Churchill asks Jockeys' Guild to account for funds

Churchill Downs Inc. has sent a letter to the Jockeys' Guild requesting information on what the Guild has done with millions of dollars paid by racetracks to the organization over the last several years.

The letter, signed by Churchill president Steve Sexton, claims that Churchill's racetracks have paid the Guild "more than $375,000 annually" over the past two years as part of a $2.2 million payment from racetracks each year. The payments, based on the number of mounts at racetracks, have been made to the Guild in exchange for the jockeys giving up their claims to media rights for simulcasting purposes.

The Guild had previously used a portion of the money paid by the tracks to purchase a supplemental insurance policy covering jockeys for up to $1 million in medical bills in the case of an accident on the racetrack. The Guild's management let the policy lapse in 2002, one year after the Guild was taken over by Matrix Capital Associates, a consulting company owned by L. Wayne Gertmenian, the Guild's current president.

"Considering the amount of money given to the Guild each year by racetracks - and through annual dues and per mount fees paid by your membership - we are hoping you will explain why the Guild no longer purchases this additional on-track coverage," Sexton wrote.

The letter asks the Guild to provide an answer by Dec. 7 and requests that the response be certified by an independent accountant.

Earlier in November, a total of 28 riders at two of Churchill's tracks, Churchill Downs and Hoosier Park, were banned for the remainder of the two tracks' meets after the jockeys refused to ride, citing insurance and safety concerns. Two Guild officials, Albert Fiss and Darrell Haire, were in the jockeys room at Hoosier Park when the riders walked out 10 minutes before the first post. The card was canceled.

The Guild is scheduled to begin an annual meeting of its membership Dec. 6 in Irving, Texas. The meeting will take place over two days.

The Guild has been embroiled in several controversies the past month. A member of the Guild's board of directors, the rider Kent Desormeaux, said two weeks ago that he had begun an inquiry into the Guild's finances and Gertmenian's qualifications as Guild president, after questions were raised over the accuracy of statements on Gertmenian's resume.

The resume, which was posted on the website of Pepperdine University, where Gertmenian is a tenured professor, claimed that Gertmenian held high-ranking positions in the Nixon and Ford administrations, but those positions could not be verified, along with several other positions described on the resume. A Pepperdine spokesperson, Lori Putnam, said earlier this week that Pepperdine has asked Gertmenian to clarify his resume, but Putnam said the university could not comment further because the inquiry is a "personnel matter."

The questions over the Guild's finances involve its use of a fund to make payments to disabled riders. In addition, financial forms filed by the Guild with the Department of Labor show that the Guild had $4.2 million in cash at the end of 2002, the year the insurance policy lapsed, up from $2.1 million at the beginning of the year. The policy cost about $450,000 a year, according to Guild statements.

The Guild has not filed its financial forms for 2003 to the Department of Labor, although the forms were due nine months ago.

Guild officials have declined to comment on any of the financial matters or on Gertmenian's resume.

Desormeaux has said that he hoped to complete his inquiry before the Guild's annual meeting in order to present the results to the membership.