04/30/2002 11:00PM

Waiver a key to HBPA inquiry

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In February, an affiliate of the National Horsemen's Benevolent and Protective Association received an anonymous phone call about Century Consultants. The caller, according to horsemen's officials, said that Century was founded by former National and Kentucky HBPA president Rick Hiles and that Century had received large payments from an Oklahoma company that also did business with the National HBPA during Hiles's tenure.

The affiliate president then made a call to Texas HBPA president John Roark. In response, Roark, a trial attorney who was elected National HBPA president in August 2001, started "nosing around," he said in a recent interview.

"This is the stuff that I do anyway for a living," said Roark, who defeated Hiles in 2001 for the HBPA presidency after narrowly losing the election to him in 1999. "And it sounded like something we needed to look into."

After Roark's informal review, the National HBPA last week began an inquiry into possible conflicts of interests concerning Hiles and other Century principals.

The National HBPA's inquiry has led to a related investigation at the Kentucky HBPA, where longtime executive director Marty Maline has been placed on administrative leave. Maline was also an officer in Century, as was former National and Kentucky HBPA general counsel Don Sturgill. Sturgill resigned both positions two weeks ago, but he said the resignations were unrelated to the investigations.

Hiles and Sturgill have denied any wrongdoing, citing a waiver of conflict-of-interest bylaws they received at the January 1999 HBPA convention. Maline has not commented publicly and did not return a phone call.

"I received permission from the board to do what I did, so I don't see what the problem is," Sturgill said on Wednesday. Hiles called the investigation "nothing but blowing smoke." Roark and Remi Bellocq, executive director of the HBPA, said they have no reason to believe that a crime had been committed. At stake, according to HBPA officials said, is the group's ability to continue as an industry leader.

"This is a critical juncture for us," Bellocq said Wednesday. "It's important for folks to understand that we do things in the open. I think there has been a preconceived notion that this is something that the National HBPA would have liked to have shoved under the rug. But that's not the case, and we need to show that."

Other HBPA officers said that Hiles breached the National HBPA's trust by failing to fulfill pledges to inform the HBPA's executive committee about Century's progress.

According to the Illinois Secretary of State's office, Century Consultants was incorporated in Illinois in August 1999. Hiles was president of the company, and Maline was secretary-treasurer. Sturgill was a stockholder, Sturgill said Wednesday.

According to Hiles and Sturgill, Century had one client, Choctaw Racing Services, a tribal-owned Oklahoma company. Choctaw was established to reach agreements with horsemen's groups that would allow tribal offtrack betting locations to take Thoroughbred simulcasts, racing officials said.

Hiles, the president of the National HBPA from August 1999 to August 2001, said that Century provided "consulting services on legal and simulcast matters" to Choctaw over the span of at least 18 months, from August 1999 to the end of 2001. Sturgill said that Choctaw paid Century $140,000 over that time.

At the same time, HBPA officials said, the tribal company was paying the National HBPA fees on its handle at the OTB sites for what many HBPA officials considered to be essentially the same services offered by Century. HBPA officials declined to say how much money they received from Choctaw, but one affiliate president said the amount was "hundreds of thousands of dollars." Choctaw, which is not being investigated, remains a client of the National HBPA.

According to HBPA officials who were present at the January convention, the waiver was approved for Century's officers only after Hiles agreed to "report any and all developments to the executive committee," one official said. Those reports, officers said, never came, leading affiliate presidents to complain that they never would have approved the waiver if they had known the extent of the company's relationship with Choctaw.

"They can say that there was something unclear about the waiver," said one HBPA official, "but there was nothing unclear about reporting back."