Van Clief: Monitoring Sales Integrity

D.G. Van Clief Jr. is the chairman of the Sales Integrity Program Monitoring Committee, which is overseeing the implementation of, and determining the effectiveness of, the Sales Integrity Task Force’s recommendations that were issued in November 2007. The new policies included a ban on exogenous anabolic steroids for 45 days prior to a sale of weanlings or yearlings, an updated list of prohibited practices, and a code of conduct for all participants in public auctions.

Van Clief, on July 22, discussed with The Blood-Horse the role of the monitoring committee, its work so far, and how it will operate in the future.

The Blood-Horse: What is the committee’s role?
Van Clief: “The mission of the Sales Integrity Program Monitoring Committee has four parts: No. 1, monitor the implementation of the 2007 Sales Integrity Task Force recommendations; No. 2, assess the effectiveness of those new policies in enhancing both the reality and the perception of the integrity of our markets; No. 3, make recommendations for changes or additions to those policies as necessary; and No. 4, function as the communications conduit for the process with key audiences, which we look at as the media, market participants, the public at large, and state governments.”

Are you anticipating any more government involvement or do you think you have resolved that issue?
“We believe we have satisfactorily answered and carried out the charge of the Kentucky House Licensing and Occupations Committee. The work that was turned in by the Sales Integrity Task Force was well-received by (Kentucky Rep.) Larry Clark and members of the committee. We feel  that process has been successfully completed. But we do welcome the existence of an ongoing line of communication. To the extent that the (Kentucky) legislature wants to hear from us and would like to keep current with the process, we see that as one of our jobs to make sure that they have the information they need. This committee feels that a line of communication is important, and we will undertake it as part of our job to make that it is an open, and free, and comfortable line of communication.”

How much do you think has been accomplished so far?
“We have accomplished a great deal inasmuch as Keeneland and Fasig-Tipton, which together represent the vast majority, by dollar volume, of the North American Thoroughbred market, have agreed to implement the recommendations handed down by the 2007 Sales Integrity Task Force. That makes it, to my knowledge, the first time that sales integrity recommendations have been adopted and are now enforceable through the conditions of sale. It’s a huge step compared to past efforts, notably those of the 2004 Sales Integrity Task Force, which handed down a body of recommendations, none of which was adopted and made enforceable at the time.”

What more needs to be done?
“I don’t think we really know that yet. But one of the jobs of this committee, as its name indicates and as I have discussed, is to monitor the implementation of the new policies and then assess whether those policies are effective in enhancing both the reality and the perception of integrity in our market.”

How are you going to determine if the policies are effective?
“We think the main tool that we’ll have other than the ad hoc feedback directly to the committee will be the implementation of a professionally conducted survey toward the end of the year following the November sales (in Kentucky). At that point, we will survey the marketplace, both buyers and sellers, to develop a reliable body of opinion about whether or not these policies are doing their job.”

Do you see the work of the committee as an ongoing process beyond this year or the next?
“The Sales Integrity Task Force completed its mission as mandated by the House Licensing and Occupations Committee. That process resulted in the recommendations. Fasig-Tipton and Keeneland agreed to convert those recommendations into policy and made them enforceable by making them conditions of sale. The monitoring committee was created this spring for the purpose that I have described, and thus began what we see as a ‘living process,’ if you will, a dynamic and ongoing process of evaluation and, as necessary, recommendations for change.”

What about getting other sale companies involved in addition to Keeneland and Fasig-Tipton?
“We’re not in a position to require compliance with the same policies that Keeneland and Fasig-Tipton have adopted. But we certainly hope that other companies will adopt (the recommendations). They have already adopted some of these recommendations. Obviously, we would like to see a uniform marketplace.”

Are you going to do anything in particular to reach out to other companies?
“Yes. We will certainly converse with them and ascertain what their position is. We’re just starting that this week. I think it’s probably relevant that both Florida and California (where the Ocala Breeders Sales Co. and Barretts, respectively, are located) are represented on the monitoring committee by Mike O’Farrell, who is the chairman of OBS, and Samantha Siegel, who is an influential California-based buyer. We already have spoken to Tom Ventura (the director and general manager) at OBS, and we will be speaking with Jerry McMahon (the president and general manager) at Barretts to assess where they think they’ll be going with these policies and to offer our assistance and input if they want it.”

Where do you think the auction industry will be five years from now in terms of sales integrity?
“Five years from now, I think that the integrity issues will be way behind us. These issues that we’ve been dealing with in the past 24 months, I don’t think they are even going to be controversial. I suspect  the industry is going to develop additional measures to enhance confidence in its markets, and I’m sure that the industry is going to develop better means of verifying of information so we can engage in higher levels of disclosure with the security and confidence that it is accurate.”

Where does the issue of disclosure of conformation-altering surgeries stand?
“The Sales Integrity Task Force created a medical follow-up committee, which will meet at least annually for the purpose of reviewing the prohibited practices list and adding any practices to it that it feels are warranted.”

Are we getting any closer to requiring the disclosure of those types of surgery?
“I think we are. I think what’s inhibiting broader levels of disclosure is the ability to deliver accurate information. At present, there isn’t a system allowing sellers to deliver a horse’s medical history with full assurance unless they’ve owned the horse for its entire life. With many sale horses, that’s obviously not the case. Until there is a means for providing an accurate history, it’s going to be impossible to deliver that information as a warranty of sale.”

What is the solution?
Microchips. Given present technology, microchipping is probably the answer.”

Why aren’t microchips being used yet by the Thoroughbred industry on a widespread basis?
“To date, no authority has required the implementation of a uniform microchipping policy.”