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SBJ/March 6 - 12, 2006/This Weeks News
Jockeys confront harsh reality, empty coffers
Published March 6, 2006
When Pepperdine University professor Wayne Gertmenian was first appointed to run the Jockeys’ Guild in 2001, the organization, which represents about 1,200 professional racehorse jockeys nationwide, had about $5 million in assets.
|John Velazquez, the guild’s chairman, told members
that it’s time to rebuild the organization.
“I think that you were systematically misled over a long period of time about the state of the guild,” Barry Broad, the guild’s outside attorney, told a gathering of jockeys at the group’s annual assembly last week in Dallas. Broad noted that on the day he was fired, Gertmenian told a conference call of the guild’s senators, “You have never been in better shape [financially] than you are today. We have a $3.5 million war chest.”
In fact, there was no war chest, and for the last six months of Gertmenian’s administration there was no accounting kept of any kind to document the movement of money in and out of the labor organization, which is based in suburban Los Angeles. Broad told the jockeys assembled in Dallas that they might never find out what really happened to all the assets of the organization, which was started more than 60 years ago.
Gertmenian was fired after a congressional investigation revealed that the guild CEO had allowed a $1 million accident insurance policy to lapse without informing jockeys. The lack of insurance came to light after Gary Birzer, a West Virginia jockey, was paralyzed in a racing accident and could not pay for his more than $600,000 in medical bills.
Guild chairman and reigning Jockey of the Year John Velazquez opened the group’s first meeting since Gertmenian’s ouster by saying, “We’ve been through a lot, and it is time to rebuild the guild right now.”
But it was clear that jockeys must deal with some harsh realities before the organization regains its financial health.
The 60 jockeys gathered last week voted to raise member fees by 33 percent and cut temporary disability benefits by 50 percent. That means guild members will now pay $4 every time they ride a horse in races all over the country. The mount fee had been $3. Benefits for jockeys who are temporarily injured will be cut from $200 a week to $100 a week in states without workers’ compensation benefits and from $100 a week to $50 a week in states with workers’ compensation.
If it hadn’t made those changes, “the guild would be forced to terminate its benefits programs and cease to function,” said Tom Kennedy, another guild outside attorney.
Jockeys were told last week that the guild had been spending more on benefits than it was taking in and that some members were “taking financial advantage” of the temporary disability system. The guild did not collect health premiums from many of its members for years. As of last week, about 100 jockeys owed hundreds of thousands of dollars to the self-funded health plan. The money owed by each jockey ranged from $2,000 to $10,000, guild officials said.
The guild last week set a deadline of April 1 for jockeys who were delinquent in their health premium payments to pay half of what they owed, and a deadline of Dec. 31 for the rest of it. Jockeys who miss the deadlines will be dropped from the health insurance plan.
Also last week, the guild filed a lawsuit against Gertmenian in Los Angeles federal court claiming that he “embezzled, stole and/or unlawfully and willfully abstracted” money and other assets from the guild.
The lawsuit also names Gertmenian’s company, Matrix Capital Associates; former guild COO Albert Fiss; former CFO Gevork Asatryan; and Gertmenian’s daughter, Farrell Gertmenian, and her company, Scoop Inc., as defendants. It seeks unspecified damages.
“This is part of the witch hunt against Dr. Gertmenian,” said Mark Werksman, Gertmenian’s attorney. “They are trying to blame him for everything that has gone wrong with the guild.”
Broad told the jockeys that there was a “very active” FBI investigation into Gertmenian’s activities, and that he was hopeful the investigation could help their lawsuit. The guild, Broad said, was cooperating with that investigation, including turning over to the FBI a guild-owned laptop computer that Gertmenian had recently returned to the organization.
The guild also voted to reinstate and thank jockey Eddie King, its former treasurer, for challenging the financial practices of Gertmenian’s administration. King was stripped of his guild membership in 2004 after he told the press that he was concerned that money was missing from a guild charity.
King said last week that he would not rejoin the guild “as long as the same people are in there. They are backers of [Gertmenian] and they threw me out. It’s the same guild.”
King noted that he told the guild senate more than a year ago that all of the money was being emptied out of the organization’s accounts, but that no one would listen.
King was upset to learn that the guild had no plans to launch an internal investigation into the financial decline of the organization. “They haven’t changed,” he said, “and they haven’t learned a damn thing.”