Settlement Reached in KHRA Lawsuit

Settlement Reached in KHRA Lawsuit
Photo: Anne M. Eberhardt
Bernie Hettel
Bernie Hettel has reached an agreement to settle a federal lawsuit with the Kentucky Horse Racing Authority and others, based on an apology from the agency in regard to actions taken after his 2004 departure as executive director of the former Kentucky Racing Commission.

Hettel, who served as executive director of the KRC from 1993 to early 2004, charged the agency and others damaged his career and reputation; specifically, “blackballing” him from an employment position with Churchill Downs.

Others named in the suit are William Street, the authority’s chairman; Lisa Underwood, the authority’s current executive director and former general counsel; La Juana Wilcher, former secretary of the state Environmental and Public Protection Cabinet; and Jim Gallagher, the authority’s executive director from September 2004 to October 2006.

In addition to the apology from the KHRA, the agency said in a Dec. 10 joint news release it would reimburse Hettel for his legal fees. The news release said the settlement was also reached because of “the expense of such litigation” to Hettel, the KHRA, and Kentucky taxpayers; and “the detrimental effect such litigation might have on the (Kentucky and national) racing industry, which Mr. Hettel and the Racing Authority hold dear.”

When reached by telephone Dec. 10 at Gulfstream Park, where he is manager of racing operations, Hettel confirmed the settlement and said he was satisfied with the outcome. He referred all other questions to his Louisville attorney, Bruce Miller.

The attorney said he was bound by confidentiality agreements, but said from his perspective, the lawsuit came down to Hettel telling the truth about the issues. “Bernie Hettel doesn’t lie,” Miller said.

Hettel alleged the KHRA and Gallagher had damaged his reputation by comments made about drug testing and drug positives realized while Hettel served as executive director. Specifically, Hettel claims testimony by Gallagher before a joint committee of the Kentucky General Assembly charged that based on “irrefutable evidence…racing regulators concealed positive test results for banned drugs in racehorses in 2002 and 2003.”

Hettel alleged the statements implied he and/or the former racing commission had shown favoritism or participated in illegal conduct.

After leaving the KRC, Hettel secured a consulting position with Churchill Downs in April. But after about two weeks on the job, Hettel alleged his employment agreement with the racetrack company was canceled.

His complaint, filed Sept. 9 in Kentucky federal court, said he was “advised that certain of the defendants…would not permit his employment at Churchill Downs; and had, in effect, ‘blackballed’ his employment within the horse racing industry of Kentucky.”

Hettel claims he was unemployed for 27 months because of the defendants’ actions.

Key in the settlement was the completion in November of a two-year investigation by the Kentucky Office of the Inspector General. In the report, the OIG said, in part, “that there is no reason to believe that KRC’s actions in applying threshold levels were motivated by favoritism or any other improper motive.”

In the statement, the KHRA apologized “for the unnecessarily lengthy delay in the completion of the OIG report…and for any perceived insinuation that Mr. Hettel engaged in any kind of criminal activity.”

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