Updated on 09/17/2011 11:45PM

Jockeys' Guild ousts Gertmenian

L. Wayne Gertmenian's (above) controversial tenure as chief executive ended Tuesday. John Velazquez was elected guild chairman.

LEXINGTON, Ky. - A newly appointed board of directors of the Jockeys' Guild voted on Tuesday to fire the guild's controversial chief executive, L. Wayne Gertmenian, and his management company, Matrix Capital Associates, effective immediately, according to a statement issued by the board.

Gertmenian will be replaced on a temporary basis by Darrell Haire, the statement said. Haire, a guild regional representative for the past six years, was hired by the guild's former national manager, John Giovanni, in 1999 after Haire's retirement as a rider. The vote total of the nine-member board to dismiss Gertmenian was not disclosed.

The vote closed a tumultuous chapter in the history of the guild, which claims to represent more than 1,200 riders. Gertmenian, a tenured professor of economics at Pepperdine University, took over the group in the summer of 2001 with promises to revolutionize the way riders are represented, compensated, and insured. Since then, however, the guild's management has alienated many people in the racing industry and come under fire from many of its own members, racetrack officials, and even a Congressional subcommittee.

Clearly, Gertmenian's departure reflected the discontent among jockeys and their families over the guild's decision in 2002 not to renew a catastrophic insurance policy that would have covered riders for up to $1 million in medical bills. That decision did not become widely understood by guild members and industry officials until Gary Birzer, a 29-year-old jockey, was paralyzed from the middle of the back down in July 2004 in an accident at Mountaineer Park.

The vote to remove Gertmenian was engineered by representatives of the guild's 27-member senate, which is composed of the nine members of the board and 18 active riders. Two weeks ago, 11 members of the senate, including co-vice chairman John Velazquez, called for an emergency meeting to consider bylaw changes that would allow the senate to remove Gertmenian, who earned $165,000 a year in salary. Matrix Capital received approximately $335,000 a year from the guild.

During the Tuesday meeting, which was conducted via conference call, the senate approved a bylaw change allowing it to remove the current board, which included several staunch supporters of Gertmenian. The senate then voted to replace the board with nine new members, who voted to fire Gertmenian and terminate the guild's relationship with Matrix Capital and a number of Gertmenian's associates, including the guild's legal counsel, Lloyd Ownbey.

Velazquez, who was elected chairman during the meeting, said on Tuesday that the removal of Gertmenian and Matrix was only "one tiny step" toward restoring the group's credibility.

"We have a whole lot of work to do," Velazquez said. "We should know a lot more in a couple of weeks. We need to know where the guild stands, and right now, we don't know much. Hopefully we are eventually going to be able to sit at the same table as the racetracks and everyone else in the industry so that we can help out our riders and address the problems we have."

Velazquez said that it was impossible to determine the current financial condition of the guild, which derives the majority of its revenue from dues based on mount fees. According to documents collected from the guild by the Congressional subcommittee's staff, hundreds of guild members were in substantial arrears on payments to the insurance fund as of March 1.

"We're going to look at the books and try to figure out where we are," Velazquez said. "I wish I could tell you something else, but we don't know anything."

Calls to the Jockeys' Guild's office in Monrovia, Calif., were not answered on Tuesday, and a message left at Gertmenian's home was not returned.

At a hearing a month ago in Washington, members of the House of Representatives Subcommittee on Oversight and Investigations were sharply critical of Gertmenian, including apparent inaccuracies on his resume that claimed high-ranking positions in the Nixon and Ford administrations, which could not be verified. One member, Joe Barton, a Republican from Texas, urged guild members to replace Gertmenian, calling him an "absolute disgrace."

Although Gertmenian had been the target of some criticism since taking over the guild, it wasn't until after the hearing that his opponents came together. Jockeys who had reserved comment on Gertmenian began considering calls for his resignation, including Jeff Johnston, the guild's treasurer.

Johnston was one of five guild directors who kept his seat on Tuesday. The others were Velazquez, Tomey Jean Swan, G. R. Carter, and Larry Reynolds. The four new members elected were Jon Court, Jerry LaSala, Mike Luzzi, and Alex Solis. They replaced David Shepherd, the board's former chairman; Casey Lambert; Abad Cabassa Jr.; and Brian Peck.

Gertmenian was brought into the guild in 2001 by several members of the guild's board, including Chris McCarron and Robert Colton. Both have since resigned from the guild and distanced themselves from Gertmenian. During the recent congressional hearing, McCarron called his support for Gertmenian "the biggest mistake I have ever made." Colton, a retired jockey who worked for Gertmenian at the guild offices for a brief period in 2003, later became one of the most outspoken critics of Gertmenian.

Despite the divisive atmosphere Gertmenian helped to create during his tenure, some of his calls for reform have been met by the racing industry. In 2004, for example, many racetracks increased their accident insurance policies from $100,000 in coverage for medical bills to $1 million in coverage, partly in response to an outcry created by the guild's decision to allow its own catastrophic insurance policy to lapse.

In addition, following the Congressional hearing, several Democratic members of the subcommittee sent a letter to the chairman of the National Labor Relations Board urging the board to consider allowing jockeys to conduct collective bargaining negotiations with racetracks. Gertmenian has called for such power despite questions over whether jockeys could ever be represented by a union because of their status as independent contractors.

The guild's actions Tuesday preceded by two days the Congressional subcommittee's next hearing into riders' insurance issues. On Thursday, the subcommittee has invited representatives of racetracks and industry organizations to testify, in a hearing that will likely focus on the responsibilities of racetracks to provide safe working environments and insurance coverage to jockeys and exercise riders.