Updated on 03/23/2011 5:53PM

Thoroughbred Retirement Foundation: Strains with Mellon estate overshadow key issues for horses


LEXINGTON, Ky. – When The New York Times printed a front-page story last week describing cases of malnourished horses at Thoroughbred Retirement Foundation-sponsored farms, supporters and critics of the nation’s largest Thoroughbred retirement program asked, “What went wrong?” Interviews over the last few days with TRF board leaders and executors of the Mellon estate, the TRF’s biggest benefactor, reveal a charity that has been struggling on several levels: raising funds for an aging, 1,200-horse herd during a severe economic downturn, improving financial and herd oversight, and repairing a deeply strained relationship with Mellon. The last factor has clouded the most important question: How are the horses?

The answer isn’t clear yet. Both the TRF and the Mellon executors say they are waiting for a detailed herd evaluation by Dr. Stacey Huntington, a Missouri veterinarian that both sides agreed to engage to evaluate all horses under the TRF’s care.

According to TRF chairman Tom Ludt and Mellon executors Beverly Carter and Ted Terry, the TRF board and the Mellon estate agreed to pay for Huntington’s evaluations, and the TRF agreed to the estate’s request that the TRF not be shown the results of the herd survey until the entire investigation was complete. Ludt said the herd evaluation marked renewed cooperation after five years of deteriorating relationships between Mellon and the TRF.

“The executors approached me and told me, ‘We believe this board is different, and we want to get this cleaned up. We believe you have the mission at heart,’” Ludt said. “The TRF board was very excited about getting a complete herd evaluation. She was uncovering issues that were news to our very limited staff and to a board that doesn’t visit these places. We’ve aggressively and very promptly been dealing with those issues.”

But Carter and Terry say Huntington’s findings so far have only deepened their concern about TRF’s financial management.

Citing interviews and inspection reports, Times reporter Joe Drape wrote that “some 25 percent of the horses have required some kind of urgent care.” On a single farm in Oklahoma with 47 TRF horses, the article said, “[m]any of those were starving” while 34 others at a Kentucky location “were found in ‘poor’ or ‘emaciated’ condition.” The article detailed complaints from several satellite farm owners that the TRF required them to cut costs to $3 per horse per day and threatened to remove its horses unless the farms could accomplish those cuts.

The article did not provide the horses’ ages, and Ludt and subsequent reports have noted that several of the horses were in their early to late 20s and were more likely to be in poorer condition, especially during an exceptionally hard winter.

Contacted Monday by Daily Racing Form, Huntington declined to comment in detail on her findings, saying she was just now turning in her reports to the TRF and Mellon. Asked whether the problems were widespread or occasional, she said, “Not widespread. Some problems, but not widespread. Some things that just need to be taken care of.”

Huntington said she evaluated 857 horses at 19 TRF facilities. The TRF operates or provides funds for about 30 facilities, Ludt said. TRF board members contend the Times mischaracterized and sensationalized the situation. Days after the article appeared, the TRF ended its association with Huntington.

“Because she’s chosen not to cooperate with a board that wants to do the right thing, we felt it was in our best interests to inform our satellite farms of her lack of cooperation, and they didn’t need to cooperate with her coming on the farms if they chose not to,” Ludt said.

Ludt says the group intends to complete the herd evaluation with other veterinarians.

Mellon executors Carter and Terry say the only reports they have received from Huntington thus far were emergency reports from her evaluations. Carter said she could not confirm the Times estimate that 25 percent of the horses required such care.

Asked to describe the emergency conditions, Carter noted a horse with an abscess on the jaw, horses needing their teeth floated (filing down rough edges), and cracked hooves.

“There were places where the farrier work had not been done for such a long time that, as I understand, unless you keep them filed, the hooves get long and break and crack, and that was evidently an emergency,” Carter said. “But, of course, the biggest emergency was when they were just so emaciated from not having enough food.”

The most-cited cases of malnutrition were at 4-H Farm in Oklahoma. According to the Times, farm owners Alan and Janice Hudgins refused to let Huntington on the property until TRF paid $20,000 toward their costs of caring for 63 horses there since 2005. The Times reported that once allowed onto the property the evaluating vets found 47 malnourished TRF horses and concluded the 16 others had died of starvation.

Ludt said that the Hudginses had 63 TRF horses originally but that 16 had died of natural causes or been euthanized. The remaining TRF horses have since been relocated. “There are no missing horses to the best of our knowledge,” Ludt said.

Alerted to e-mails from Huntington about some horses’ conditions, Ludt said, the TRF board called a meeting in Baltimore in early February. “I asked the executors to attend because I thought it would be good for the board to meet them,” Ludt said. “They chose not to attend. I asked Bev Carter and Ted Terry if they would serve on the board, and they declined.”

Back in 2001, the TRF appeared to be thriving. The Mellon estate endowment, which has since grown to an estimated worth of $7 million, allows TRF to access only 5 percent of funds annually, providing a funding base of about $350,000 annually. Within two years, the charity also had begun limited adoptions of retirees sound enough to take on second careers. The group’s prison programs, in which selected inmates cared for TRF horses who were pasture-sound, received positive news coverage.

But Thoroughbred foal crops were on the rise, and the TRF’s horse population was growing. Between 2001 and 2007, the TRF herd swelled from 300 to 1,200 horses.

Today, the endowment’s $350,000 contribution covers about 12 percent of the TRF’s total annual funding needs, according to both TRF and Mellon. By 2005, Carter said, the Mellon estate was beginning to have doubts about the TRF’s financial course.

“We have been voicing concern since 2005, when they were over 1,200 horses, and we have been voicing concerns on a consistent basis since that time,” Carter said, adding that she did not know whether her concerns were voiced to the entire TRF board at the time.

The TRF board has changed markedly since 2005. Current and past directors say a 2007 debate over the TRF’s future, including the role of then-executive director Diana Pikulski, sparked a boardroom battle that prompted the departure of six board members, including former president John Stuart and prominent anti-slaughter advocate John Hettinger. Among their concerns were that herd costs were outrunning contributions. Since then, Ludt says, a group of new board members – including Ludt, equine surgeon Dr. Patty Hogan, Lansdon Robbins, Hayward Pressman, and Ray Paulick – have committed to right the ship.

Last July, the TRF announced a restructuring, including the hiring of a CEO, Larry Taylor, since was let go due to financial considerations, Ludt said. They have cut at least four positions.

Some board members also have loaned the charity money, including current treasurer John Rainey, who has loaned about $285,000 since 2009. The Mellon endowment also loaned the TRF $500,000 in recent years.

In 2009, according to latest available public tax filings, the TRF had a $1.2 million deficit after taking in $1,855,501 and paying out $3,075,598, including $497,054 in salaries, compensation, and employee benefits.

In 2010, longtime executive director Diana Pikulski voluntarily reduced her salary from $95,000 to $85,000. As of February 2011, she is no longer a salaried employee but receives $72,000 a year as an independent contractor fundraiser, according to TRF treasurer Rainey, and she pays her own expenses.

Ludt said the majority of the salary expanses are paid to farm managers at TRF facilities. The TRF’s largest expense is for boarding horses, which totaled $1,328,013 in 2009. Ludt and treasurer Rainey say the TRF is current through 2010 on boarding payments.

“It’s problematic when you have so many horses to care for, and the money’s not there to do it,” Carter said.

The Mellon executors and TRF’s Ludt agree on that point.

“We’re dealing with this to the best of our ability,” Ludt said. “We’re hoping people will read the whole story and not a slanted one, and that will ultimately help this organization and the horses.”