden Company, according to documents filed with the Securities and Exchange Commission.
The Madison Square Garden Company, where Lhota once worked as an executive, controls Madison Square Garden, the entertainment venue that crouches atop Penn Station, which, in turn, houses the MTA's Long Island Rail Road Manhattan terminal and two subway stations. Last year, it paid its directors more than $150,000 each, according to its public filings.
In a statement, MTA spokesman Jon Weinstein said Lhota is careful to avoid any conflicts of interest.
"If there is anything that involves MSG and Penn Station, Lhota will appropriately recuse himself from any matter where there could be even the appearance of a conflict," he said.
Since 2016, SEC documents also indicate Lhota has served on the board of MSG Networks, a separate company that owns TV channels MSG Network and MSG+. There, filings indicate directors earn a similar amount.
Madison Square Garden Company spokeswoman Kimberly Kerns declined to comment on what other corporate perks Lhota might enjoy. But she did say, "Joe is a valued independent member of our board."
Lhota's Madison Square Garden board seat comes as he is stewarding the MTA through a generational crisis. The MTA runs the floundering subway and bus system in New York City, along with its commuter railroads, and several of its bridges and tunnels. He's already balancing the MTA job with yet another position, as an executive at NYU Langone Health, where he earns $1.6 million a year. He earns $1 a year at the MTA.
Penn Station is owned by Amtrak, but it plays a pivotal role in the MTA's operations, serving as the terminus or jumping-off point of 500 Long Island Rail Road trains a day, and also housing stations for the A/C/E and 1/2/3 subway trains.
The MTA plans to renovate those stations as part of its controversial $1 billion "Enhanced Station Initiative," which critics say prioritizes stations that are already in decent shape while doing little to improve wheelchair accessibility.
The inclusion of those two stations was decided "long before Lhota came back to the MTA [in June]," Weinstein said.
Nevertheless, good government and transit advocates warned against even the appearance of a conflict, particularly in light of the ongoing corruption trial of Joe Percoco, a longtime aide to Gov. Andrew Cuomo and a former Madison Square Garden executive himself.
"It would seem like a direct conflict of interest, given the power of the MTA chairman to influence decisions about MTA real estate holdings and spending and development for Penn Station and Farley Post Office," said John Kaehny, executive director of good government group Reinvent Albany. "I find it stunning that this was not discussed publicly by the board of directors of the MTA and publicly vetted for its appropriateness."
Advocates have, for years, argued that the only way to improve Penn Station is to relocate Madison Square Garden from its position above it. Madison Square Garden has resisted, as has Cuomo, who appointed Lhota to his position.
Recently, the governor has taken an interest of a different sort in Penn Station's plight.
In May, he created a "Penn Station Task Force" to consider the future of the complex and named Lhota to serve on it. It's unclear if it ever made any recommendations.
Cuomo is also turning the underutilized James A. Farley Post Office Building across the street from Penn Station into a train hall for Amtrak and Long Island Rail Road.
"Given that the MTA is going to be actively concerned with the future of Penn Station ... there needs to be a pretty active firewall between his role on the board of Madison Square Garden and his role at the MTA," said Nick Sifuentes, executive director of the Tri-State Transportation Campaign. "In practice, those firewalls can be pretty difficult to build and maintain."
There is also the question of Lhota's already constrained schedule.
In a recent interview with POLITICO, Lhota, 63, said he already spends 40 hours a week at NYU, and another 40 hours a week at the MTA. He says he sleeps just four hours a night.
"The [Madison Square Garden] commitment involves four board meetings per year," according to Weinstein. It's not clear how much prep time those meetings require.
The arrangement seems tailor-made to allow Lhota to keep earning seven figures while running the MTA, but in the recent interview, Lhota recoiled at the notion that he was motivated by any sort of financial imperative.
"It sounds grotesquely self-centered and ridiculous," Lhota said.
This is not the only area where the terms of Lhota's employment have raised concerns.
In November, good government group Common Cause asked the state's Authorities Budget Office to look into the circumstances of Lhota's employment at NYU Langone, for which he remained a registered lobbyist.
Lhota subsequently said the state's ethics board had vetted the situation. He shared his submission to the board with Common Cause New York Executive Director Susan Lerner, who declined to share it with POLITICO, citing confidentiality concerns. She did, however, criticize its contents.
"Mr. Lhota has structured his position to successfully insulate himself against violating the law," she said. "On paper, he is in compliance, although we cannot say how that functions in practice."
Joe Lhota
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