New York’s attorney general is accusing current and former directors of one of the nation’s top charities in rescuing retired racehorses of driving the group into financial insolvency and causing the harm, and death, of some Thoroughbreds under their care.
Attorney General Eric Schneiderman said the Saratoga-based Thoroughbred Retirement Foundation for years took far more horses than it could afford to support.
“Over the past year, the board has engaged in a series of financially irresponsible transactions, borrowing to pay off existing debt and invading TRF’s restricted endowment fund, that have damaged further TRF’s ability to fulfill its charitable purposes of protecting Thoroughbreds from neglect and mistreatment,’’ according to a lawsuit brought in state court against the current and former directors.
Named as defendants are John C. Moore, Robert Hinkle, Michael Lakow, Diana Pikulski, Hayward R. Pressman, Leslie Priggen, John S. Rainey, Margaret Santulli, and the TRF.
The TRF responded to the charges in a statement, saying it "vehemently denies all the baseless allegations included in the attorney general's complaint, which is replete with false statements, rash generalizations, distorted representations and facts manipulated and taken out of context.
"The TRF will pursue every legal avenue to defend itself against these false claims and present evidence to disprove every allegation stated in the complaint," the statement added. "Most importantly, TRF horses stabled at facilities throughout the U.S. are well fed and properly cared for in appropriate settings and remain in excellent health."
The case was filed May 3 in state Supreme Court in Manhattan.
The group, registered as a charity with Schneiderman’s office, has more than 1,100 retired racehorses under its care.
“The current crisis is the product of years of mismanagement of TRF by its longtime executive director and current board member and director of external affairs, Diana Pikulski, and the reckless failure of TRF’s board, now under the direction of chairman John C. Moore, to ensure that TRF maintain a herd no larger than it can support,’’ the complaint alleges.
The attorney general said TRF has had a negative cash flow since 2005 and has been “chronically late’’ in payments to farms and veterinarians that care for the horses. The charity pays $3 a day per horse to farms that keep the rescued horses, which the complaint said is less than half of any other rescue group.
In a four-year period beginning in 2006, the complaint alleges, “TRF’s leadership accepted over 500 new Thoroughbreds into the herd, without properly considering the organization’s ability to pay for the care of these horses for the remainder of their lives and despite repeated warnings that TRF could not afford to take on any more horses.’’
The attorney general accused the TRF board of having “endangered’’ the very horses they were charged with protecting.
“The TRF board’s inadequate spending on the horses, together with its failure to provide proper supervision of the herd and of its boarding facilities, has resulted in severe neglect and inadequate care. The number of deaths in the herd spiked after 2006, and nearly 100 TRF Thoroughbreds died in 2010 alone,’’ the complaint states.
The lawsuit says horses have been denied proper pasture grazing and medical care. “At some facilities, TRF horses have suffered severe malnourishment, prolonged and unnecessary pain, and death from starvation and exposure.’’
After the problems at TRF became public a year ago, Schneiderman said the board “embarked on a series of irresponsible financial transactions that protected the interests of individual directors who had loaned money to TRF but encumbered its largest asset, a $7 million restricted endowment fund from the estate of Paul Mellon dedicated to the support of the horses.’’
Twenty five directors have left the TRF board since 2006, and the organization had four executive directors the past three years, according to the complaint,
The attorney general is claiming jurisdiction in the matter because the board, he said, failed to discharge its legal duties, among other things, by accepting too many horses into the TRF herd while knowing they did not have the money to fund the proper care.
The complaint asks a court to oust the TRF board, blocking the acceptance of any more horses under its care, and requiring the defendants to “account for violating their fiduciary and statutory duties by causing the neglect of TRF horses and engaging in financial transactions that benefited individual directors and violated the restrictions of the TRF endowment.’’
Schneiderman also wants a temporary receiver appointed to control TRF’s assets.
“New York and the nation need the Thoroughbred Retirement Foundation to succeed. But unfortunately, TRF’s board has driven this vital organization into the ground, threatening its mission and the very horses it is supposed to protect,’’ Schneiderman said in a statement. “Despite my office’s efforts to encourage reform, TRF’s current directors have proven incapable of turning around the dire situation they have created. The time has come to give new leadership a chance.”
In its statement, the TRF alleged that Schneiderman is attempting to link the charity with "recent media reports spotlighting mistreatment of racetrack Thoroughbreds, which we condemn and deplore.
"Since the attorney general announced his investigation in March 2011, the TRF has been in continuous dialogue with members of his staff who have seriously misallocated scarce government resources by repeatedly ignoring irrefutable evidence that the allegations are demonstrably untrue. Today’s action is nothing less than an unwarranted attack on a long standing and respected non-profit organization overseeing the well-being of more than 1,000 retired racehorses that may otherwise face slaughter."