03/11/2005 12:00AM

CHRB starts to audit Jockeys' Guild finances


Auditors hired by the California Horse Racing Board have begun examining financial documents at the Jockeys' Guild in an effort to understand how the Guild manages approximately $1 million in funding each year from the state, a CHRB commissioner said on Friday.

Richard Shapiro, the commissioner, said that auditors began their work on Monday, about one month after guild officials agreed to the probe to address questions from the board. The questions were raised by Shapiro, other members of the board, and several disgruntled California riders earlier this year.

Shapiro said he had not received any preliminary reports from the auditors, who are working at the guild's offices in Monrovia, Calif., but said they were focusing on the guild's administrative expenses. California law provides funds from uncashed tickets to an organization representing the majority of riders in the state, an amount that typically totals $1 million a year. The law requires that the money be used for health benefits for California riders.

"Once we get all the information from the auditors, we'll be able to better understand why so much of the money goes to administrative expenses rather than benefits," Shapiro said.

He said the CHRB also intends to subject the financial statements to a forensic audit, which looks for illegal activity. The board has so far withheld payments to the guild, and Shapiro said the payments would continue to be held until both audits are complete - a process that could take several more months.

The guild has been embroiled in controversy since two jockey walkouts last year at two Midwestern tracks. Since then, several other organizations, including the Thoroughbred Racing Associations and Churchill Downs, have asked the guild to explain its financial statements, citing the guild's decision to drop an insurance policy in 2002 that had covered jockeys for up to $1 million in medical expenses.

In northern California, jockey Ron Warren has formed a splinter group to the guild in an effort to represent the majority of riders in the state and claim title to the funds from the uncashed tickets. Warren said this week that his group had signed up 37 jockeys in northern California, but said that efforts to expand to Southern California had encountered resistance from riders in that part of the state.

Warren also said that representatives of the Jockeys' Guild, including vice president Albert Fiss, met with the northern California jockeys last week in an effort to bring the group back into the fold. The riders rejected the guild's advances, Warren said, because of their dissatisfaction with how the organization is being run.

Fiss declined to comment on any issue on Friday afternoon.

Warren's effort is being complicated by the law that awards the money to the organization representing "the majority" of riders in the state. California awards a three-year jockey's license to any person who rides in one race in the state. Last year, 333 riders were licensed in California, according to CHRB records, a number that includes jockeys who have ridden only a handful of races in California over the past three years.

The Jockeys' Guild claims to have about 1,300 members nationally, although it is unknown how many are considered California jockeys.

Shapiro had asked the state's attorney general for a clarification of the law, but said that the attorney general has not yet issued an opinion. Shapiro said, however, that the board does not intend to award the money to any group until both the audits and the representation issue are settled.

"I'm certainly not inclined to disperse any money if there are any remaining questions, and I definitely won't disperse any money if there is any question over who represents the majority of riders," Shapiro said. "We're going to hang on to the pot of gold. That seems to be the best way to get our questions answered."