Despite Increasing Controversy, Guild Seeks Solidarity

As the Jockeys' Guild prepares for its annual meeting in Irving, Texas, Dec. 6-7, organization management is under increasing fire from the racing industry and some of its own members. Still, the Guild appears poised to make a case for solidarity, and it remains to be seen whether substantial change will come about during the two-day meeting.

Though concerns over on-track medical insurance for jockeys led to the formation of an industry task force in late November, the Guild has become the story. Individuals, including more than 100 jockeys who signed a petition, have called for transparency and accountability in regard to Guild procedures and finances.

Churchill Downs president Steve Sexton on Dec. 1 asked Dr. Wayne Gertmenian, the Guild's chief executive officer, to account for the $1.25 million Churchill Downs Inc.-owned racetracks have given the Guild the past three years as part of a deal the Guild has with the Thoroughbred Racing Associations. Members of the TRA give the Guild about $2.2 million a year as compensation for media rights.

Sexton has demanded an answer by Dec. 7. Churchill, the first track at which jockeys walked out because of what they called inadequate on-track medical insurance, has been called a "plantation" by Gertmenian, who has alleges racetracks treat jockeys like "slaves."

On Dec. 4, Kelly Wietsma, president of Equisponse, a marketing agency for jockeys, fired off an open letter to Gertmenian that calls for his resignation and that of Guild chairwoman Tomey Jean Swan. Wietsma outlined a number of issues, including the Guild's failure to respond to the jockeys' petition. She said the Guild also failed to respond to a cease-and-desist order sent by Wietsma on behalf of jockey Jerry Bailey, her client, in connection with accusations by Guild management that Bailey and jockey Pat Day were responsible for the lapse in insurance coverage in 2002.

"If you are not willing to divulge financial information, as required by law, in the best interests of the future of the Jockeys' Guild and its credibility as a competent organization, I think it is best that you and Tomey Swan resign and allow the membership to search for credible, competent replacement in running (the Guild)," Wietsma said in her letter to Gertmenian. "I believe this is the only way to restore credibility to the Jockeys' Guild and assure a bright future for the members."

Among those who may attend the Guild meeting is Gary Donahue, co-chairman of the Disabled Jockeys' Fund. The fund will be terminated at the end of 2004, according to Internal Revenue Service documents. Donahue has joined a lawsuit filed by former Guild treasurer Eddie King that calls for release of financial information.

The fund, as of the end of 2003, stood at $105,000, down from more than $1 million in previous years. After Gertmenian took over as Guild chief, he formed the Disabled Jockeys' Endowment, which is said to stand at more than $1 million.

"Whose decision was it to move over $1 million out of the Disabled Jockeys' fund?" Wietsma asked in her letter to Gertmenian. "Did you tell Eddie King that you wanted the funds moved so that you could create the illusion that the fund was in financial trouble, thereby encouraging donations from wealthy benefactors of the fund? With all of the financial questions floating around the industry, do you think for one moment that anyone is going to donate money to the Jockeys' Guild?"

Despite the conflict, it appears most members of the Guild executive committee stand by Gertmenian and Matrix Capital Associates, his consulting firm. Guild vice chairman Dave Shepherd said the controversy has served to strengthen members' faith in Gertmenian, who has called on jockeys to rally around the Guild at its annual meeting.

Jockey Kent Desormeaux, according to published reports, began his own investigation into Guild matters. But when asked Nov. 26 by The Blood-Horse for his thoughts on the situation, Desormeaux, a member of the executive committee, said he had no comment.

The Guild no longer has a written contract with the TRA. (The $2.2 million a year the Guild receives from the TRA can be spent as the Guild sees fit.) The two parties now have an oral agreement that can be terminated at any time, and Churchill, at least, appears ready to pull the plug if it doesn't get answers.

The Guild, with more than 1,200 members, is supported by members' dues--basically mount fees. The organization hired Matrix Capital Associates in 2001 after former national manager John Giovanni was ousted.

According to an April 1, 2003, management agreement, Gertmenian is paid $160,000 a year in salary, up to $12,000 per year for a life insurance policy, and compensated for "reasonable and customary business expenses." Should he continue to serve as president and CEO after Dec. 31, 2004, he would be added to the Guild's pension plan, the document says.

The management agreement can be terminated with not less than 30 days written notice. If Gertmenian is dismissed "other than for good cause," he would be paid severance equal to the balance of his salary, and the Guild must pay Matrix Capital Associates a $228,000 termination fee, the document says.

It wasn't immediately known if the document was altered during the 2003 annual meeting of the Guild. As for financial records and reports, the document says Matrix Capital Associates "shall maintain on a current basis true, correct, and complete books and records of all money," and that "all such records shall be open for inspection by the directors of the Guild at all reasonable times."

The document also calls for monthly statements and an annual report that is due on or before March 15 of each year.