As a good friend and trusted HRI source said the other day, this is our government in action: Larry Schwartz, New York Governor David Paterson’s chief of staff, is the new and current Chairman of the New York City Off Track Betting Corporation.

In his first significant act, he appointed Greg Rayburn new NYC-OTB President and CEO Grey Rayburn after a 4-1 vote by the NYC-OTB Board of Directors. It’s not a stretch to think that he did so with the blessing of the state’s chief executive.

And since City-OTB is now a ward of the state, that means the process of finding new leadership for the beleaguered corporation was pretty much business as usual.

To be completely fair, however, Rayburn deserves the benefit of the doubt. He just might be able to lead NYC-OTB out of bankruptcy and ultimately achieve a good result. He’s done it before, this “turnaround pro,” so dubbed by the Wall Street Journal.

Rayburn’s portfolio includes terms as both CEO and COO of several corporations. He also had a cup of coffee as interim CEO of Magna Entertainment Corp., where he reported to Frank Stronach.

As a full time CEO at troubled mainstream corporations, Rayburn implemented new models and did plenty of streamlining. Figure that there will more job cutting at NYC-OTB straight away.

City OTB already has cut 30 percent of its workforce and is even down to about only 50 company cars in its fleet. Amazing what can be accomplished when nose is applied to grindstone.

If it were my responsibility, I’d be inclined to give Rayburn this chance, too. His specialty is restructuring bankrupt companies. Any man who can reorganize Magna, allow Stronach to remain in charge and retain his flagships Santa Anita and Gulfstream Park, deserves a crack at the OTB mess.

Even in the real world of the Great Recession, $125,000 a month is probably commensurate with the task. However, NYC-OTB is light years from the real world.

Frankly, this kind of money for a chief executive whose company is shorting the New York Racing Association--which provides OTB with its most popular product--$2-million a month, and owes it $20 million-plus, is beyond the pale.

What’s really obscene, however, was the manner in which the appointment was handled by Board Chairman Schwartz and three other two-legged rubber stamps in the board meeting at which Rayburn was nominated and approved.

The only NYC-OTB board member who lived up to his fiduciary responsibility was Steven Newman, a State Assembly appointee. Newman suggested a two-month trial period in which Rayburn’s restructuring plan could be evaluated before making the appointment permanent.

Newman, who favors merging the NYRA with all six of the state’s OTB, pointed out that Rayburn will make as much money in six weeks as outgoing President Ray Casey made in a year.

[You can watch Wednesday’s entire meeting, which took all of 13 minutes].

Parenthetically, Rayburn will earn as much as Neil Getnick gets from NYRA. Getnick is the red herring creator that helped save the NYRA franchise by taking the focus off corruption and shining a light on security issues, both real and imagined.

Getnick’s firm, along with NYRA security, monitors the controversial, largely unpopular, and questionably functional detention barns.

NYRA Chairman Steven Duncker applauded the appointment, saying he fully supports it, citing Rayburn’s experience at implementing viable reorganization plans. NYRA is NYC-OTB’s largest creditor.

Here’s hoping that Rayburn is worth every penny. He likely will start by implementing some of the recommendations made by Sandy Frucher, the Board Chairman who Schwartz replaced.

Frucher proposed that numerous betting shops be closed [none to date] and replaced by self-service betting machines in mainstream venues such as sports bars. Newman later said that he hopes that’s exactly what Rayburn will do.

While it’s not a novel idea, Newman wants to see elimination of redundancies, especially in the area of contract services for phone, tote and advanced deposit wagering operations.

It will be interesting to see if this proposed streamlining will include continuing to pay retail prices for consulting services and public relations, or whether those practices will be eliminated entirely.

Since November of 2009, OTB has been billed nearly a half-million dollars by a high-powered PR firm, absurd given the present reality. So, to paraphrase the great sage, Sarah Palin, “how’s that imag-ee thing been workin’ out for ya’?”