The Belmont Stakes Blue Ribbon Analysis is up on the Horse Racing Page.
Recent media coverage of horse racing is starting to feel like beach erosion. Once it starts, it doesn’t get any better – ever.
The large number of fatalities at Santa Anita Park in the first three months of the year was, understandably, the most dramatic and important story. There were 23 horses who were fatally injured while racing or training at Santa Anita’s tracks after it opened for its annual winter meet on December 26.
Then there was the controversy over the disqualification of Maximum Security who crossed the finish line first in the Kentucky Derby, but interfered with several other entrants including, most significantly, War of Will. While the stewards made what, in my opinion, was the correct decision, the sub rosa suspicions did nothing to increase confidence in the integrity of the sport.
When War of Will came back to win the Preakness, the non-racing media’s lead was that of Bodexpress tossing his rider at the gate and continuing to run. This was a remarkable event only to those who have not seen many races. That both the Derby interference and a loose horse in the Preakness could have resulted in serious injuries to both horses and riders did not seem to be a factor in the national spotlight.
To top it off there was HBO’s Real Sports segment on horse racing last week. It is not a program I watch, and have only seen this one and the one they did five years ago following PETA’s complaints about the Steve Asmussen barn. This look at racing every five years was a sickening and horrific look at what are, undoubtedly, some of racing’s worst moments.
As one who follows closely racing, politics and their intersection, I cannot think of a more perilous time for racing’s survival – and I am not talking long-term. The rash of deaths at Santa Anita resulted in leading political figures and the Los Angeles Times calling for the suspension of racing at one of the sport’s most prominent venues. Santa Anita officials did just that in an effort to determine if they could pinpoint the cause of the fatalities. They have not yet, and returned with a remarkable period of no catastrophic injuries for six weeks, but now experienced three in a recent nine-day span.
It is disturbing, albeit predictable, that new fatalities have caused both Senator Dianne Feinstein and The Los Angeles Times to renew their calls to suspend racing until the reason for the fatalities has been determined. California Governor Gavin Newsom recently added his voice in endorsing a number of proposed reforms in the state: “The recent horse fatalities in California are unacceptable. We must hold the horse racing industry to account.”
There are not many certainties in politics, and politicians have been known, to put it mildly, to change their positions. But when an elected official takes a stand on an issue that is emotionally charged, they are less likely to back down and will want to see their concerns addressed.
There is no national voice to counter the assault on the sport’s integrity and value. There are many respected figures in racing, and there are many organizations. Unfortunately, no individual can speak for the industry, and the national organizations are not only useless, but often downright embarrassing.
Groups such as the National Thoroughbred Racing Association, the National Horsemen’s Benevolent Protective Association and the Association of Racing Commissioners International continue to respond to negative press with the same tired tropes that are easily disprovable or facially ludicrous. Despite years of repeating the same responses, it has obviously had no impact.
The first is the low rate of horses testing positive for illegal levels of medications in post-race tests. The rate is a fraction of less than one percent. That’s partially because testing is only for a limited amount of drugs because the cost of a more extensive regimen is, according to regulators, prohibitive. There is also a wide range of drugs for which there is either no test or violators are adept at hiding their traces.
The second is the claim that racing has “one of the most stringent post-race drug testing programs in any professional sport,” as stated by NTRA’s CEO in response to the Real Sports segment. We literally have to go back 41 years to the drug disqualification of Kentucky Derby winner Dancer’s Image to find a horse of equivalent stature to a Lance Armstrong or Robinson Cano penalized for a drug positive.
The key phrase, however, is “post-race drug testing.” When racing authorities in the United States get serious about drugs, they will emulate Europe and Hong Kong and have a meaningful program of Out-of-Competition Testing. California has promised to strengthen their program. New York’s program is virtually non-existent for thoroughbreds.
Then we have the “those questioning the devotion of horse people to their equine athletes need only to spend a morning walking barns to have such concerns alleviated” line, also from NTRA’s CEO. Well, I have spent hundreds of hours on backstretches and taken thousands of photographs. I have the utmost respect for the hundreds of devoted horse people I have encountered (many of whom are Latino or Latina) who work long hours, often at low pay, and clearly love horses. I could swear under oath I have never seen a horse mistreated.
I also have visited banks thousands of times and never seen a robbery or a bank executive committing fraud. I would swear that under oath as well. That only means that those committed to wrongdoing will do it out of the public eye.
One of the most remarkable refutations of this “feel good” narrative, however, comes from the Association of Racing Commissioners International. It’s remarkable because of its tone-deaf inability to see one step ahead, let alone several. Let’s just quote from the group’s May 6 press release:
“All racing regulatory commissions have been put on notice that the banning of voluntary race day furosemide (Lasix) … is expected to encourage a return to practices deemed cruel, inhumane, or potentially dangerous to the health and welfare of a horse. …
Last Friday, the RCI advised Regulatory Commissions to be on the lookout for horses being given intravenous formaldehyde to combat potential incidents of bleeding. …
The ARCI also advised commissions that it is anticipated that some horsemen will return to a practice … [that] denies a horse food and water for twenty-four to thirty-six hours prior to a race.”
So if you are going to see how well horses are treated, avoid those barns starving horses or injecting formaldehyde.
To complete their superfecta of ridiculous defenses, the national groups and their spokespeople also blame the media and those in the industry who, they portray, as negative voices seeking to harm the sport. Blaming the messenger is never a long-term strategy, and impugning the integrity of many who have devoted their lives to the sport because they seek improvement is as short-sighted.
There are many positive steps being taken to improve the safety of both the horses and the humans who get on their backs. The Stronach Group’s Belinda Stronach announced a number of significant reforms to address both possible causes of the fatalities and public perception problems in March, many of which were supported in Gavin Newsom’s statement. There is also federal legislation that would put a national body in charge of administering anti-drug policies, the United States Anti-Doping Agency.
The most publicized reforms have to do with phasing out race-day Lasix and the use of the whip. While neither may have caused any of the catastrophic injuries, anyone who has spoken with a non-racing fan realizes that these are important perception issues. And to be clear, the discussion has gone beyond attracting new fans to the sport. We need to prevent those non-fans from advocating the abolition of all racing.
The Rip Van Winkles leading the national racing organizations may not wake up in time to realize that their strategies are both useless and counter-productive. They need to take serious steps to embrace meaningful reform. Washington Post sports reporter Sally Jenkins recently wrote a devastating piece:
“Thoroughbred racing, more than all other sports, confronts the human participants with their own characters. In any other game, you’re responsible only for yourself. But racing is all about the handling of the horses: At the heart of the contest is the matter of trust, the sacred obligation to do decently and right by reliant creatures. It is the thinnest of lines between a meaningful pursuit and an abuse. The minute a horse’s best advocate is a Washington politician is the minute that line has been crossed.”
There is a tipping point at which the impetus to abolish racing becomes an irreversible inevitability. We are quickly approaching that point. Maintaining a snail’s pace of progress is no longer going to be sufficient to keep racing going. The time for urgency is now, and not when it will be too late.
The famed Blue Ribbon Analysis is up on the Horse Racing page.
The Blue Ribbon Derby Analysis is up on the Horse Racing page.
When the rash of horse fatalities at Santa Anita in the first months of this year led the track’s owner to announce revolutionary steps to improve both safety and the perception of racing, many hoped this would break the logjam of opposition to any meaningful change in the racing industry. But as New York’s racing regulatory body demonstrated this week, don’t look for them to take a leadership role.
Twenty-three horses died while racing or training during the first three months of the Santa Anita winter meet. While it has yet to be determined what caused the fatalities, Belinda Stronach, head of The Stronach Group that owns and runs the track, announced sweeping reforms that have upended the national discussion on equine safety. (Although we often use the phrase “equine safety,” we should never lose sight of the fact that when a horse goes down, there is a human on its back who can also suffer a devastating injury.)
The most controversial of her proposed changes are restrictions on the use of the whip, and a ban on Lasix, the diuretic medication that is permitted in all states and is the only drug that can be administered legally on race day. While many people in the “outside” world are either sickened or surprised to learn that both whips and drugs are commonplace in racing, racing’s insiders will not be surprised to learn that on Kentucky Oaks and Kentucky Derby days – two of the sport’s premier events – a grand total of three horses in the 27 races will not be on Lasix.
New York, along with Kentucky and California, is one of the country’s premier racing jurisdictions. Whether it would join the ranks of those realizing that the sport needed a massive overhaul of its perception among the general public, or side with the entrenched interests seeking to obstruct meaningful change, its Gaming Commission meeting on Monday answered, “we’re sticking with the status quo.”
The Commission’s Executive Director ran through a comparison of proposals by The Stronach Group with the situation in New York. Where TSG called for an increased program of Out-of-Competition Testing, the New York response was, essentially, “we do that also.” As I have documented in the past, New York’s program is so anemic that in two periods covering several years, it never identified a thoroughbred testing positive for a prohibited substance.
In what is one of the most significant proposals from California, TSG is proposing complete transparency on veterinary records, including the transfer of records to a new barn. New York responded with its policy in which one type of treatment is sent to a barn claiming a horse. While this has not received the attention I think it deserves, the overuse of legal medications is potentially a major scandal, and one that transparency of vet records would uncover.
Use of the whip? The Gaming Commission has previously talked about it and is “still studying” possible changes.
The Commission is also going to study its position on race-day Lasix. The New York Racing Association that conduct racing at the state’s major thoroughbred tracks has signed on with a coalition that is proposing a significantly watered-down version of TSG’s outright ban (albeit one that will be implemented gradually). The Coalition is proposing no Lasix in two-year-old races or in higher level stakes races. For the vast majority of races, there would be no change.
The Coalition proposal is half-baked. If the reason for permitting Lasix is a concern for equine safety, why would it not be permitted for the more valuable horses – the stakes horses and two-year-olds? But I doubt the Commission will ever get to approving the change. The state’s Equine Medical Director, Scott Palmer, DVM, has already thrown cold water on the proposal, and this is a Commission that meekly follows Palmer’s advice.
New York’s Gaming Commission may actually be the best advertisement for the importance of having a national body overseeing medication rules and discipline for violations. I do not think a single member of the Commission knows anything about horse racing. That is not hyperbole; I mean it literally.
My opinion is based on years of observing their meetings. They almost never discuss anything. They operate in secrecy. The total “conversation” comparing California’s proposed changes with New York took all of four minutes (and there was not a single comment). The Lasix conversation lasted five minutes. By contrast, California’s Horse Racing Board is comprised of knowledgeable individuals who engage in robust discussions. They even allow members of the public – you know, taxpayers – to participate.
The simple reality is that the Gaming Commission is not going to be a factor in any national conversation. The leading figure in New York on reforms to racing is Congressman Paul Tonko, co-author of the Horseracing Integrity Act 0f 2019. The leadership of the horse racing community has yet to produce its own voice in favor of reform. It is an embarrassing indictment on the lack of leadership in this state.
Thoroughbred racing is facing its latest crisis as a result of a large number of fatalities at Santa Anita Park. Since its current meet began on December 26, 23 horses have been fatally injured while racing or training. The Stronach Group that owns and operates Santa Anita responded with measures that are revolutionary in a business that typically moves with the speed of a slow-moving glacier. They are adopting “house rules” that will prohibit the use of the whip except when needed as a safety measure, and also gradually ban the race-day medication Lasix. Other medications that are permissible will be subject to stricter standards.
As significant as these changes are, the real story is whether this crisis is the one that will ultimately end the sport. It is more than a public relations crisis, and is increasingly being viewed as an existential one.
Some people – OK, most people – undoubtedly view the prohibition on whipping an animal and administering drugs to that animal so that it can race as no-brainers. That is, if they are not shocked that both practices are currently allowed in all racing jurisdictions in the United States.
California’s racing leaders are seriously concerned that a ballot initiative could ban racing in the state. One statistic I saw is that placing a measure on the state-wide ballot requires 600,000 signatures and that PETA, a leader in protests over the fatalities, has 700,000 members in California. Senator Diane Feinstein and Congressperson Judy Chu (who represents the district including Santa Anita) have both expressed serious reservations about the state of racing. According to Bill Finley in Thoroughbred Daily News, the Los Angeles Times has called for racing to be suspended until the track determines the causes of the fatalities.
Unfortunately, that same sense of urgency – and, I would suggest, reality – does not apply to other influential voices in the racing industry.
There are the national and local organizations representing trainers and owners. When these modern-day Rip Van Winkles finally wake up, there may no longer be a sport of horse racing. The National Horsemen’s Benevolent and Protective Association (HBPA) held its national convention in mid-March as the crisis at Santa Anita was coming to a head. If you listened to them, you would think the key to bringing in new fans and increasing handle was not in changing a broad-based negative perception, but in providing free past performance data. I did not see a single media account of any discussion of the situation in California.
It’s not surprising that this group did not want to discuss the reality of what is going on at Santa Anita. They are in the forefront of the denialism that racing has a significant perception problem caused by the use of drugs. In written testimony for a Congressional hearing on proposed federal legislation last June, Eric Hamelback, CEO of the National HBPA, stated:
“The support for [the federal legislation] comes from a well-financed vocal minority of owners and trainers … who claim ‘the fragmented system of medication regulation is not working.’ The implication here is that the result is widespread illegal drug use or ‘cheating.’ However, those who make that claim offer no evidence to support the notion of rampant illegal drug use. That is no surprise because there is none that I know of….
Any asserted problem is one of misperception caused by recurrent sensationalism in the public media….
Horse racing in the United States has the most comprehensive testing program of any sport in the world and employs the most sophisticated and sensitive equipment found anywhere….
… 99.5% of over 354,000 tests of biological samples taken from thoroughbred race horses were negative for drug use…. these results should be the envy of every other sport that tests athletes for drugs….”
There’s a lot to unpack in that brief excerpt. For starters, the notion that horse racing has the most sophisticated testing that “should be the envy of every other sport” is downright ludicrous. When a horse of the stature of a Lance Armstrong, Ben Johnson, Robinson Cano or Julian Edelman is sanctioned for illegal drug use we might give some credence to Hamelback’s hyperbole.
The “99.5 per cent” figure is regularly used by the denialists to prove the sport is clean. I do not dispute that is an accurate number, but it is so high because there are a number of drugs that cannot be detected by the supposedly “sophisticated” testing of Hamelback’s imagination.
The racing media has been filled recently with articles about bisphosphonate. I had not heard of this one until a couple of weeks ago when the mid-Atlantic tracks and sales companies started restricting its usage. According to Dr. Rick Arthur, California’s Equine Medical Director, it does not have a legitimate therapeutic use at a track. The concern, however, is that it can be used on younger horses going through a sale to hide radiographic evidence of a bone issue. Nice, right, for an industry seeking to convince folks there is nothing to see here? While sales companies say a horse testing positive for bisphosphonates can be returned, there is not yet a reliable test when the drug is administered sufficiently far in advance of the sale. So I guess there would be a 100% rate of sales horses testing negative for bisphosphonates.
Then there is Hamelback’s argument that the “well-financed” proponents of federal legislation are implying that there is “widespread” and “rampant” cheating. I am not aware of any responsible person associated with racing saying there is “rampant” cheating. But I have also never met an owner, trainer, track worker, race track employee or fan who does not believe there is cheating. The widespread perception that cheating is a regular feature of racing, even if limited, is devastating.
Finally, there are the well-worn tropes that “the media” is responsible for the negative perceptions and that “we need to do a better job of educating the public.” Ed Martin, President of the Association of Racing Commissioners International laments that all the money spent on, among others, “bloggers” could be better devoted to research. (I take particular umbrage at that one since I have not seen the largesse.) The difficulty, however, lies in convincing the public that whipping a horse or giving it drugs so it can race are actions inspired by a love for the animal.
We do not know if the causes of any of the Santa Anita fatalities are related to drugs. From what I know of Lasix, it would be astonishing if the diuretic was the direct cause of any fatalities, let alone 23 of them. But The Stronach Group’s announcement of a ban had less to do with a possible cause for the fatalities, and more to do with a perception that race-day medications are harming the sport, if not the horse.
The use of drugs in horse racing is more complicated than whether race-day medications should be permitted. I think there are three categories into which drugs can be grouped.
The first – and easiest to deal with – are drugs that have no therapeutic value and are only used because of performance-enhancing aspects or to mask pain in the horse. Out-of-Competition Testing is intended to identify these substances. But if a state such as New York doesn’t take it seriously, abuse is likely to be more widespread. New York doesn’t even track the results of whatever testing it does, and in response to a public records request covering periods of several years, could not identify a single thoroughbred testing positive. Charles Hayward, who just wrote an excellent piece on the medication issue for Thoroughbred Racing Commentary pointed out that California has no penalties for violations.
The second group consists of Lasix. It is the only medication approved in every racing jurisdiction in the United States for use on the day of a race, but is illegal in every other country with racing. Its stated purpose is to prevent Exercise-Induced Pulmonary Hemorrhaging – more commonly referred to as “bleeding.” Regulations typically require that a veterinarian must establish that a horse bled in order for it to be given the medication. The reality is that it is a rule observed more in its breach than its observance. I have had a vet recommend Lasix even though there was no indication the horse bled. And the reality is that approximately 95 per cent of the horses on a given race card are being given the drug.
The other reality is that it is a performance-enhancing drug. It causes a horse to lose some 20 pounds in weight because of its diuretic effect. If weight is not an important factor in racing, we would not give a weight break to apprentice jockeys, nor have “handicap” races in which horses are assigned different weights based on expected performance. Even those owners and trainers expressing public opposition to Lasix continue to administer it to their own horses so as not to lose what is widely acknowledged as an “advantage.”
The third category is the one that I think would be much more troubling than the use of Lasix but for the fact there is no data on usage. These are legal and permissible therapeutic medications. Racing deals with this category by specifying withdrawal times before a race and levels of concentration during a post-race test below which there is no violation. Thus, New York prohibits the administration of butorphanol within 96 hours of a race, and a concentration level below 300 ng/ml in a post-race test carries no penalty.
A horse, of course, can experience any number of ailments for which a medication may be an essential treatment. Standards of veterinary care require that the ailment be diagnosed and treatment recommended by a vet who has examined the animal. The problem arises when the “legal” drug continues to be administered even after the need for it no longer exists. There are two examples in recent years in which this has been abundantly clear.
The New York Gaming Commission publishes three days of veterinary records immediately before Grade I races having a purse of $1 million or more. In the first year of the Commission making these results available, there was a remarkable situation. One high-profile trainer who had numerous horses entered in such races administered the same drug, with the same dosage, for every one of his horses every day. It of course defies common sense that this was the result of a vet examining the horse, finding that each had the same condition, and then prescribing the same medication. I must not have been the only person noticing this seeming anomaly because in subsequent years the practice stopped.
In the other example, a high-profile trainer’s horse was “featured” in a New York Times article because he was one of the fatalities at Aqueduct in 2011-12 that was their own crisis of equine deaths. The accompanying article stated the gelding experienced pain and cartilage damage from a degenerative joint disease, and had been injected 13 times in the month before the race to treat that condition, including an injection into a joint five days before the race. Again, this was a “legal” drug administered within “legal” restrictions. It is, however, a medication that if administered in the described manner meant the horse had no business on a race track. (New York has since tightened its regulations on joint injections.)
Are there other examples today of similarly horrifying stories? Of course there are, unless you are a hopeless naïf or the head of an organization such as the National HBPA or ARCI. Is racing taking steps to improve the situation? They are. In the examples just cited, New York required reports that resulted in identifying one problem and took corrective actions following the other. Is the progress sufficient? Not if you are a horse or a jockey – or a member of the general public.
And there are those whose awareness of racing’s current environment are as clueless as that of Rip Van Winkle upon awakening. Veterinarian Jeff Blea commented that Santa Anita field sizes have been down in recent weeks because of the crisis:
“Trainers are doing their jobs. Veterinarians are doing their jobs. People aren’t wanting to push these horses and take those risks like they did before.”
Blea is Chair of the American Association of Equine Practitioners’ Racing Committee, quoted in Thoroughbred Daily News on April 20.
While one might expect that veterinarians would be in the forefront of safety initiatives, his approach is not dissimilar to that of New York’s Equine Medical Director Scott Palmer, DVM, who recently convinced New York’s Gaming Commission to weaken a safety regulation enacted after New York experienced its own crisis of track fatalities in 2011-12. Palmer acknowledged the increased risk to the horse (and jockey) but thought it could be offset by other measures.
Fortunately, there are industry figures who do not believe there is an acceptable level of horse deaths that will be acceptable to the public. The first, of course, is Belinda Stronach taking radical steps to address the negative perceptions heightened by the Santa Anita fatalities.
The reforms announced by The Stronach Group go well beyond the banning of race-day medications. But the Lasix ban prompted a coalition of other tracks to adopt their own restrictions on the diuretic, banning its use on two-year-olds in 2020 and in many stakes races starting in 2021. While many have praised this as a good first step, it sends an awkward message for a policy intended to address one of racing’s biggest perception problems: if race-day medication is not acceptable for stakes horses and babies, why is it permissible on the lesser horses who make up the vast majority of racehorses?
The Jockey Club is the “breed registry” for the U.S. and Canada, and also keeps valuable data bases on what is going on in the sport, as well as funding important health-related research. In the past month, they published their vision for comprehensive reform, available here, and must-reading for anyone concerned about the future of the sport.
The Jockey Club also supports the Horseracing Integrity Act of 2019, H.R. 1754, the current version of legislation that has been introduced in the last two Congresses. The bill would create a private and independent anti-doping authority for horse racing that would establish uniform national standards, overseen by the United States Anti-Doping Agency (USADA). The same industry entities leading the fight to keep Lasix also oppose national legislation to establish uniformity on medication policies within the states.
I think that anyone who wants to see racing survive and thrive should make their views known to their U.S. Senators and Members of Congress. Even if Santa Anita weathers this current crisis, there will be another, either there or elsewhere. It is foolhardy to think racing is guaranteed to go on indefinitely. Either racing can present a unified front on reform, or abolition efforts will take over. An institution that arrogantly thinks it can escape change is doomed to failure.
The New York Racing Association announced the sudden resignation of its President and CEO, Chris Kay, on January 23. Six weeks later, one of the government agencies responsible for monitoring NYRA had a brief discussion of the matter. It left more questions unanswered than addressed.
Neither NYRA nor either of two government bodies charged with oversight, the Franchise Oversight Board and the State Gaming Commission, have stated why Kay’s unanticipated resignation was compelled. David Grening of the Daily Racing Form reported that “according to multiple sources,” NYRA’s Board “asked for Kay’s resignation after it learned that Kay had used NYRA employees to do private work for him at the house he owns in Saratoga, considered a breach of company policy.”
I have never seen any denial or refutation of Grening’s reporting. At the March 7 meeting of the Oversight Board there was implicit confirmation of this being a reason for Kay’s termination. A NYRA executive also stated there were two additional disciplinary actions, including one of an unidentified Senior Vice President.
The approach of the Oversight Board appeared to have less to do with any meaningful oversight, but rather to get this matter behind them as quickly as possible with the hope that people would simply forget about it. When NYRA’s General Counsel was asked what caused this, he could not answer because he did not know the motivation of Kay “and others.” He added there was a “culture” at NYRA “where people were reluctant to report bad things.”
Kay’s motivation was obvious and, frankly, not all that important. He was getting stuff for free. And if there was such a culture at NYRA, it does not distinguish it from any other work place. It is also not a reason why the CEO would act with seeming impunity.
The real culture that caused this is the one that enabled Kay. There were theoretical checks on his conduct: he reported to a Board of Directors, and was answerable to two government oversight agencies, the Oversight Board and the Gaming Commission. But the sad history of these supposedly independent bodies is that only one individual in the six years of Kay’s tenure ever stood up to him. And that person resigned in the early part of 2017.
The NYRA Board of Directors became subject to the public records law and open meeting law once Andrew Cuomo seized control of it in 2012 and turned it over to government control – mostly, his own. I observed every public meeting of the Board until it was supposedly returned to private control in 2017. With two exceptions, the meetings of the Board were a joke. For the most part, they consisted of Chris Kay slide shows in which he discussed either matters already reported in the media, or a summary of his accomplishments. The Board, at that time, had audit and internal control functions.
It was clear from the public meetings that the Board was either doing nothing or conducting its real business behind closed doors. There are, of course, legitimate (and limited) reasons for meeting in private, but much of what was being done – if anything was being done – did not fall into that category. When I complained to New York’s Committee on Open Government, they agreed and ordered the Board to comply with the law. They ignored that directive.
The Gaming Commission is another government agency charged with, among other things, oversight of NYRA. It also adjudicates disciplinary matters and issues regulations. It makes NYRA’s former public meetings look like the Lincoln-Douglas debates. There is rarely a discussion of any substance, nor do they feel any obligation to explain publicly their reasons for anything.
The Franchise Oversight Board has been the one body that cannot be dismissed summarily as a check on either NYRA or its CEO. (Although it is not a high bar to clear when the meetings of the other two can be described as a joke.) There was one member in particular, Steven Newman, an accountant experienced in the operations of government agencies, who took oversight seriously.
Newman questioned the claims of NYRA and Kay that they had started operating as a profitable entity. He thought that reconfiguring the financial books to move certain expenses off the operating ledger was not an indicator of profitability. He questioned why NYRA would not allow its independent auditor to appear at a meeting of the Oversight Board. He questioned why Kay’s performance standards and annual evaluations were not available to the Board. He raised significant, meaningful questions to which Kay often responded angrily or defensively. Newman resigned in the first half of 2017.
Other Oversight Board members were less rigorous. One incident that stands out was the time Kay was being questioned about his request for increased funding for the Saratoga “Walk of Fame,” a vanity project for which only he saw the need. The Board Member assured Kay he did not have to discuss it if he did not want to. This same Board Member once offered to assist Kay in his desire to be “unshackled” from the NYRA Board – as if they were an impediment to Kay getting his way on everything.
At its March 7 meeting, Board members expressed their concern that “something as dumb as” the Kay scandal would affect what they believed to be the progress they made since Cuomo took control of NYRA in 2012. You know what is said of karma, and hubris only makes it worse.
The 2012 Cuomo coup was facilitated by compliant state actors and a flaccid NYRA Board. They trumped up charges of malfeasance by the then-CEO and the General Counsel, firing both of them. They challenged the integrity of Board members, threatening to rescind the licenses they needed to race their horses. A review by the Governor’s own Inspector General, however, concluded that the NYRA CEO did nothing wrong, and that a mistake that resulted in a short-changing of bettors was actually the result of poor legal advice.
The media went along with the Cuomo narrative, talking about the need to restore integrity to NYRA. They ignored the juggling of financial books to turn a deficit into a profit. They further reported the falsified Saratoga attendance figures fed to them by NYRA. Regrettably, the demands of deadlines prevent most reporters from delving too deeply into NYRA’s press releases.
That is not an impediment, however, for government agencies charged with oversight. The Franchise Oversight Board, in particular, only has such responsibility for NYRA. But the issues that were supposedly at the fore in 2012 were no longer in play when now it was Cuomo’s appointees in charge.
One Board member back then – who is still on the Board – questioned why settlements were paid to the terminated CEO and General Counsel. (The answer is that the payments were required by contracts.) This time around, the CEO was a Cuomo pick, and there was no such question. That is in spite of the fact that in 2012 there was no allegation of personal impropriety and this year there clearly is.
This represents just another example of that “culture” in which NYRA operates. The “culture” is not that a groundskeeper is “reluctant to report bad things.” The culture is one where established professionals and business people are so beholden to a Governor that they will not stand up for what is right.
At the March 7 Oversight Board meeting, NYRA officials said they were revising an ethics policy and doing more training. Right. The problem is not that a CEO with several senior positions in major organizations did not know that using a company’s employees to cut his grass would be an issue. The problem is not that a carpenter needs ethics training or whistleblower protection. The problem – as it so frequently is – is that the entitled feel entitled. And that members of the Oversight Board and Gaming Commission are entitled persons who think other entitled persons should get a free pass.
But for those on the Oversight Board and NYRA management who think a satisfactory response is providing a mutuel clerk with more training and whistleblower protection, here are some basic questions that must be addressed and answered publicly:
- What were all of the reasons leading to the termination of Kay’s employment?
- Did NYRA conduct a review of the allegations and, if so, what did it conclude?
- Did NYRA’s Internal Control function, assuming it still has one, conduct a review and, if so, what were its conclusions?
- Did either the Franchise Oversight Board or the State Gaming Commission conduct an independent review and, if so, what were their conclusions?
- Has the Governor’s Inspector General, who conducted a review in 2012, done so this time and, if so, what were her conclusions?
- Has there been a review, by any entity, of financial transactions authorized by Kay, including his expense accounts?
- Is NYRA going to seek damages from Kay, as one Franchise Oversight Board member suggested in 2012?
- Has a review been conducted of whether shortcomings within NYRA leading to these issues implicates their retention of the franchise, as was done in 2012?
These are all basic questions that would be asked by any organization when confronted with the unethical conduct of its CEO. My fear is that there is a considerable desire to sweep all of this under the rug, and move on to planning for the Belmont Stakes.
A comparison between the terminations of NYRA’s CEO in 2012 and 2019 is instructive. As I wrote about regularly in 2012, the Cuomo takeover of NYRA was purely a political power play using a manufactured scandal and intimidation, including threats against NYRA Board members. The threats were conveyed in a letter by Cuomo’s Budget Director, who served as Chair of the Franchise Oversight Board, and the head of the Racing and Wagering Board (now the Gaming Commission), who prepared a report alleging malfeasance without interviewing anyone or reviewing all relevant documents.
There was never an allegation of personal impropriety by the CEO. The Governor’s own Inspector General conducted a review in which she actually interviewed numerous individuals and examined documents. She issued a lengthy report that dispelled none of my statements in this or the preceding paragraph.
By contrast, the 2019 termination of Chris Kay was for personal impropriety according to a published report that has not been disputed. In contrast to 2012 when the Cuomo staff were actively publicizing their “investigations” and opinions, there has been none of that this time. The difference? I’ll take a wild guess and suggest that it is purely political.
Political motivations are, of course, a similarity between the two years. Another similarity is the avoidance of those in positions of responsibility to accept accountability. Ironically it is only the 2012 CEO who acknowledged an error – and took immediate steps to rectify it even before it became a political football.
But no one else, in either instance, who served in a position with oversight responsibility has stepped forward to acknowledge responsibility – whether it be a NYRA Board member or a member of the Franchise Oversight Board or the Gaming Commission.
And that is the “culture” desperately in need of change.
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