[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
THOROUGHBRED HORSE RACING JOCKEYS AND WORKERS:  EXAMINING ON-TRACK 
       INJURY INSURANCE AND OTHER HEALTH AND WELFARE ISSUES

                             HEARING

                            BEFORE THE

            SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                              OF THE 

                  COMMITTEE ON ENERGY AND COMMERCE 

                     HOUSE OF REPRESENTATIVES


                    ONE HUNDRED NINTH CONGRESS

                        SECOND SESSION 


                          MAY 9, 2006

                      Serial No. 109-98

Printed for the use of the Committee on Energy and Commerce


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                COMMITTEE ON ENERGY AND COMMERCE

JOE BARTON, Texas, Chairman
RALPH M. HALL, Texas
MICHAEL BILIRAKIS, Florida
  Vice Chairman
FRED UPTON, Michigan
CLIFF STEARNS, Florida
PAUL E. GILLMOR, Ohio
NATHAN DEAL, Georgia
ED WHITFIELD, Kentucky
CHARLIE NORWOOD, Georgia
BARBARA CUBIN, Wyoming
JOHN SHIMKUS, Illinois
HEATHER WILSON, New Mexico
JOHN B. SHADEGG, Arizona
CHARLES W. "CHIP" PICKERING,  Mississippi 
  Vice Chairman
VITO FOSSELLA, New York
ROY BLUNT, Missouri 
STEVE BUYER, Indiana
GEORGE RADANOVICH, California
CHARLES F. BASS, New Hampshire
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
MIKE FERGUSON, New Jersey
MIKE ROGERS, Michigan
C.L. "BUTCH" OTTER, Idaho
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
JOHN D. DINGELL, Michigan
  Ranking Member
HENRY A. WAXMAN, California
EDWARD J. MARKEY, Massachusetts
RICK BOUCHER, Virginia
EDOLPHUS TOWNS, New York
FRANK PALLONE, JR., New Jersey
SHERROD BROWN, Ohio
BART GORDON, Tennessee
BOBBY L. RUSH, Illinois
ANNA G. ESHOO, California
BART STUPAK, Michigan
ELIOT L. ENGEL, New York
ALBERT R. WYNN, Maryland
GENE GREEN, Texas
TED STRICKLAND, Ohio
DIANA DEGETTE, Colorado
LOIS CAPPS, California
MIKE DOYLE, Pennsylvania
TOM ALLEN, Maine
JIM DAVIS, Florida
JAN SCHAKOWSKY, Illinois
HILDA L. SOLIS, California
CHARLES A. GONZALEZ, Texas
JAY INSLEE, Washington
TAMMY BALDWIN, Wisconsin
MIKE ROSS, Arkansas


BUD ALBRIGHT, Staff Director
DAVID CAVICKE, General Counsel
REID P. F. STUNTZ, Minority Staff Director and Chief Counsel


            SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
ED WHITFIELD, Kentucky, Chairman
CLIFF STEARNS, Florida
CHARLES W. "CHIP" PICKERING,  Mississippi 
CHARLES F. BASS, New Hampshire
GREG WALDEN, Oregon
MIKE FERGUSON, New Jersey
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
JOE BARTON, Texas
  (EX OFFICIO)
BART STUPAK, Michigan
  Ranking Member
DIANA DEGETTE, Colorado
JAN SCHAKOWSKY, Illinois
JAY INSLEE, Washington
TAMMY BALDWIN, Wisconsin
HENRY A. WAXMAN, California
JOHN D. DINGELL, Michigan
  (EX OFFICIO)


                              CONTENTS


Page
Testimony of:

Velaquez, John, Chairman of the Board of Directors, The Jockeys' 
Guild	11 
Haire, Darrell, Interim National Manager, The Jockeys' Guild	
14
Broad, Barry, National Legal Council, The Jockeys' Guild	
19




THOROUGHBRED HORSE RACING JOCKEYS AND WORKERS:  EXAMINING ON-TRACK 
INJURY INSURANCE AND OTHER HEALTH AND WELFARE ISSUES 


TUESDAY, MAY 9, 2006

HOUSE OF REPRESENTATIVES,
COMMITTEE ON ENERGY AND COMMERCE,
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,
Washington, DC.


The subcommittee met, pursuant to notice, at 2:02 p.m., in 
Room 2123, Rayburn House Office Building, Hon. Ed Whitfield 
[chairman] presiding. 
Present:  Representatives Whitfield, Burgess, Stupak, and Barton 
(ex officio).  
Staff Present:  Mark Paoletta, Chief Counsel for Oversight and 
Investigations; Alan Slobodin, Deputy Chief Counsel for Oversight 
and Investigations; Tom Feddo, Counsel; Clayton Matheson, Analyst; 
Michael Abraham, Legislative Clerk; David Nelson, Minority 
Investigator/Economist; and Elizabeth Ertel, Minority Senior Staff 
Assistant.  
MR. WHITFIELD.  I would like to call this hearing to order.  Today's 
subject will be thoroughbred horseracing, jockeys and workers, 
examining ontrack injury insurance and other health and welfare 
issues.  As you know, we have had one full-scale hearing on this 
already and a number of developments have occurred since that first 
hearing so we are going to proceed into and explore some of those 
areas today.  
Horseracing certainly has a significant impact on interstate commerce.  
By way of example, this hearing is being held just 3 days after the 
Kentucky Derby, one of the most famous and prestigious races in the 
sport, on which nearly $119 million was legally wagered on that race 
alone.  Horseracing's impact on our sports culture and economy 
reinforces our motivation to remain apprised of issues or problems 
in the industry.  
Horseracing remains a dangerous sport.  Indeed, one of our witnesses 
today, jockey John Velazquez, who is the Guild's current Chairman of 
the Board and one of the Nation's finest jockeys, was injured on 
April 20th when a horse he was riding collapsed at the finish line 
at Keeneland.  The horse fell on Mr. Velazquez, breaking his shoulder 
blade and several ribs and forcing him to miss the Kentucky Derby.  
We are grateful for his attendance today and certainly want to wish 
him a speedy recovery.  
Since our last hearing, there have been some noteworthy developments 
over the past few months about which we will hear testimony today.  
Within 1 month of our hearing, the Guild's Board of Directors fired 
Dr. Gertmenian, the Guild's Chief Executive Officer, and his staff, 
including Albert Fiss, Lloyd Ownbey, Lisa Haley, and others.  
Unfortunately, Dr. Gertmenian and his company's questionable actions 
continued to the very last moment when his Chief Financial Officer 
wrote checks totaling over $200,000 from the Guild's accounts to 
himself, Dr. Gertmenian, and Mr. Fiss.  
Earlier this year, the Guild held its first annual assembly following 
Dr. Gertmenian's ousting and has begun to revise its bylaws and 
repair its broken finances.  It is my understanding that civil suits 
involving jockey Gary Birzer, the Guild, Dr. Gertmenian, and Mr. Fiss, 
among others, have been filed in the Federal courts.  
In the meantime, according to press reports, Dr. Gertmenian has come 
under investigation by the FBI and local police in Los Angeles, 
apparently for his suspect activities while heading the Guild.  
Unfortunately, it looks like Pepperdyne University still has him 
listed on its website as being the head of the Jockeys' Guild.  
The Guild's new leadership is here today to tell us about what 
Dr. Gertmenian left in his wake, the changes they have implemented 
to their organization, their efforts to find a long-term managers 
and the efforts they have undertaken to ensure that the Guild 
survives and its permanently disabled members are not left helpless 
and unsupported.  
There are still only four States that provide workers compensation 
programs for jockeys and exercise riders.  My home State of Kentucky 
almost passed a bill creating a workers comp program for jockeys 
racing there but ran into last minute problems, and it was not 
adopted.  
I personally believe that we need a Federal solution in this area, 
and I believe that we can do so, and once the details of what we are 
proposing get out, I honestly believe that there will not be a lot of 
 opposition to this.  
Since our hearings, however, many race tracks of their own accord 
have raised their ontrack catastrophic insurance coverage to $500,000 
or a million dollars.  We are encouraged by this development, and I 
gather that jockeys and exercise riders are also.  
On the matter of ontrack insurance purchased by race tracks, we 
have subpoenaed Ms.  Rose Mary Williams who is the Director of Racing 
at Mountaineer Race Track and Gaming Resort to testify today.  
Ms. Williams voluntarily testified on November the 17th at our 
hearing during that time, and then after the hearing, Mr. Stupak, 
our Ranking Member, wrote supplemental written questions directed to 
Ms. Williams and Mountaineer, and following her written answers, 
committee staff requested to interview Ms. Williams and discuss 
discrepancies between her oral testimony and written statements.  
Ms. Williams through her legal counsel declined to be interviewed by 
the committee staff.  Accordingly, the full committee Chairman 
authorized a subpoena for her testimony today so that we can 
hopefully obtain answers to the questions that we wanted to ask.  
This is an important subject matter.  There is a lot of money 
involved.  It is a dangerous sport, and there are a lot of injuries 
as a result of it.  So I look forward to today's testimony, and I 
thank the witnesses for their attendance. 
And I would like to at this time turn to our distinguished Ranking 
Member, Mr. Stupak, for the purposes of his opening statement. 
[The prepared statement of the Hon. Ed Whitfield follows:]  

PREPARED STATEMENT OF THE HON. ED WHITFIELD, CHAIRMAN, SUBCOMMITTEE 
ON OVERSIGHT AND INVESTIGATIONS 

Good afternoon and welcome.  Today, the Oversight and Investigations 
Subcommittee will revisit some of the serious issues we examined last 
year regarding the health and welfare of jockeys, exercise riders, and 
 backstretch workers.  These issues affect the professional sport of 
horse racing and the many individuals who work with the horses every 
day.  
   As I have emphasized before, horse racing has a very significant 
impact on interstate commerce.  By way of example, this hearing is 
being held just three days after the Kentucky Derby, one of the most 
famous and prestigious races in the sport, on which nearly $119 
million was legally wagered.  Horse racing's impact on our sports 
culture and economy only reinforces our motivation to remain 
apprised of issues or problems in the industry.  
	Horse racing remains just as dangerous today as we noted 
last fall when we conducted our hearings.  Indeed, one of our 
witnesses, jockey John Velazquez, who is the Guild's current Chairman 
of the Board and one of the nation's finest jockeys, was injured on 
April 20th when the horse he was riding collapsed at the finish 
line.  The horse fell on Mr. Velazquez, breaking his shoulder blade 
and several ribs, and forcing him to miss the Kentucky Derby.  
I am grateful for your attendance today, Mr. Velazquez, and am 
relieved that your injuries were not more severe. 
	Since our last hearing there have been some noteworthy 
developments in the past few months about which we will hear testimony 
today.  Shortly after our October 2005 hearing, the Guild's members 
began to take back ownership of their organization.  Within one month, 
the Guild's Board of Directors fired Dr. Gertmenian, the Guild's Chief 
Executive Officer, and his staff, including Albert Fiss, Lloyd Ownbey, 
Gevork Asatryan, and Lisa Haley.  Unfortunately, Dr. Gertmenian's and 
his company's questionable actions continued to the very last 
moment-when his Chief Financial Officer, Mr. Asatryan, wrote checks 
totaling over $200,000 from the Guild's accounts to himself, 
Dr. Gertmenian, and Mr. Fiss. 
	Earlier this year, the Guild held its first annual assembly 
following Dr. Gertmenian's ouster and has begun to revise its bylaws 
and repair its broken finances.  It is my understanding that civil 
suits involving  jockey Gary Birzer, the Guild, Dr. Gertmenian, and 
Mr. Fiss, among others, have been filed in the federal courts.  In 
the meantime, according to press reports, Dr. Gertmenian has come 
under investigation by the FBI and local police in Los Angeles, 
apparently for his suspect activities while heading the Guild.  
	The Guild's new leadership is here today to tell us about 
what Dr. Gertmenian left in his wake, the changes they have 
implemented to their organization, their efforts to find a long-term 
national manager, and the efforts they have undertaken to ensure 
that the Guild survives, and its permanently disabled members are 
not left helpless and unsupported.  I look forward to hearing about 
the consortium that the Guild, many race tracks, and several 
racing organizations have created to raise money to benefit disabled 
riders. 
	There are still only four states that provide workers' 
compensation programs for jockeys or exercise riders.  My home state 
of Kentucky almost passed a bill creating a workers' compensation 
program for jockeys racing there, but ran into some last minute 
problems.  I hope that eventually the various racing interests in 
Kentucky will be able to reach a compromise and create a workers' 
compensation program for the riders.  Since our hearings, however, 
many racetracks of their own accord have raised their on-track 
catastrophic insurance coverage to $500,000 or $1 million.  We are 
encouraged by this development, and I gather that jockeys and 
exercise riders are also.  
	On the matter of on-track insurance purchased by the race 
tracks, we have subpoenaed Ms. Rose Mary Williams, the Director of 
Racing at Mountaineer Race Track and Gaming Resort, to testify 
today.  Ms. Williams voluntarily testified at our November 17th 
hearing last year.  Additionally, after the hearing Mr. Stupak wrote 
 supplemental written questions directed to Ms. Williams and 
Mountaineer. Following Ms. Williams' written answers, Committee 
staff requested to interview Ms. Williams and discuss discrepancies 
between her oral testimony and written statement.  Ms. Williams, 
through her legal counsel, declined to be interviewed by Committee 
staff.  Accordingly, the Full Committee Chairman authorized a 
subpoena for her testimony today, so that we can hopefully get 
answers to the questions we wanted to ask. 
	I look forward to today's testimony and I thank the 
witnesses for their attendance.  	I now turn to the 
distinguished Ranking Member, Mr. Stupak, for the purposes of an 
opening statement.  

MR. STUPAK.  Thank you, Mr. Chairman.  
Last fall, this subcommittee held hearings into the state of the 
horse racing industry and the Jockeys' Guild.  While those were 
productive hearings, there are still several issues that need to be 
addressed from our hearings last fall.  On November 3rd, 2005, you 
and I, Mr. Chairman, requested that Secretary of Health and Human 
Services Leavitt conduct a study by NIOSHA of the safety conditions 
at horse racing tracks in the United States.  Secretary Leavitt 
finally agreed to the study on January 25th, 2006.  
However, it's now May 9th, some 6 months after we apprised the 
Secretary of the dire safety conditions in this industry, and we 
have no indication that any substantive work has been done.  
On November 2nd, 2005, the Democratic members of this subcommittee 
asked the National Labor Relations Board to repeal their antiquated 
rule reviewing jurisdiction over an effort by jockeys or other 
racetrack employees to organize for collective bargaining purposes 
in this dangerous industry.  Unfortunately, the NLRB has refused to 
change their rules.  Therefore, my office has begun the process of 
having legislation drafted to allow jockeys and riders to 
collectively bargain.  I hope to introduce this bill in the coming 
weeks.  
Our Government is not only failing in its duty to protect jockeys 
and exercise riders from the oppressive practices of the race tracks, 
it is actively preventing these workers from protecting themselves 
by permitting the race tracks to break up any attempts by the jockeys 
and riders to collectively improve their working conditions.  We in 
this country outlawed such practices over 70 years ago for other 
American workers, and it is time to provide the same rights to 
jockeys and riders.  
I do wish to join with you, Mr. Chairman, in sponsoring one of the 
solutions that falls squarely within our jurisdiction.  Your idea to 
amend the Interstate Horseracing Act to include jockeys and exercise 
riders in the revenue sharing from simulcasting of horse races may be 
the quickest solution to solving the health insurance crisis 
documented in our hearings last fall.  By including jockeys in the 
revenue sharing, ample financing will finally be made available for 
adequate ontrack and offtrack health insurance as well as a modest 
retirement fund for the human athletes that are the linchpins of 
this $26 billion industry.  
I found it interesting that during the Kentucky Derby last weekend 
Woodford Reserve Distillery was selling mint juleps with the 
proceedings going to what is essentially a retirement fund for horse 
races, I should say for race horses, yet there was no mention of any 
similar fundraising going on for the jockeys who risk their lives 
each day to earn millions of dollars for the owners and trainers of 
these horses.  Unlike retired race horses, many of the jockeys have 
families to support.  
Let me suggest that for the 2007 Kentucky Derby, it would be great 
to see a fundraiser with proceeds going to help defray costs for 
jockeys like Gary Birzer who are injured or paralyzed.  
Mr. Chairman, another issue that needs to be followed up is the 
testimony of Ms. Rose Mary Williams, and I am pleased to see that 
she will be back before us again today.  It is unfortunate, however, 
that her return is necessitated by the lack of candor in her 
testimony last fall.  
On November 17th, 2005, Ms. Williams, director of racing at 
Mountaineer Race Track in West Virginia, had ample opportunity to 
reply to this committee's questions regarding Mountaineer's failure 
to provide adequate ontrack accidental medical insurance for its 
jockeys.  You will recall that Mountaineer is where Gary Birzer had 
his accident that left him paralyzed for life.  
Ms. Williams chose to lead this subcommittee to believe that she was 
unable to obtain a quote for a million dollar insurance policy.  Twice 
she was questioned about it under oath, and twice she said that she 
could not obtain a quote for such a policy from her broker.  
We have documents to show that Ms. Williams together with another 
Mountaineer employee, Ms. Sandra Brokaw, solicited such a quote from 
Johnson & Anton Insurance Brokerage on February 16th, 2005.  Our 
documents show that they received an extensive quote back 2 days 
later, February 18th, 2005.  
Mr. Chairman, I'm not sure whether Ms. Williams' testimony to this 
subcommittee requires a review by the Department of Justice.  I am, 
however, certain that it was designed to deceive us.  Mountaineer is 
one of the most prosperous race tracks in the country.  
Unfortunately, it also has a reputation of one of the worst employers 
in the industry when it comes to caring about jockeys that make their 
profits possible.  Not only did Ms. Williams take no responsibility 
for the paralysis of Gary Birzer, she made no attempt to upgrade the 
woefully inadequate insurance that Mountaineer carried after this 
tragic spill.  
When questioned about it last November, her testimony led us to 
believe that adequate insurance simply was not available.  Now we 
find this is not true.  I look forward to hearing her explanation 
today.  
Mr. Chairman, my time is up, so I will yield back and look forward 
to this hearing. 
[The prepared statement of the Hon. Bart Stupak follows:]

PREPARED STATEMENT OF THE HON. BART STUPAK, A REPRESENTATIVE IN 
CONGRESS FROM THE STATE OF MICHIGAN 

Thank you Mr. Chairman.
 	Last fall, this Subcommittee held hearings into the state of 
the horse racing industry and the Jockey's Guild. While those were 
productive hearings, there are still several issues that need to be 
addressed from our hearings last fall.  
On November 3, 2005, you and I jointly requested that the Secretary 
of Health & Human Services, Mr. Leavitt, conduct a study by NIOSH of 
the safety conditions at horse racing tracks in the United States.  
 Secretary Leavitt finally agreed to the study on January 25, 2006.  
However it is now May 9th, some 6 months after we apprised the 
Secretary of the dire safety conditions in this industry, and we 
have no indication that any substantive work has been done.  
On November 2nd 2005 the Democratic Members of this Subcommittee 
asked the National Labor Relations Board to repeal their antiquated 
rule refusing jurisdiction over any effort by jockeys or other 
racetrack employees to organize for collective bargaining purposes 
in this dangerous industry.  Unfortunately, the NLRB has refused 
change their rules.   Therefore, my office has begun the process of 
having legislation drafted to allow jockeys to collectively bargain. 
 I hope to introduce the bill in the coming weeks. 
Our government is not only failing in its duty to protect jockeys 
and exercise riders from the oppressive  practices of the racetracks, 
it is actively preventing these workers from protecting themselves 
by permitting the race tracks to break up any attempts by the jockeys 
and riders to act collectively to improve their working conditions.  
We outlawed such practices over 70 years ago for other American 
workers, and it is time to provide the same rights to Jockeys and 
riders.  
I do wish to join with you Mr. Chairman in sponsoring one of the 
solutions that falls squarely within our jurisdiction.  Your idea 
to amend the Interstate Horseracing Act to include jockeys and 
exercise riders in the revenue sharing from simolcasting of horse 
races, may well be the quickest solution to solving the health 
insurance crisis documented in our hearings last fall.  By including 
Jockeys in the revenue sharing, ample financing will finally be made 
available for adequate on-track and off-track health insurance as 
well as a modest retirement fund for the human athletes that are 
linchpins of this $26 billion industry.  
I found it interesting that during the Kentucky Derby last weekend, 
Woodford Reserve Distillery was selling $1,000 mint juleps with the 
proceeds going to what is essentially a retirement fund for the race 
horses.  Yet there was no mention of any similar fund raising going 
on for the Jockeys who risk their lives each day to earn millions 
for the owners and trainers of these horses.  Unlike retired race 
horses, many of the Jockeys have families to support.  Let me suggest 
that for the 2007 Kentucky Derby it would be great to see a fund 
raiser with proceeds going to help defray costs for Jockeys like 
Gary Birzer who are injured or paralyzed! 
Mr. Chairman, another issue that needs to be followed up on is the 
Testimony of Ms. Rose Mary Williams and I'm pleased to see that she 
will be back before us again today.  It is unfortunate, however, 
that her return is necessitated by the lack of candor in her 
testimony last fall.  On November 17, 2005, Ms. Williams - the 
Director of Racing at Mountaineer race track in West Virginia - 
had ample opportunity to reply to this Committee's questions 
regarding Mountaineer's failure to provide adequate on-track 
accidental medical insurance for its jockeys. You'll recall that 
Mountaineer is  where Gary Birzer had his accident that left him 
paralyzed for life. 
Ms. Williams chose to lead this Subcommittee to believe that she was 
unable to obtain a quote for a million dollar insurance policy.  
Twice she was questioned about it under oath and twice she said that 
she could not obtain a quote for such a policy from her broker. 
We have documents to show that Ms. Williams, together with another 
Mountaineer employee Ms. Sandra Brokaw, solicited such a quote 
from Johnson and Anton Insurance Brokerage on February 16, 2005.  
Our documents show that they received an extensive quote back two 
days later, February 18, 2005.  
Mr. Chairman, I am not sure whether Ms. Williams' testimony to this 
 Subcommittee requires a review by the Department of Justice.  I am 
certain, however, that it was designed to deceive us. 
Mountaineer is one of the most prosperous racetracks in the country. 
  Unfortunately, it also has a reputation as one of the worst 
employers in the industry when it comes to caring about the jockeys 
that make their profits possible.  Not only did Ms. Williams take no 
responsibility for the paralysis of Gary Birzer, she made no attempt 
to upgrade the woefully inadequate insurance that Mountaineer carried 
after that tragic spill.  When questioned about it  last November, 
her testimony led us believe that adequate insurance simply was not 
available.  
I look forward to her explanation.   I yield back.  

MR. WHITFIELD.  Thank you very much, Mr. Stupak.  
At this time I recognize the full committee Chairman, Mr. Barton of 
Texas, for the opening statement he may want.  
CHAIRMAN BARTON.  Thank you, Mr. Chairman.  I submitted my written 
statement for the record.  I appreciate you doing the hearing.  I 
think we had a great, positive result Saturday at Churchhill Downs; 
showed horseracing at its best, with the Kentucky Derby and all the 
panoply that goes with that and the excitement.  Looking forward to 
the Triple Crown and hopefully this hearing will continue to shed 
light on what the Jockeys' Guild is doing.  It appears to me that 
they are moving in the right direction, and thanks to the leadership 
of you and Mr. Stupak, taking actions that should have been taken a 
long time ago, and hopefully on our second panel, we will get the 
witness who could have answered a few questions over the phone and 
been on and about her business.  Her counsel seems to think that it 
is their job to obstruct justice and truth.  We will get it one way 
or the other.  We will get that done, and I applaud Mr. Stupak for 
insisting that we get to the bottom of the discrepancies in that 
area.  So I look forward to the hearing and continuing the progress 
that we seem to be making in reforming the Jockeys' Guild.  Thank you. 
[The prepared statement of the Hon. Joe Barton follows:] 

PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN, COMMITTEE ON 
ENERGY AND COMMERCE 

Thank you, Chairman Whitfield, for holding this hearing and 
continuing your hard work on this issue.  
Last year, the Subcommittee undertook a serious examination of 
on-track injury coverage for people who work in horseracing.  We 
found out what every jockey and trainer already knows, that a 
billion-dollar sport can't seem to insure the people who do the work 
and risk their necks.  
In October of last year, representatives of the Jockeys' Guild 
testified about the health and welfare issues faced by the sport's 
riders, and to explain why the Guild's leadership chose in 2002 not 
to renew its members' on-track accident insurance.  For many years 
prior to that, the Guild had supplemented the on-track insurance 
provided by the race tracks to its members.  
The incredible testimony during that hearing, particularly the tragic 
story of jockey Gary Birzer, made it clear to me that the Guild 
needed a house-cleaning.  Mr. Chairman, the hearing you held in 
October plainly led the Guild's membership to the same conclusion. 
 Within a month, the Guild had fired Dr. Gertmenian, his staff, and 
his company.  
Then, last November, representatives from various racetracks, 
prominent horsemen's associations, and industry-related welfare 
groups, testified at a second hearing and answered our questions 
about the status of on-track insurance in the industry and about how 
to improve on-track injury insurance coverage for the industry's 
workers.  
Today we will hear from the Guild's new management team, to update 
the Subcommittee on the progress the Guild has made in rescuing 
itself from financial ruin.  Today's testimony will provide more 
details about how Dr. Gertmenian - a self-proclaimed master 
negotiator - left the Guild with its reputation in tatters and on 
the verge of financial collapse.  I hope that the Guild is on course 
to regain its financial footing, and will find ways of improving 
on-track injury coverage for jockeys.  
Finally, one of our witnesses, Ms. Williams, was subpoenaed to 
appear and testify today.  I authorized the issuance of that 
subpoena.  I didn't do so lightly, but while we are going to honor 
and protect people's rights against self-incrimination, this is not 
about invoking the 5th Amendment here today.  This is about simple 
 obstruction.  Our members and our staff are going to get to the 
truth even when attorneys advise clients to obstruct an 
investigation.  In this case, we had expected to get the information 
we sought with a simple interview, but our request was rejected.  
So instead of a simple interview, a witness has been subpoenaed to 
Washington to testify at a hearing.  When the Committee staff 
requests an interview to clarify some important issues that arise 
during a hearing, and is refused, we have no choice.  When we need 
to do our job, I will use the Committee's power to secure the 
information and testimony.  
Mr. Chairman, I look forward to today's testimony and yield back 
the remainder of my time. 

MR. WHITFIELD.  Thank you, Mr. Barton.  
At this time, recognize the gentleman from Texas, Mr. Burgess.  
MR. BURGESS.  Thank you, Mr. Chairman.  I'll submit my statement for 
the record so we can get right on to the witnesses. 
MR. WHITFIELD.  Thank you, Dr. Burgess. 

STATEMENTS OF DARRELL HAIRE, INTERIM NATIONAL MANAGER, THE JOCKEYS' 
GUILD, ACCOMPANIED BY LARRY SAUMELL, REGIONAL MANAGER; JOHN 
VELAZQUEZ, CHAIRMAN OF THE BOARD OF DIRECTORS, THE JOCKEYS' GUILD; 
AND BARRY BROAD, NATIONAL LEGAL COUNSEL, THE JOCKEYS' GUILD. 
  
MR. WHITFIELD.  At this time, I would like to call the first panel.  
Mr. Darrell Haire, who is the Interim National Manager of the 
Jockeys' Guild.  In addition, we have Mr. John Velazquez, who is a 
jockey but also Chairman of the Board of Directors of the Jockeys' 
Guild; Mr. Barry Broad, who's the National Legal Counsel for the 
Jockeys' Guild.  
If you three gentlemen would come forward and take your seat at the 
podium.  And then my understanding, Mr. Larry Saumell, who is the 
Regional Manager for the Jockeys' Guild, is also with us today.  
So I want to thank you gentlemen for taking time from your busy 
schedules to be with us.  Obviously, your testimony is quite 
important as we explore ways to address some safety issues but, 
more importantly, to look at ways to take care of insurance issues 
relating to jockeys.  
As you know, this is an Oversight and Investigations hearing, and it 
is our policy to take testimony under oath.  I would ask all four 
of you; do any of you have any difficulty testifying under oath or 
any objection to testifying under oath?  Certainly, you are, under 
the rules of the House and of the committee, entitled to legal 
representation.  Do any of you have legal representation with you 
today? 
Okay.  If you would stand and raise your right hand, I would like to 
swear you in.  
[Witnesses sworn.] 
MR. WHITFIELD.  Thank you.  You are now sworn in. 
And, Mr. Haire, we'll call upon you to give us your 5 minute opening 
 statement.  
MR. HAIRE.  Mr. Chairman.  
MR. WHITFIELD.  Be sure and turn your microphone on so we can hear 
you.  Thank you.  
MR. HAIRE.  Mr. Chairman, if you don't mind, I'd like Johnny 
Velazquez, if he could, to go first.  
MR. WHITFIELD.  Okay.  John Velazquez, as I told you, is Chairman 
of the Board of Directors, and we welcome you and recognize you for 
your 5 minute opening statement.  Be sure to hit the button so your 
microphone is on so we can hear your testimony. 
 	MR. VELAZQUEZ.  It's on now, right.  Okay.  
Mr. Chairman and the committee, I thank you for having us and having 
this opportunity to speak in front of you and try to update you on 
the things happening in the last few months and the work that we 
have done.  
My name is John Velazquez.  I'm the Chairperson of the Board of 
Directors of the Jockeys' Guild, and I am pleased to testify before 
this committee and update you on the conditions of the Jockeys' 
Guild.  
We have been working very hard since the removal of Mr. Gertmenian to 
restore a respectful relationship of mutual respect and understanding 
between the Guild and the horseracing industry.  While we may not 
always agree on issues, it is critical that we work together for 
the good of the sport and the welfare of our members.  
We have been meeting frequently in the last several months with the 
industry leaders to discuss how we can partner with them to ensure 
the needs of the jockeys are met.  As you know, for the past 60 
years the Jockeys' Guild has shouldered the burden of providing 
health insurance to its members, taking care of the temporarily 
disabled and trying to meet the needs of our permanently disabled 
riders who must be taken care of for the rest of their lives.  
We have tried to show the industry that shouldering this 
responsibility alone is virtually impossible for an organization 
with thousands of members to afford from its own resources.  This 
is made even more difficult because we must also represent our 
members on many other important issues the jockeys face daily as 
professional athletes.  
Today I am pleased to report to you that we have reached a historic 
agreement with the industry to create a new jointly administrative 
program to fund our program for permanently disabled riders.  This 
new group has pledged to raise at least $1 million annually to 
provide financial assistance and case management services to the 
61 jockeys that are currently permanently disabled and for those 
jockeys that will receive crippling injuries in the future.  
We are grateful that the tracks and horsemen are willing to step 
up to the plate and accept that the care of those who have given 
everything to the horseracing industry is the responsibility of the 
entire industry, not just the jockeys themselves.  It means a lot to 
us that the industry has taken this step, and I wish to publicly 
thank them today for their effort.  
Mr. Chairman, just a few weeks ago, I was injured in a race in 
Keeneland.  The horse broke down, and I was thrown.  The horse landed 
on top of me, and I broke my shoulder.  I was very lucky, very lucky, 
and very blessed.  I would say very blessed that I only sustained a 
broken shoulder blade.  The fact of the matter is, every time you 
leave the paddock, you really don't know if you are coming back.  
It can happen to any of us on any racing day.  
We need to know for the sake of ourselves and our families that if 
we are injured, we will receive the best medical care, and God 
forbid, if we suffer a devastating injury, we will be taken care 
of.  
There is much work to be done to reach this goal.  While many tracks 
have raised their coverage for ontrack accidents to a million, there 
are tracks around the country that have inadequate insurance 
coverage.  Some tracks still provide no coverage at all.  There is 
workers compensation coverage in only five racing States.  Our 
members should be covered in all States.  For many jockeys, health 
insurance is not affordable, given the low incomes.  We need to 
raise mount fees so that all jockeys who want health coverage can 
afford it.  
So, Mr. Chairman, we would like the industry to provide a retirement 
plan for its riders so that the jockeys who are too old or too sick 
to continue racing can live out their lives in dignity.  
Finally, and perhaps the most important, it is critical that we have 
a real seat at the table in the industry.  The Interstate Horseracing 
Act needs to be amended to give jockeys the legal rights along with 
the trainers and owners to a fair share of the revenue from the 
transmission of the horseracing signal.  That way, Mr. Chairman, we 
will have the resources we need to help ourselves.  
I am available to answer any questions you may have.  Thank you. 
[The prepared statement of John Velazquez follows:] 

PREPARED STATEMENT OF JOHN VELAZQUEZ, CHAIRMAN OF THE BOARD OF 
DIRECTORS, THE JOCKEYS' GUILD 

Mr. Chairman and Members of the Committee: 
	My name is John Velazquez and I am Chairperson of the Board 
of Directors of the Jockeys' Guild.  
	I am pleased to testify before this Committee and update you 
on the condition of the Jockeys' Guild.  
	We have been working very hard since the removal of 
Mr. Gertmenian to restore a respectful relationship of mutual respect 
and understanding between the Guild and the horseracing industry.  
While we may not always agree on issues, it is critical that we work 
together for the good of the sport and the welfare of our members. 
	We have been meeting frequently in the last several months 
with industry leaders to discuss how we can partner with them to 
insure that the needs of jockeys are met.  As you know, for the 
past 60 years, the Jockeys' Guild has shouldered the burden of 
providing health insurance to its members, taking care of the 
temporarily disabled, and trying to meet the needs of our 
permanently disabled riders-who must be taken care of for the rest 
of their lives.  We have tried to show the industry that shouldering 
this responsibility alone is virtually impossible for an organization 
with a thousand members to afford from its own resources.  This is 
made even more difficult because we must also represent our members 
on many other important issues that jockeys face daily as 
professional athletes.   
	Today, I am pleased to report to you that we have reached an 
historic agreement with the industry to create a new jointly 
administered program to fund our program for permanently disabled 
riders.  This new group has pledged to raise at least $1 million 
annually to provide financial assistance and case management services 
to the 61 jockeys that are currently permanently disabled and for 
those jockeys that will receive crippling injuries in the future.  
We are grateful that the tracks and horsemen are willing to step up 
to the plate and accept that the care of those who have given 
everything to the horseracing industry is the responsibility of 
the entire industry, not just the jockeys themselves.   It means a 
lot to us that the industry has taken this step, and I wish to 
publicly thank them today for their effort.  
	Mr. Chairman, just a few weeks ago, I was injured in a race 
at Keeneland.  The horse broke down and I was thrown.  The horse 
landed on top of me and broke my shoulder.  I was lucky, very lucky 
that I only sustained a broken shoulder blade.  The fact of the 
matter is that every time you leave that paddock, you really don't 
know if you're coming back.  It can happen to any of us on any race 
day.  We need to know, for the sake of ourselves and our families, 
and that if we are injured, we will receive the best medical care 
and--God forbid--if we suffer a devastating injury, we will be 
taken care of. 
	There is much work to be done to reach this goal.  While 
many tracks have raised their coverage for on-track accidents to $1 
million, there are tracks around the country that have inadequate 
insurance coverage.  Some tracks still provide no coverage at all.  
There is workers' compensation coverage in only 5 racing states.  
Our members should be covered in all states.  For many jockeys, 
health insurance is not affordable given their low incomes.  We 
need to raise mount fees so that all jockeys who want health 
coverage can afford it.  And some day, Mr. Chairman, we would 
like the industry to provide a retirement plan for its riders so 
that the jockeys who are too old or too sick to continue racing can 
live out their lives in dignity. 
	Finally, and perhaps most importantly, it is critical that 
we have a real seat at the table in this industry.  The Interstate 
Horseracing Act needs to be amended to give jockeys the legal right, 
along with trainers and owners, to a fair share of the revenue from 
the transmission of the horseracing signal.  That way, Mr. Chairman, 
we will have the resources we need to help ourselves. 
	I am available to answer any questions you may have. 

MR. WHITFIELD.  Thank you, very much for your testimony, 
Mr. Velazquez.  We appreciate it.  
Mr. Haire, I will recognize you for your opening statement. 
 	MR. HAIRE.  Thank you, Mr. Chairman.  
Mr. Chairman, and members of the committee, I am Darrell Haire, and 
I am the Interim National Manager of the Jockeys' Guild.  I am very 
pleased to be back here testifying before you.  When I was here 
last before the committee, the riders had just retaken control of 
our organization and we were trying to get on our feet.  I am 
pleased to report to you that we have restored order to the business 
of running the Guild.  It hasn't been easy and big challenges 
remain.  We have had to make some very tough decisions, but we are 
moving forward, and we are getting the job done.  
On the day Wayne Gertmenian and the Matrix team was terminated, we 
were left with $6,000 in the bank, nearly a half a million dollars 
in unpaid medical bills, disabled jockeys who needed to be paid, 
an accounting system that was in disarray, one employee, and a 
graduate student intern in the office.  Within a few days, we 
realized that we would have to move our office to avoid the double 
rent we were paying to Matrix.  
On that first day, Mr. Chairman, we decided that we would not 
declare  bankruptcy, and we would do everything in our power to get 
the Guild back on its feet and moving forward again.  Jockeys and 
their wives volunteered to work in our office, and we worked 7 days 
a week, 14 hours a day to get things moving again.  
Immediately, and taking a significant leap of faith, the Chairperson 
of the California Horse Racing Board, Richard Shapiro, authorized 
the payment of hundreds of thousands of dollars of back health 
insurance funds that had been withheld while the CHRB investigated 
allegations of financial misconduct by Wayne Gertmenian.  Shortly 
thereafter, led by Don Amos, Magna Entertainment Company, many race 
tracks began sending back media rights payments to the Jockeys' 
Guild.  And our members, the backbone of our organization, stuck 
with us.  
Our Board of Directors realized that in order to get our financial 
house in order, we needed to institute a series of painful fiscal 
reforms to cut costs.  These included increasing the eligibility 
requirements of our temporary disability program to a minimum of 
100 mounts in the current or previous calendar year; raising our 
dues by 25 percent, from $3 per mount to $4 per mount; creating a 
consistent policy in our permanent disability program so that all 
participants get the same benefits; requiring that all jockeys who 
are in arrears in health insurance premiums make arrangements to 
pay back their premiums or lose coverage.  Unfortunately, we have 
recently terminated approximately 100 jockeys from the health plan 
after making every effort to get them to pay the large premiums they 
owe.  And we have created a rules committee charged with ensuring 
that our members do not get behind in their health premium payments, 
and to take action if they do.  
In addition to fiscal reforms, we have instituted a number of 
institutional reforms to make our organization more democratic and 
more accountable to its membership.  At our recent national assembly 
in Dallas, Texas, we approved amendments to our bylaws that did the 
following:  established a new system of national direct elections of 
the Guild senate to be held next month in June and every 2 years 
thereafter.  Active jockeys would run for office and represent three 
regions of the country; a western, central, and eastern region.  
There will be nine senators elected from each region.  The 27 
senators elected would then elect a new Board of Directors, and 
that would be a nine-member Board of Directors.  
Finally, we have improved our previously nonexistent system of 
internal communications.  We have a website that is regularly 
updated with current information to our members, and also we are 
informing our members by mail throughout the country, written in 
both English and Spanish, of policies and issues that arise.  
We continue to represent our members vigorously at the race 
tracks, before the racing commissions around the country, and in 
front of State legislatures.  While we are not out of the woods yet 
and are still operating on a day-to-day basis, we are making 
progress towards restoring the integrity and strength of this great 
organization.  
Mr. Chairman, due to the determination of our members and help from 
our friends, including members of this committee, the Jockeys' Guild 
is moving again in the right direction.  And I thank you again for 
the opportunity to be here.  
[The prepared statement of Darrell Haire follows:] 

PREPARED STATEMENT OF DARRELL HAIRE, INTERIM NATIONAL MANAGER, THE 
JOCKEYS' GUILD 

Mr. Chairman and Members of the Committee: 
	I am Darrell Haire and I am the Interim National Manager of 
the Jockeys' Guild.  I am very pleased to be back here testifying 
before you.  When I was last before the Committee, we had just 
retaken control and were trying to get on our feet. 
	I am pleased to report to you that we have restored order 
to the business of running the Guild.  It hasn't been easy and big 
challenges remain.  We have had to make some very tough decisions, 
but we are moving forward and getting the job done. 
	On the day Mr. Gertmenian and the Matrix team was terminated, 
we were left with $6,000 in the Bank, nearly a half a million 
dollars in unpaid medical bills, disabled jockeys who needed to be 
paid, an accounting system that was in disarray, and one employee 
and a graduate student intern in the office.   And within a few 
days, we realized that we would have to move offices to avoid the 
double rent we were paying Matrix.  
	On that first day, Mr. Chairman, we decided that we would 
not declare bankruptcy, that we would do everything in our power 
to get the Guild back on its feet and moving again.  Jockeys and 
their wives volunteered to work in our office and we worked 7 days 
a week, 12 hours a day to get things moving again. 
	Immediately, and taking a significant leap of faith, the 
Chairperson of the California Horseracing Board, Richard Shapiro, 
authorized the payment of hundreds of thousands of dollars of 
back health insurance funds that had been withheld while the CHRB 
investigated allegations of financial misconduct by Dr. Gertmenian.  
Shortly thereafter, led by Magna Entertainment Company, many 
racetracks began sending back media rights payments to the Guild.  
And our members, the backbone of our organization, stuck with us. 
	Our Board of Directors realized that, in order to get our 
financial house in order, we needed to institute a series of painful 
fiscal reforms to cut costs.  These included: 
Increasing the eligibility requirements for our temporary disability 
program to minimum of 100 mounts in the current or previous calendar 
year. 
Raising our dues by 25%, from $3 per mount to $4 per mount. 
Creating a consistent policy in our permanent disability program so 
that all participants get the same benefits. 
Requiring that all jockeys who are in arrears in health insurance 
premiums make arrangements to pay their back premiums or lose 
coverage.  We have recently terminated approximately 100 jockeys 
from the plan after making every effort to get them to pay the 
premiums they owe. 
Creating a Rules Committee charged with insuring that our members do 
not get behind in their health premium payments and to take action if 
they do. 

    In addition to fiscal reforms, we have instituted a number of 
institutional reforms to make our organization more democratic and 
more accountable to its membership.  At our recent national assembly 
in Dallas, Texas, we approved amendments to our bylaws that did the 
following: 
  Established a new system of national direct elections of the Guild 
Senate, to be held in June of this year and every two years 
thereafter. 
 The Senators would run for office and represent three regions of the 
country, a western, central, and eastern region. 
  The Senators would then elect a new Board of Directors. 

     Finally, we have improved our previously nonexistent system of 
internal communications.  We have a web site that is regularly updated 
with current information to our members and we are informing our members 
by mail and in every jockeys' room in the country of new policies and 
issues as they arise. 
     We continue to represent our members vigorously at the 
racetracks, before the racing commissions around the country, and in 
front of state legislatures. 
     While we are not out of the woods yet and are still operating 
on a day-to-day basis, every day we are making progress towards 
restoring the integrity and strength of our organization. 
	Mr. Chairman, due to the determination of our members and 
help from our friends-including the members of this Committee-the 
Jockeys' Guild is moving in the right direction again. 
	Thank you again for the opportunity to be here today. 

MR. WHITFIELD.  Thank you, Mr. Haire.  
At this time, I would like to recognize Mr. Broad for his opening 
statement. 
 	MR. BROAD.  Mr. Chairman and members of the committee, my 
name is Barry Broad, and I am legal counsel and legislative 
representative of the Jockeys' Guild in California.  My firm was 
hired by former Guild National Manager John Giovanni in 1995, and I 
continued to represent the Jockeys' Guild right through last fall.  
A few days after Wayne Gertmenian's testimony before your committee, 
I severed my relationship with the Guild, feeling that I could no 
longer represent its membership in good conscience so long as 
Dr. Gertmenian and his management firm, Matrix Capital Associates, 
were employed by the Jockeys' Guild.  I then volunteered my services 
to those members of the Jockeys' Guild Senate and Board of Directors 
who wished to remove Dr. Gertmenian.  I was present during the 
emergency  meeting of the Jockeys' Guild that was held by telephone 
conference call which resulted in the termination of Dr. Gertmenian. 
 I was then appointed by the new interim Board of Directors as 
co-General Counsel of the Guild with Tom Kennedy of New York.  
Thereafter, I was in constant contact with the Monrovia police 
department and the FBI in the chaotic days following 
Dr. Gertmenian's removal to try to help ensure that evidence was 
preserved, and since then, I, along with many others, have been 
working on a daily basis to help this organization recover so that 
it can do its job of vigorously advancing the interests of 
professional jockeys.  
Let me just take a moment of personal privilege to say that it's 
evident from what this committee does, I mean people get cynical 
about government and politics and all that sort of stuff, but the 
oversight role that you played made a real fundamental difference 
in this organization.  But for what happened here last fall, I 
think that this organization would have been gone, completely gone 
by now.  
Today, I will fill the committee in on what we know about the conduct 
of Dr. Gertmenian and his apparent alter ego, Matrix Capital 
Associates.  It has fallen on my shoulders, I drew the short straw, 
I guess, to assist with the various investigations that have arisen 
from Dr. Gertmenian's tenure.  It is the position of the Board of 
Directors that only through total openness and transparency can this 
organization restore its credibility with your committee, State 
regulators, the racing industry, and its own members.  
First of all, it was immediately obvious that Dr. Gertmenian and the 
Guild's then General Counsel Lloyd Ownbey failed on a massive level 
to comply with your committee's subpoena.  I set about establishing 
a cooperative, professional, and mutually respectful relationship with 
your staff and began to send documents that were responsive to the 
subpoena to Washington.  I also worked with the FBI, who had served a 
subpoena, to help them locate Dr. Gertmenian and to give them 
information on how to try to get compliance with their subpoena.  
To this date, we have sent thousands of pages of documents to your 
committee, and I have invited your staff to come to the Guild office 
in California to inspect documents and to interview employees.  
Until your investigation is formally concluded, you have our 
commitment that we will continue to provide your staff broad access 
to the Guild books and records.  And I must say that I met with and 
have talked many times with Mr. Feddo, and this was a most cordial 
relationship, and it's sad that it ever got to the place that it 
was.  I find that incredibly baffling, or maybe not.  
Anyway, the following are the major findings of what occurred during 
the tenure of Dr. Gertmenian.  There was a systematic effort to 
mislead the Board of Directors and membership about the financial 
state of the Guild.  Dr. Gertmenian stated repeatedly that to Guild 
members and to the board that the Guild had accumulated a $3.5 
million war chest.  On the day he was fired, he told the senators 
that the Guild finances had never been better and again insisted 
that it had a $3.5 million war chest.  He said this when he knew 
full well that the Guild assets were nearly totally depleted.  
In another example of this pattern of misleading conduct, 
Dr. Gertmenian hired an attorney to represent the Guild before this 
committee and told members of his Board of Directors that another 
labor organization was paying for the cost of the attorney, when in 
fact the Guild paid for the cost.  As this committee uncovered, 
Dr. Gertmenian even attempted to assign an apparently inflated value 
to the services of consultants and even volunteers as a means of 
justifying the payments to Matrix.  
On the day that Dr. Gertmenian was fired, he caused more than 
$200,000 in checks to be issued to himself and Mr. Albert Fiss, 
leaving the Guild with just a few thousand dollars in the bank.  
These checks were written in direct violation of financial controls 
that were imposed by the Board of Directors prohibiting checks other 
than those to disabled riders to be issued in excess of $200 without 
the express written approval of the treasurer, and he had been 
following that in the week before.  So it was clear that he had 
knowledge of it.  
He even arranged that employees loyal to him would receive layoff 
notices so that they would qualify for unemployment insurance 
benefits when they were in fact voluntarily quitting employment.  
This could have the effect, we'll find out, of not only raising 
the unemployment insurance rates for the Guild but for past 
employers of those employees.  
In addition, they left with media rights documents that belonged to 
the Guild, which they only returned after I intervened with 
Dr. Gertmenian's criminal defense lawyer; computers, which we 
eventually got back; and financial records, some of which I think 
are still missing; and such personal property, collectible types of 
things reported in the press that seem to have disappeared as well.  
Over the previous months and years, restricted trust accounts had 
been spent down that should have been maintained.  These included 
trust accounts for health insurance reserves which were needed--which 
needed to be maintained in order to preserve the fiscal integrity 
of the Guild self-funded health insurance plan.  You can't have a 
self-funded health insurance plan and not have reserves against the 
day when claims exceed the premiums that you receive.  
Moreover, approximately $500,000 was depleted from savings accounts 
for individual jockeys that had been deposited with the Guild as an 
overpayment of dues.  Some of these personal savings accounts had 
balances of thousands of dollars, and at this point, until we 
generate a budgetary surplus, we can only honor requests for 
withdrawals on a partial basis when funds are available.  
Matrix Capital Associates was paid hundreds of thousands of dollars 
while Dr. Gertmenian was being paid a salary for full-time 
employment.  We suspect that little value was delivered by Matrix 
for the large sums of money that were paid out.  
In addition, associates of Dr. Gertmenian were paid tens of 
thousands of dollars for consulting fees that apparently resulted 
in the delivery of few actual services.  
Dr. Gertmenian offered select members of the Guild free health 
insurance, apparently in order to curry internal political 
support.  Such promises were made without the knowledge of the 
Board of Directors, and of course, at any point in a self-funded 
health plan that people stop paying health insurance premiums but 
receive the benefits, it means you're passing the cost along to 
everybody else.  So you are imperiling the plan.  It's a clear 
problem.  
Dr. Gertmenian allowed jockeys who failed to pay health insurance 
premiums to remain covered by the plan.  As a result, the amount of 
unpaid premiums reached a level of approximately $700,000.  This of 
course meant that there was cost shifting to other jockeys who were 
actually paying their premiums, causing the Guild's financial 
situation to worsen.  
Guild General Counsel Ownbey failed to inform his Board of Directors 
and apparently offered no legal advice to them whatsoever about the 
plainly oppressive terms of the personal services agreements with 
Dr. Gertmenian and Matrix.  Mr. Ownbey appeared to act as 
Dr. Gertmenian's personal attorney, not that of the Guild.  
Incidentally, when your committee subpoenas were delivered to the 
Guild and Matrix, I called Mr. Ownbey and told him, in my opinion, 
Dr. Gertmenian needed to secure separate legal counsel immediately 
since his interests and that of the Guild were separate and that 
Mr. Ownbey needed to represent the Guild's interests separate and 
apart from that of the personal interests of Dr. Gertmenian and 
Matrix.  That advice was evidently ignored.  
There were numerous--have I run out of time?  
MR. WHITFIELD.  You have.  About 3 minutes over.  
MR. BROAD.  Would you like me to continue?  
MR. WHITFIELD.  Why don't you summarize?  
MR. BROAD.  I'm sorry.  Let me just conclude by the few remaining 
points.  There were numerous acts of self-dealing in favoritism by 
Dr. Gertmenian, including things that we are just now investigating, 
like charging lots of meal expenses and so forth while he was not 
traveling.  The Guild, as your committee noted, paid double rent.  
It rented two adjoining spaces, one occupied by Matrix, one occupied 
by the Guild, and it paid both sides' rent, including a maintenance 
fee to Matrix, another little profit center, if you will, but there 
didn't seem to be any maintenance being delivered for that.  
Basically, while Dr. Gertmenian professed to be an international 
expert in business operations, he failed to operate the Guild in 
the most basic manner consistent with common and well understood 
business principles.  For example, a few months ago, I was 
horrified one morning when I found out that the Guild had had no 
workers comp insurance for the entire period that Dr. Gertmenian 
was there, which in California, I don't know in other States, it's 
a criminal offense to willfully fail to provide that insurance.  
These kind of things occurred.  
Finally, basic accounting practices were ignored, accounts were not 
kept up.  We had no idea how much income the Guild had, who in 
particular had unpaid premiums for health insurance and who they 
were, and we've had to catch up to all of that.  
I believe this gives you a flavor for what occurred during the 
period.  I am available to answer any questions that you might 
have.  Thank you for allowing me to testify today. 
[The prepared statement of Barry Broad follows:] 

PREPARED STATEMENT OF BARRY BROAD, NATIONAL LEGAL COUNSEL, THE 
JOCKEYS' GUILD 

Chairman Whitfield and Members of the Committee: 
My name is Barry Broad and I am legal counsel and legislative 
representative of the Jockeys' Guild in California.  My firm was 
hired by former Guild National Manager John Giovanni in 1995 and I 
continued to represent the Jockeys' Guild right through last fall.  
A few days after Wayne Gertmenian's testimony before your Committee, 
I severed my relationship with the Guild, feeling that I could no 
longer represent its membership in good conscience so long as 
Dr. Gertmenian and his management firm, Matrix Capital Associates, 
were employed by the Jockeys' Guild.  I then volunteered my services 
to those members of the Jockeys' Guild Senate and Board of Directors 
who wished to remove Dr. Gertmenian.  I was present during the 
emergency meeting of the Jockeys' Guild that was held by telephone 
conference call which resulted in the termination of Dr. Gertmenian. 
 I was then appointed by the new interim Board of Directors as 
co-General Counsel of the Guild.  Thereafter, I was in constant 
contact with the Monrovia Police Department and the FBI in the 
chaotic days following Dr. Gertmenian's removal to try to help 
insure that evidence was preserved, and, since then, I, along 
with many others, have been working on a daily basis to help this 
organization recover so that it can do its job of vigorously 
advancing the interests of professional jockeys.  
Today, I will fill the Committee in on what we now know about the 
conduct of Dr. Gertmenian and his apparent alter ego, Matrix 
Capital Associates.  It has fallen on my shoulders to assist with 
the various investigations that have arisen from Dr. Gertmenian's 
tenure.  It is the position of our Board of Directors that, only 
through total openness and transparency, can this organization 
restore its credibility with your Committee, state regulators, 
the racing industry, and its own members. 
First of all, it was immediately obvious that Dr. Gertmenian and 
the Guild's then General Counsel, Lloyd Ownbey, failed on a 
massive level to comply with your Committee's subpoena.  I set 
about establishing a cooperative, professional, and mutually 
respectful relationship with your staff and began to send 
documents that were responsive to the subpoena to Washington. 
 To date, we have sent thousands of pages of documents and I 
have invited your staff to come to the Guild's office in California 
to inspect documents and interview employees.  Until your 
investigation is formally concluded, you have our commitment that 
we will continue to provide your staff broad access to the Guild's 
books and records. 
The following are the major findings of what occurred during the 
tenure of Dr.. Gertmenian: 

1.  There was a systematic effort to mislead the Board of Directors 
and Membership about the financial state of the Guild.  
Dr. Gertmenian stated repeatedly that the Guild had accumulated a 
$3.5 million "war chest".  On the day he was fired, he told the 
Senators that the Guild's finances had never been better and again 
insisted that it had a $3.5 million war chest.  He said this when he 
knew full well that the Guild's assets were nearly totally depleted. 
In another example of this pattern of misleading conduct, 
Dr. Gertmenian hired an attorney to represent the Guild before this 
Committee and told members of his Board of Directors that another 
labor organization was paying for the cost of that attorney when, 
in fact, the Guild paid for the cost.  As this Committee uncovered, 
Dr. Gertmenian even attempted to assign an apparently inflated value 
to the services of consultants and even volunteers as a means of 
justifying the payments made to Matrix. 

2.  On the day that Dr. Gertmenian was fired, he caused more than 
$200,000 in checks to be issued to himself and Mr. Albert Fiss, 
leaving the Guild with just a few thousand dollars in the bank.  
These checks were written in direct violation of financial controls 
that were imposed by the Board of Directors prohibiting checks, 
other than those to disabled riders, to be issued in excess of $200 
without the express written approval of the Treasurer.  He even 
arranged that employees loyal to him would receive lay-off notices, 
so that they would qualify for unemployment insurance benefits when 
they were, in fact, voluntarily quitting employment.  This could 
have the effect of not only raising the unemployment insurance rates 
for the Guild but for past employers of those employees. 

3.  Over the previous months and years, restricted trust accounts had 
been spent down that should have been maintained.  These included 
trust accounts for health insurance reserves, which needed to be 
maintained in order to preserve the fiscal integrity of the Guild's 
self-funded health insurance plan. Moreover, approximately $500,000 
was depleted from the savings accounts for individual jockeys that 
had been deposited with the Guild as overpayment of dues.  Some of 
these personal savings accounts had balances of thousands of dollars 
and, at this point, until we generate a budgetary surplus, we can 
only honor requests for withdrawals on a partial basis when funds 
are available. 

4.  Matrix Capital Associates was paid hundreds of thousands of 
dollars while Dr. Gertmenian was being paid a salary for full-time 
employment.  We suspect that little of value was delivered by Matrix 
for the large sums of money that were paid out.  In addition, 
associates of Dr. Gertmenian were paid tens of thousands of dollars 
for consulting fees that, apparently, resulted in the delivery of 
few actual services. 

5.  Dr. Gertmenian offered certain select members of the Guild free 
health insurance, apparently in order to curry internal political 
support.  Such promises were made without the knowledge of the Board 
of Directors. 

6.  Dr. Gertmenian allowed jockeys who had failed to pay health 
insurance premiums to remain covered by the plan. As a result, the 
amount of unpaid premiums reached a level of approximately $700,000. 
 This, of course, meant that there was cost shifting to other 
jockeys, who were actually paying their premiums, causing the 
Guild's financial situation to worsen. 

7.  Guild General Counsel Ownbey failed to inform his Board of 
Directors and apparently offered no legal advice to them whatsoever 
about the plainly oppressive terms of the personal services 
agreement with Dr. Gertmenian and Matrix.  Mr. Ownbey appeared to 
act as Dr. Gertmenian's personal attorney, not that of the Guild. 
 Incidentally, when your Committee's subpoenas were delivered to the 
Guild and Matrix, I called Mr. Ownbey and told him that, in my 
opinion, Dr. Gertmenian needed to secure separate legal counsel, 
since his interests and that of the Guild were separate and that 
Mr. Ownbey needed to represent the Guild's interests separate and 
apart from that of the personal interests of Dr. Gertmenian and 
Matrix.  That advice was evidently ignored. 

8.  There were numerous acts of self-dealing and favoritism by 
Dr. Gertmenian, including charging meal and entertainment expenses 
to the Guild when he was not traveling on Guild business.  
Dr. Gertmenian caused the Guild to pay for the office rent of 
the space adjoining the Guild's office which was occupied by 
Matrix Capital Associates, a separate business entity, resulting 
in the Guild paying roughly double the rent for the space that 
it used.  As if that weren't enough, Matrix added a "maintenance fee" 
to the rent.  However, there is no evidence that any maintenance 
services were actually provided by Matrix.  Indeed, there was no 
written lease agreement between the Guild and Matrix or between the 
Guild and the property owner. Gertmenian also apparently permitted 
select employees to be reimbursed for personal expenses, including 
car repairs, dry cleaning, groceries, and other personal expenses. 

9.  While Dr. Gertmenian professed to be an expert in business 
operations, he failed to operate the Guild in a manner consistent 
with adherence to even the most common and well understood business 
principals.  For example, apparently during the entire period of his 
tenure, the Guild did not have a workers' compensation insurance 
policy in place to cover its own employees.  This exposed the Guild 
to enormous potential civil liability. In California, the failure 
to secure workers' compensation insurance is a criminal offense.  
Fortunately, no employee of the Guild suffered a work related 
injury.  Similarly, the Guild routinely failed to enter into 
written agreements for personal services agreements for its 
consultants and apparently did not even have a fee agreement 
with its General Counsel, Mr. Ownbey, contrary to California law 
and ethical standards.  Matrix Capital Associates was paid a 
monthly fee, but did not submit invoices and did not specify 
what services were being provided.  

10. When Dr. Gertmenian was fired and the new management had access 
to the accounting system, it was apparent that basic accounting 
practices had been ignored.  We did not even know which jockeys 
had paid their health insurance premiums and which had not.   
Large amounts of data related to jockey mounts had simply not 
been entered into the system, thereby making it impossible to 
ascertain how much money racetracks had forwarded to the Guild 
in the form of dues and health insurance premiums. 

I could go on and on, but I believe that you have the flavor of 
what occurred under the tenure of Dr. Gertmenian. 
I am available to answer any questions you might have.
Thank you for allowing me to testify today. 

MR. WHITFIELD.  Mr. Broad, thank you.  I can assure you that there's 
not anything you can tell us about Mr. Gertmenian that would surprise 
us because it was quite obvious that he was totally ripping off the 
Guild, and I do hope that the criminal investigations will continue 
and he will be charged with something.  That's not my decision to 
make.  But I want to commend all of you for the great work that you 
have done in trying to maintain the integrity of the Guild and 
hopefully rebuild it because it certainly has a vital role to play 
in this industry.  
Mr. Velazquez, I want to ask you a couple of questions.  You were 
injured recently at Keeneland, and one of the things that many of 
us have been focusing on, we know that this industry is fragmented, 
each State has different rules and each track operates in different 
ways.  Recently, for example, there was an accident up in Turfway 
Park where a horse went down and the jockey was killed, and we know 
that there have been a number of deaths over the last 4 or 5 years. 
 We also know that in the racing industry, it's not unusual that 
horses are administered certain drugs before a race or at various 
times, and we know that that is always a challenge and jockeys 
frequently do not know what the horse has in his system.  
When your horse went down, that horse was euthanized, is that 
correct?  MR. VELAZQUEZ.  That's correct. 
MR. WHITFIELD.  Do you know if a necropsy was performed on the horse? 
MR. VELAZQUEZ.  I'm sorry?  
MR. WHITFIELD.  Do you know if a necropsy was performed on the horse.
MR. VELAZQUEZ.  I don't know.  
MR. WHITFIELD.  It's my understanding, I may be wrong, it's my 
understanding a necropsy was not performed.  Also, when the horse 
went down in Turfway and the jockey was killed up there, it's my 
understanding that a necropsy was not performed.  
I do find it hard to imagine that there is not some uniform rule 
around the country that when these horses go down and jockeys go 
down, I mean, it would be very easy for three or four horses to go 
down if one goes down.  I do think that something we want to continue 
to look at is this whole policy of necropsies on these horses that 
go down on the track.  
I am assuming that, as a jockey and someone whose life is dependent 
upon safety, that you would certainly welcome necropsies as a matter 
of course on every horse that has to be euthanized on the track.  
MR. VELAZQUEZ.  We decided, actually, we started doing our own 
research about how many horses have been breaking down and all this 
stuff.  So for us to receive a piece of paper or some sort of 
response back that the situation with how the horses were treated 
afterwards or how many was broke down is very difficult for us to 
get any answers.  Basically we don't get--
MR. WHITFIELD.  I know you don't get any answers.  The public doesn't 
get any.  
MR. VELAZQUEZ.  We have been trying to implement new rules throughout 
the country that we get this information.  Obviously, until this 
point, we haven't got much.  
MR. WHITFIELD.  It's not going to be done until the race tracks 
and/or the racing authorities in each State or some Federal mandate 
demands that it be done.  Obviously, one reason it is not being done 
is the cost involved.  
I'm assuming, Mr. Haire, that you would value necropsies being 
performed on these horses, is that correct?  
MR. HAIRE.  Absolutely, sir.  
MR. WHITFIELD.  Okay.  Mr. Stupak had mentioned during his testimony 
that we are looking for ways to address this, and I do firmly believe 
from the analysis that I have done that the easiest, quickest way 
to address this issue on insurance would be in the Interstate 
Horseracing Act.  I say that because the 1978 act which provided 
the foundation is for simulcasting where most wagers are being 
conducted today; that's where most of the purses are coming from, 
that act allowed the horsemen's group, and we know that there is a 
different horsemen's group in every State, but predominantly it is 
the Horsemen's Benevolent Protective Association; that they have 
veto power over the simulcast agreement between the track and the 
simulcastors.  Because of that veto power, they receive an 
administrative fee for agreeing or not agreeing to the contract.  
The head of the Kentucky HBPA testified in Congress that the 
Kentucky HBPA alone receives right at a million dollars a year 
for simply agreeing to the contract.  To be truthful, if you 
multiply that by 38 States and jurisdictions and the money being 
paid to the horsemen's group, who certainly have an interest in 
racing, but there isn't any group in my view any more important to 
racing than jockeys, there is no reason that jockeys should not be 
able to get a part of that administrative fee, and whether it's paid 
directly to them or to a local racing authority with a mandate that 
the authority adopt a policy, an insurance policy, I personally 
think that would be the easiest, quickest, best way to go.  And I 
would just ask you all, you three and Mr. Saumell, if you want to 
testify, what you think about that concept?  
MR. BROAD.  I think we wholeheartedly agree with that.  The Jockeys' 
Guild finances these various health and welfare programs from a 
variety of different sources, most of which are depending on 
maintaining, to be frank, an absolutely cordial relationship with 
those with whom we may have an adversarial position on health and 
welfare issues, and that makes it very difficult for us to do our 
job.  We need to operate at a respectful hands-off kind of 
relationship, and that's what changing the law would allow.  
MR. WHITFIELD.  The reason the Horseracing Act is the way it is, 
is because the HBPA had a part in the adoption of the passage of 
that legislation, and I don't think the jockeys were at the table.  
But would you support that kind of a concept, Mr. Haire?  
MR. HAIRE.  Yes, sir.  
MR. WHITFIELD.  What about you, Mr. Velazquez?  
MR. VELAZQUEZ.  Absolutely, sir.  I think it would give us the 
resources so we can help our members with the proper insurance.  
Let me add, sir, that we help to bring a lot of revenue to the 
race tracks and to the horsemen's group also.  I can add myself 
obviously as a jockey and being one of the top jockeys in the 
country, we bring a lot of money to the table by the way they 
sell the signal.  Obviously not only by having the top jockeys 
and the signals sell the way they are, but they also need the 
lower jockeys that don't ride that many horses because they need 
to have a full race, 10-horse field, so everybody contributes 
to it.  I think we need that little piece of the table.  
MR. WHITFIELD.  I mean, from my perspective, the HBPA in Kentucky 
does not have any dues-paying members and yet they are speaking 
for, they say trainers and horsemen groups or owners, and they 
are the ones receiving the million dollars a year, and they are 
not purchasing any insurance for anybody I can see, except their 
own officers and no one else, and they are filing a lot of lawsuits 
over a lot of issues that they don't like to deal with.  If you 
multiply it by the other States--I mean, the thing I like about it 
is it would not take any additional money from the race tracks, it 
would simply be a redistribution of the fee that is already being 
paid.  And I still do not understand why the horsemen's group would 
be the exclusive group to receive the money.  
Now let me ask you, the sad thing about what's happened to the 
Jockeys' Guild, you all had a disability fund that had at least 
over a million dollars in it at one time; is that correct?  
MR. HAIRE.  Yes, sir.  
MR. WHITFIELD.  I'm sorry, Mr. Saumell.  
MR. SAUMELL.  A million-three.  
MR. WHITFIELD.  Then you had the race tracks, some of them had 
policies that they were paying for in some States in addition to 
the disability fund; is that correct?  
MR. HAIRE.  Paying for it.  
MR. WHITFIELD.  They were providing the coverage.  
MR. HAIRE.  In workmans comp States, yes, sir.  
MR. WHITFIELD.  Some of the tracks were even making payments to 
Jockeys' Guild in cash payments; were they not?  
MR. HAIRE.  The cash payments, the media rights.  
MR. VELAZQUEZ.  Media rights, yes.  
MR. WHITFIELD.  Okay.  And then, of course, after Gertmenian, the 
disability fund was wiped out, the tracks lost confidence in the 
Guild.  I guess the media payments are still being paid to the 
Guild; is that correct?  
MR. VELAZQUEZ.  Some of them.  Some of the race tracks.  By the end 
of last year, a lot of them stopped paying, and that's why we are 
in the situation we are in right now.  
MR. WHITFIELD.  How many race tracks are there in the country?  Does 
anybody know the exact number?  Okay, we'll get that.  My 
understanding is that some tracks voluntarily provide insurance 
coverage, which we applaud, other tracks do not, so there's no 
uniformity whatsoever.  So this is definitely an area that there 
needs to be some strong leadership in, and there is enough money 
in this industry to address this problem.  And, to me, it's not so 
much about the racing industry per se, but we're talking about 
health insurance here.  When jockeys are injured and there is no 
coverage, then they become a part of the Medicaid system, and the 
taxpayers pick up the fee, and that's running out of control, and 
we have a pool of money here that can address these problems, in 
my view.  
So I recognize Mr. Stupak for any questions he may have.  
MR. STUPAK.  Thank you, Mr. Chairman.  
Mr. Velazquez, you indicated in your testimony that there's this 
new jointly administered program to fund a fund for permanently 
disabled riders.  Who pays into that fund?  
MR. VELAZQUEZ.  It's going to be in the form of charities.  
There are going to be charity events, and the racetracks are 
going to donate some part of the money for disabled riders.  
MR. STUPAK.  Would this be a charity sponsored by the Guild, 
the tracks?  
MR. VELAZQUEZ.  All of us.  All of us, yes.  
MR. STUPAK.  Had any thought been given to doing something like we 
saw this weekend for the Kentucky Derby, this 24 carat gold plated - 
MR. VELAZQUEZ.  I saw that on TV.  Obviously, I'm hurt, so I was 
watching that on TV.  
MR. STUPAK.  What did you think?  
MR. VELAZQUEZ.  When they announced where the proceeds were going to, 
my mouth just dropped.  It's great that we're doing something, and 
I support it a hundred percent because I have done charities for 
retired horses myself, but we have human lives, and we have 
families, and we have children that depend on, and in this industry 
there is so much money, and it saddens me that they forget us.  
They always put the jockeys to the bottom of the list.  It's always 
the last thing they could think about.  
Here we are, the human lives, a huge part of the business, and we 
always are the last ones to get a percentage of the percentage of 
the percentage.  
MR. STUPAK.  Have your charity check with Woodford Reserve, maybe they 
will do something for you this year.  Mint from Morocco, ice from the 
Arctic Circle and sugar from the South Pacific, all served up in that 
cup with a silver straw.  Sounds pretty intriguing.  
What do riders have for, including exercise riders, what do they have 
for retirement?  Social Security?  
MR. VELAZQUEZ.  I'm sorry? 
MR. STUPAK.  Exercise riders, what do they have?  
MR. VELAZQUEZ.  No retirement, sir.  
MR. STUPAK.  All based on your earnings?  
MR. VELAZQUEZ.  Earnings and whatever you pay into Social Security.  
MR. STUPAK.  The Chairman asked you if tracks were withholding 
payments for a while, probably because they lost, I don't know why, 
I guess we would have to ask tracks, but some are paying again and 
others are not.  
MR. VELAZQUEZ.  Yes.  Some of them started paying the money received 
from media rights.  
MR. STUPAK.  Is that mandatory?  
MR. VELAZQUEZ.  That's the problem that we had.  The contract that we 
had in the past with the race tracks for the media rights, it was 
called--not mandatory.  What was the word they use in this country?  
MR. BROAD.  Let me explain what it was.  Historically, it was a 
contract negotiated with the TRA.  But then to make it enforceable 
against any individual track, the Guild would then have to go from 
track to track to track, and I think there are over a hundred 
tracks, basically to try to make it binding on each particular 
track.  Otherwise, it was voluntary.  
During the period of Dr. Gertmenian, and maybe slightly before, 
these individually binding agreements were allowed to lapse so that, 
at this point, none of them are actually obligated contractually to 
pay anything.  Some of them are paying voluntarily the amount they 
owed under the existing agreement.  
MR. STUPAK.  So there's no real recourse.  
MR. BROAD.  No, there's not.  
MR. HAIRE.  Now that some of these race tracks with the million 
dollar policy, or half a million, they are not paying the media 
rights because they are paying the premiums, and that's their 
responsibility, we feel.  That's the cost of doing business to 
take care of these jockeys, cover them, but now I guess they don't 
think we have media rights.  
Now they are saying that's always been a question in their mind, and 
now some race tracks are paying, and there are a lot of race tracks 
that are paying.  
MR. STUPAK.  But if a race track doesn't pay, you have no recourse 
and riders, I should say jockeys, have to ride if they are going to 
get paid, if they're going to make a living; right?  
MR. VELAZQUEZ.  Exactly, yes.  Basically, a lot of the money is used 
for health insurance.  Media rights is money--obviously, it was used, 
most of it, for disabled riders, and part of the money will go for 
health insurance.  It was set up for many years.  Obviously with the 
health insurance coverage, it's tripled for the last 4 years.  The 
cost of living is much higher.  
MR. STUPAK.  I want to ask more questions about the tracks.  
Mr. Saumell, you're the Jockeys' Guild representative for riders 
in West Virginia at Mountaineer and Charles Town.  
MR. SAUMELL.  Yes, sir.  
MR. STUPAK.  Do you visit the jockeys' room at the racetracks 
regularly?  
MR. SAUMELL.  I'm probably at Mountaineer six times a year, and 
Charles Town six to eight times a year.  
MR. STUPAK.  Have you been to Mountaineer and Charles Town since our 
hearing in last November?  
MR. SAUMELL.  I was there twice this year already.  
MR. STUPAK.  I want to ask you about exhibit number 3. Is there a 
book with some exhibits?  It would be a binder.  
MR. SAUMELL.  Number 3, sir?  
MR. STUPAK.  Number 3.  In there, it says document number 3 is 
titled:  Questions from the Honorable Bart Stupak and answers from 
Ms. Rose Mary Williams.  I refer you to question 11, it reads, 
"have you or anyone at Mountaineer that reports to you ever pressured 
a jockey that objected to track or weather conditions to ride in a 
way"--and it says please also note that the answer is supplied by 
Ms. Williams--and she says, "I have never pressured a jockey to ride 
if a jockey objected on the basis of weather or track conditions; to 
my knowledge no one who reported to me has done so either."  
Let me ask you, in your experience in talking with these jockeys, 
do you have reason to believe what Ms. Williams told this committee 
last November about not pressing jockeys to ride?  
MR. SAUMELL.  I would say that's an inadequate statement.  
MR. STUPAK.  Inadequate statement.  What would you base your opinion 
that this was an inadequate statement that she gave the committee?  
MR. SAUMELL.  Riders have been pressured to ride under inadequate 
conditions.  
MR. STUPAK.  In what way?  
MR. SAUMELL.  Well, when a track condition is bad, it's bad.  And it 
comes down to when riders collectively want to join together and 
cancel racing, it's come to the point where, in Mountaineer, they're 
not allowed to do that.  
MR. STUPAK.  What do you mean they are not allowed to?  How would 
they be forced to ride if they don't feel it's safe to ride?  
MR. VELAZQUEZ.  They tell the riders go somewhere else.  
MR. SAUMELL.  They are not allowed to collectively join together 
and discuss the conditions of the racetrack.  
MR. STUPAK.  If I'm a rider at Mountaineer, and I feel I don't want 
to ride, do I have a contract, or is my ability to earn my income 
based upon every race and every ride I may take?  
MR. VELAZQUEZ.  Yes.  You have to go and ride, otherwise you don't 
get paid.  When you get the conditions of the track unsafe or 
whatever reason it is, now the guys are coming back, look, the 
track isn't safe, unsafe for the horses, unsafe for the jockeys 
themselves, so now they have to talk to management to agree on 
something; we can't continue racing.  Well, you can be forced.  If 
you don't go and ride, you have got to be out of here.  
MR. STUPAK.  I know very little about your profession, but if I'm 
riding, don't I work for an owner of a horse, don't I work for that 
owner of that horse?  
MR. VELAZQUEZ.  Yes, yes.  
MR. STUPAK.  Wouldn't it be in my best interest to say not only is it 
unsafe but wouldn't it also be unsafe for the horse?  
MR. VELAZQUEZ.  Yes.  
MR. STUPAK.  Can race track owners or owners or managers at let's say 
Mountaineer or Charles Town, if I said I'm not going to race, could 
they assign a different rider to race my horse?  
MR. VELAZQUEZ.  Yes.  
MR. STUPAK.  But isn't the contract or the agreement to ride between 
me and the owner?  
MR. VELAZQUEZ.  Basically, if you're not riding, you say I'm not 
riding for whatever the reason.  They go and ask the next guy.  If 
you don't ride here, you have to go somewhere else.  Basically what 
happens is they usually get the guy that does not get to ride that 
many races or does not do as well.  So now he's put in a bad place 
where, if I don't ride here, I have to go somewhere else.  
MR. STUPAK.  But if I feel as a jockey that it's unsafe for me, it's 
also unsafe for the horse. 
MR. VELAZQUEZ.  Yeah, but they add pressure to it. 
MR. VELAZQUEZ.  It happens everywhere in the country.  
MR. STUPAK.  Sure. 
MR. VELAZQUEZ.  I was told 3 years ago on one racetrack if I didn't 
do what they wanted me to do--I'm a jockey.  The last 3 years in the 
country I was told by somebody, one of the managers, that if I didn't 
take a picture after the winner's circle, which has nothing to do with 
me, I was not to ever ride on that racetrack again.  This is me, 
that--
MR. STUPAK.  So what--without some kind of legal rights and, as I've 
mentioned before, collective bargaining, National Labor Relations 
Board, what recourse do you have now?  
MR. VELAZQUEZ.  What resources?  
MR. STUPAK.  What recourse.  How can you stand up to the track owners 
or managers?  
MR. VELAZQUEZ.  None.  You can't do anything. 
MR. SAUMELL.  We have no collective bargaining rights.  You meet, 
and you decide, the riders, take it upon themselves because the 
riders are the ones that if it's that dangerous, they don't want to 
ride --
MR. VELAZQUEZ.  That's the only way we take care of one another.  
The message is, we go out there and try to kill ourselves, or we 
take care of one another and just walk out of here all together.  
That's the only way.  
MR. STUPAK.  Mr. Velazquez, you're one of the top riders.  Wouldn't 
it be in the track's best interest to keep you happy and keep you 
riding at that track?  
MR. VELAZQUEZ.  Somebody else will take my place, sir.  
MR. STUPAK.  Sure.  But aren't you sort of a draw, much like the 
horse you may be running or riding?  
MR. VELAZQUEZ.  I'm sorry?  
MR. STUPAK.  Aren't you, yourself, being one of the top jockeys in 
the country, being a draw?  
MR. VELAZQUEZ.  Yes.  
MR. STUPAK.  Wouldn't people love to see you ride?  
MR. VELAZQUEZ.  Yes, I would believe so.  But if I would not go out 
there, they will put somebody else to fill my place.  They will take 
the chances.  The revenue would be lower, obviously, but they still 
have the race.  That's how they break it up all the time.  
MR. STUPAK.  That's what I'm learning in this third hearing we've 
had now, Mr. Chairman.  I'm finding it interesting as I'm learning 
more and more about this industry.  Thank you. 
MR. WHITFIELD.  I want to ask a few more questions.  Mr. Velazquez, 
we had talked about how you work for the owner of the horse, but I 
think practically speaking, while technically that may be true, 
in actual practice you really work for the trainer, don't you?  
I mean, doesn't the trainer really make a lot of the decisions? 
MR. VELAZQUEZ.  A lot of them do, but a lot of owners do as well. 
 It has to be a communication between the trainer and the owners. 
 I mean, basically we work for everybody in the racetrack.  
MR. WHITFIELD.  Right.  
MR. VELAZQUEZ.  I mean, we have to follow the rules.  
MR. WHITFIELD.  Right.  
MR. VELAZQUEZ.  We can get fined if we're not on time for whatever 
reason.  We can be thrown out of the racetrack for whatever reason 
if you don't follow the rules.  We get fined if you get up--let's say 
that I'm going down the lane, and my horse is not going well, and 
he's just not going well.  And I know for a fact the horse is not 
going well.  Now I have to hold him together so he doesn't break 
down, so he doesn't fall down.  
MR. WHITFIELD.  If your horse is not going well during the warm-up, 
don't you have the option of just saying--
MR. VELAZQUEZ.  Oh, I could do that, too, but it would have to be 
really bad for the horse not to race though.  But it could happen 
during the race.  

The horse could warm up right now, sir.  You gallop to the gate, 
the horse warms up perfect, nothing wrong with it.  It would break 
from the gate and would clip another horse's heels, or hit 
themselves or whatever reason; it could stumble out of the gate.  
Now the horse is not going well.  Now you are taking the chance, 
letting him see how it feels.  Now they're changing the stride.  
Now they're not going well at all.  So let's say I'm going towards 
the wire now, and he's not feeling very well, it's getting wobbly 
underneath myself, and I have to stand up before the wire, and God 
forbid lose, third or fourth place, and they are calling to the 
stewards or racetrack or whatever it may be.  Now I'm getting fined 
because I'm standing up before the wire because I cost the bettors 
the place.  So who am I working for?  I'm working for the owners.  
I'm working for the racetrack.  MR. WHITFIELD.  So you would be 
fined.  MR. VELAZQUEZ.  I'm getting fined by just trying to save 
myself, saving the horse, obviously.  I think more damage if I 
continue riding the horse.  MR. WHITFIELD.  How much of a fine?  
MR. VELAZQUEZ.  It could be from $100 to $250.  It all depends on 
where you are.  MR. WHITFIELD.  Okay.  Were you scheduled to ride 
in the Derby before your accident?  MR. VELAZQUEZ.  Yes, sir.  
MR. WHITFIELD.  Who were you scheduled to ride?  
MR. VELAZQUEZ.  The horse that finished second.  Bluegrass Cat.  
MR. WHITFIELD.  Yeah, Bluegrass Cat.  Okay. 
MR. VELAZQUEZ.  By the way, I'm speaking here because I think a 
voice needs to be heard, and this is going to hurt me more than 
anything else.  
People, they're very influential and very powerful in the business, 
that I know for the fact me talking to you and the way I'm talking 
and exposing all this out, there are people that would never ride me 
again, maybe take a year or two.  I mean, I was warned by Gary Bailey, 
Jerry Stevens when I took this job early January, December, be careful
what you said because there will be people in this industry that 
never ride you again. 
MR. WHITFIELD.  You are taking a position with the Jockeys' Guild, 
you could theoretically be blacklisted by certain people.  
MR. VELAZQUEZ.  Well, could be.  At least I have a good job that I 
have really good owners that I ride for, and I have a good trainer 
that I have good relationship, and, I just didn't believe that 
something like that would happen to me.  But, I'm going to take my 
chances and see what happens, and whatever comes with it, I think 
I'm a big boy and that I take whatever comes to me.  
MR. WHITFIELD.  Well, we know it's a dangerous sport.  We know it's 
a popular sport.  We know there's a lot of money in it.  And I think 
all of us have a responsibility to do everything we can to make it 
as safe as possible with the guidelines and provide adequate 
insurance for people involved, and I think there's enough money to 
do that.  
How many jockeys are there in the U.S.?  
MR. SAUMELL.  Approximately 1,800 that are licensed.  
MR. WHITFIELD.  Eighteen hundred?  
MR. VELAZQUEZ.  Twelve hundred riders actually do ride like--the 
races, yeah. 
MR. WHITFIELD.  So, 1,800 jockeys and warm-up riders, is that what 
we're saying?  Or 1,800 jockeys?  
MR. HAIRE.  Eighteen hundred riders who are licensed. 
MR. BROAD.  Some of them ride very few races.  Would you say, 
gentlemen, it's about 1,200 are the ones that are riding maybe more 
than 100 races a year or something, ride the vast majority?  
MR. VELAZQUEZ.  A lot of them, they carry jockey license, those 
could be S.S.I. riders and the--also, but they have a license where 
they can go and ride a race or two.  
MR. WHITFIELD.  Let's say that Mr. Stupak and I are jockeys, which 
no one would ever hire us, but if we're jockeys, we can voluntarily 
pay our $4 mount fee to the Jockeys' Guild.  We don't have to do it. 
MR. HAIRE.  That's correct.  
MR. WHITFIELD.  It's up to us.  If you can do it.  Hopefully we're 
in a position you can get insurance. 
MR. HAIRE.  Representation.  
MR. WHITFIELD.  Okay.  Okay.  
MR. VELAZQUEZ.  Yes, sir.  Can I have another minute, another find 
that I have just last year to see who will I be working for, because 
I don't understand it if it's just the owner or the trainer or the 
racetrack.  
Let me tell you that last year, it was the fall last year--the year 
before, I'm sorry.  This is about a year and a half ago.  Obviously I 
ride a lot of horses for the owners.  I don't remember which one it 
was, and he put a few horses up.  Just open up.  To tell you the 
truth, I hate it.  I don't like working all day, and I have to go 
work at night.  
So I was supposed to go and ride the stake.  So he named me on a 
couple horses before the stake, and he ended up scratching the horse
 and the stake.  So he told me, look, you don't have to go.  I'm 
going to take you off the other horses.  And I was naming a horse a 
friend of mine which I didn't have to go.  I didn't have any 
commitment to go because that's a place I don't like to go.  So he 
said to me, you don't have to go.  But the next day I'm called by 
the stewards and the Meadowlands, and they told me that I needed to 
pay a fine because I didn't complete my business.  I didn't fulfill 
my--
MR. SAUMELL.  Your obligation.  
MR. VELAZQUEZ.  My obligation.  And I said, excuse me, sir?  I wasn't 
even supposed to go there.  I was named on the horses by my trainer, 
who told me that I didn't have to go.  So I talked to him myself.  
I said, what happened?  They're fining me for not going that night.  
He said, I told them I was taking you off the horses.  If anyone 
needed to be fined, it was me, because I was the one that put you on 
the horses.  
Well, I didn't pay the fine, sir, because I didn't think it was my 
fault by whatever.  So a month later they called--actually, it was 
Aqueduct.  A month later they called, Aqueduct Racetrack.  The 
steward called me in.  If I did not pay the fine, I was not allowed 
to ride in New York because I didn't pay the fine in Jersey.  
So who am I working for?  I mean, we have so many bosses, you don't 
know where it's coming from.  
MR. WHITFIELD.  Yeah, I understand.  
MR. VELAZQUEZ.  Ultimately I ended up paying the fine so I could 
ride at Aqueduct.  
MR. WHITFIELD.  Well, thank you for sharing that with us.  That does 
provide some additional input.  
MR. SAUMELL.  I just would like to clarify a statement earlier 
because I noted Johnny has--rides a lot of different racetracks 
and a lot of higher-quality racetracks than some of the ones that 
I represent, but when I was trying to get to the fact about 
Mountaineer, if their conditions aren't up to the standards of the 
rest of the racetracks in the country, they are below most 
standards.  The racetrack and the track superintendent might be one 
of the worst in the country.  Talking to him, you get no response; 
and the jockey get no respect there whatsoever.  
MR. WHITFIELD.  Could you give us some examples of something that's 
below standard?  
MR. SAUMELL.  Standard?  Well, the clods can be about as big as 
this microphone on the base of it, a clod that big where-- 
MR. WHITFIELD.  Ordinary clod on the track?  
MR. SAUMELL.  Yeah.  All over the racetrack.  And they'll tell you 
they're not there.  I say, well, I guess everybody else just doesn't 
see them, or all the jockeys are wrong because--
MR. WHITFIELD.  Is there any uniform reporting of accidents on a 
racetrack?  
MR. SAUMELL.  Well, in 2000, Mountaineer had the highest accidents 
in the United States.  
MR. WHITFIELD.  Do you know the number?  
MR. SAUMELL.  Thirty-one percent of all the accidents in the United 
States happened in Mountaineer in 2000.  
MR. WHITFIELD.  Thirty-one percent of all the accidents on the 
tracks in the U.S. happened on Mountaineer?  
MR. SAUMELL.  Um-hum, and that was by Mather & Co. 
MR. HAIRE.  I used to attend that racetrack about 3 years ago, 3 
or 4 years ago.  When I started going there, the riders right away 
would come to me and say, Darrell, you don't know what goes on here. 
 We are so intimidated in the middle of winter when the racetrack's 
bad, the weather's bad, the general manager would come in and just 
tell us, basically you need to go out there and ride; otherwise 
pack your tack and leave.  And they would be intimidated.  That's 
all I would hear.  They would leave and they had nowhere else to 
go.  So they were more or less had to make a living and go out there 
against their will.  But they're telling you, if you don't like it, 
then leave.  We don't need you here.  
MR. WHITFIELD.  Well, are there plenty of jockeys that would ride?  
Wouldn't that stop their race meet if the jockeys left?  
MR. SAUMELL.  Well, I'll give you an example, sir.  Every other 
racetrack in the country where slots have been implemented, the 
racing colony has progressively changed and gotten better and 
better and better.  The racing colony at Mountaineer is the same 
racing colony that they've had the last 10 years.  Riders don't go 
to Mountaineer.  There has to be a reason, because there's an awful 
lot of money given away, but you don't see new faces.  If you go to 
Charles Town or Prairie Meadows or Delaware Park, some of the top 
riders in the country are going to those racetracks to ride.  You 
don't get the top riders in the country going to Mountaineer to 
ride.  
MR. WHITFIELD.  Thank you.  We will certainly get into more in 
this, and we want to maintain dialogue with you all.  
I want to ask one more question, and then I will recognize 
Mr. Stupak.   And I haven't talked to Mr. Stupak in great detail 
about this, but if Mr. Stupak and I came to an agreement and 
introduced legislation to amend the Interstate Horse Racing Act so 
that the jockeys had some say so over approving the simulcast 
agreement; and as a result of that, you received a certain 
percentage of the money that the horsemen's group receives, and/or 
the racing authority received that with a mandate that they provide 
insurance for the jockeys, for the backside people and so forth, 
conceptually, is that something that you all could support?  
Recognizing that there's some details to--
MR. HAIRE.  Absolutely.  Absolutely.  
MR. VELAZQUEZ.  I support it, sir; but I have to say that it's not 
going to sit very well for my business, if you will.  It's going to 
be a lot of horsemen who will be mad about, that they're losing 
their revenue, and they're going to take it out somewhere.  
But also, I think there's a lot of issues they should be covering 
also.  They put it on and wear a helmet and risk their lives as 
well by working in the racetrack.  I think they should be covered 
also.  
MR. WHITFIELD.  I haven't really figured out myself who the 
horsemen's group really represents, since they have no dues-paying 
members.  
MR. VELAZQUEZ.  So it's very difficult for us.  I support anything 
that's going to help our Guild and our members; and obviously, we 
need some sort of resources that they will help better to--to 
support  disabled riders and their families, obviously.  So it's 
just a very touchy situation when we go and lose something like that 
against the horsemens.  
MR. WHITFIELD.  I know, but let me just say this.  But if the 
jockeys had been organized back in 1978 and were sitting there 
working on this legislation, it would have been very easy to have 
included them as well as the horsemen's group as a recipient of some 
of these funds.  
MR. HAIRE.  I'm a little confused about how that--we weren't even 
included.  I guess the jockeys aren't included--or not horsemen.  
Jockeys aren't horsemen?  We were never even included.  And when I 
bring this up to some horsemen, they'll say, well, you are included, 
Darrell, in the purses.  You know--
MR. WHITFIELD.  They're included in the purses, too.  
MR. HAIRE.  We had no say-so, and I guess jockeys aren't horsemen. 
MR. WHITFIELD.  Well, I'll recognize Mr. Stupak.  
MR. STUPAK.  Mr. Broad, last hearing or so I remember hearing 
something about an endowment fund that the guild had.  And it seems 
to me that contributions were supposed to be made; nothing could be 
paid out until it reached a certain limit.  What has happened to 
that fund?  Was it funded during Dr. Gertmenian's reign, or what 
happened there?  
MR. BROAD.  Money was transferred from the Disabled Jockeys Fund 
that the Guild had into that endowment.  Fortunately the money was 
preserved in it.  There was also additional money that came in as a 
result of legislation that we got passed in California that was 
adding money to that endowment. 
We did have to go through a little struggle after November to get 
new people elected to the Board of Directors of that endowment; and 
we finally succeeded in getting Mr. Shapiro, the Chair of the CHRB; 
and John is on there, Velazquez; Darrell is an ex officio member.  
Who else did we get on there?  Lafitte and Kay--so that we felt 
confident that it was--there was great resistance from Mr. Fiss 
about leaving.  We got him to resign, and so we feel that money is 
safe.  What's a little problematic is its bylaws remain the same, 
and it can't pay out anything until it reaches $10 million in the 
corpus of that endowment, and we probably would need that sooner 
than that.  
MR. STUPAK.  Where are you now with the corpus?  How much?  
MR. BROAD.  I believe it's about $2 million.  
MR. STUPAK.  Long ways to go.  
MR. BROAD.  Is it 1.5? 
MR. VELAZQUEZ.  1.3 and change.  
MR. BROAD.  1.3, all right.  
MR. STUPAK.  So it's a long ways to go.  
MR. BROAD.  It's got a long ways to go.  
MR. STUPAK.  The Chairman said in his opening statement--and I can't 
remember exactly.  He said something like $116- or $161 million.  
Almost was his wage and weekly.  
MR. WHITFIELD.  One hundred nineteen on the Derby alone.  
MR. STUPAK.  One hundred nineteen in the Derby alone.  But there's 
no workman's compensation in Kentucky for riders, right?  
MR. HAIRE.  No, sir.  Almost.  Almost.  
MR. BROAD.  And what's worse, we're facing a problem in Louisiana, 
which is a State without workers' compensation, where someone has 
introduced legislation that is moving through the Louisiana 
legislature that would also make it impossible for jockeys to sue 
for negligence.  So they could neither recover for negligence, like 
if they got poor medical treatment, or get workers' comp.  
MR. STUPAK.  Other than this benefit you put together through your 
charitable organization to help raise some money for those people 
who are permanently disabled, has any other measures come forward 
since we've had our last hearing--I think the last one was in 
November--to help out the jockeys?  Anything further to--any other 
States talk about workers' comp, try to run some legislation?  Any 
other innovative ways to try to help you out?  
MR. BROAD.  Yeah.  In the State of Ohio, several of the tracks 
actually went out and created--under a kind of law sort of unique to 
Ohio--which allows independent contractors to buy workers' comp on 
themselves, and a couple of Ohio tracks created a program in which 
they assisted the jockeys in purchasing the insurance and basically 
signed an agreement that they would pay the premium.  
MR. STUPAK.  Who'd pay the premium, the tracks?  
MR. BROAD.  The tracks. 
MR. STUPAK.  So would it be the regular riders, or if Mr. Velazquez 
came and rode in Ohio, would he be covered under that ride, or only 
those regularly riding?  
MR. BROAD.  It would be anyone who rides there, I believe.  
MR. VELAZQUEZ.  That's the problem.  I don't think we're completely 
secure on that yet.  
MR. HAIRE.  My understanding is they do have to sign up when they do 
come in to ride; they have someone that's waiting to sign them up. 
MR. STUPAK.  Ohio tried.  What happened?  Did it work?  
MR. BROAD.  It seems to be working.  Listen, we'll take it any way 
we can get it.  I mean, at this stage if we can get people covered 
for workers' comp--because even with $1 million of insurance 
benefits, if you're in an accident and you're a quadriplegic, for 
example, you can get to $1 million and blow through $1 million of 
healthcare coverage in the first year or so.  And workers' comp 
covers you for the loss of income and so forth and gives you 
lifetime medical care.  So it's far superior.  
MR. STUPAK.  Let me ask you this:  You had the Kentucky Derby, and 
Kentucky doesn't have any kind of workers' comp for the riders.  
What do you have next, Preakness?  Preakness, do they have workers' 
comp there?  And in Belmont.  So the only big one left is the 
Kentucky Derby we have to get.  
I have no further questions, Mr. Chairman.  
MR. WHITFIELD.  Four or five States have workers' comp programs.  
MR. BROAD.  Mandated.  
MR. SAUMELL.  New Jersey, New York, Maryland.  
MR. HAIRE.  California and Ohio.  
MR. BROAD.  And California since 1940.  
MR. WHITFIELD.  Right.  And this is a pretty old sport.  
MR. BROAD.  Yeah.  
MR. WHITFIELD.  There's not a lot of fast action on this.  
Well, listen, thank you all so much.  And we look forward to 
maintaining  contact with you as we move forward.  And if there's 
any additional information you think would be helpful to us, we 
would appreciate your letting us know.  
And I would just ask one other question, Mr. Broad.  Do you have any 
current information on the law enforcement investigation, Federal 
or State or local, as it relates to Mr. Gertmenian?  
MR. BROAD.  I believe that the local police department has deferred 
to the FBI.  The FBI is continuing its investigation.  Beyond that, 
I don't know the state of their investigation or how far they've 
gotten or what more they need.  Every time they ask for information, 
we give it to them; and we have supplied them, for example, with 
computers that we've received so that they can do analysis of the 
computers and that sort of thing; but we don't know whether they're 
close to--
MR. WHITFIELD.  Okay.  
MR. BROAD. --the end or whatever.  
MR. WHITFIELD.  Okay.  Well, thank you all very much.  
MR. STUPAK.  Thank you very much.
MR. WHITFIELD.  This time I'd like to call our second panel, which 
includes Ms. Rose Mary Williams, who is the Director of Racing for the 
 Mountaineer Race Track & Gaming Resort in West Virginia.  
And, Ms. Williams, thank you very much for being here today.  I'm 
sorry that we felt like a subpoena was necessary, but we genuinely 
appreciate your being here.  Now, I know that we wanted you to be 
here probably more than you wanted to come.  So I don't know if you 
have an opening statement that you would like to make or--
MS. WILLIAMS.  No, sir.  I'm just here to answer your questions.  
MR. WHITFIELD.  All right.  Well, then.  As you know, this is an 
Oversight and Investigations hearing, and it is our policy to take 
testimony under oath.  And, of course, under the rules of the House 
and the rules of this committee, you are entitled to be represented 
by legal counsel.  And do you have legal counsel here today?  
MS. WILLIAMS.  Yes, I do, sir.  
MR. WHITFIELD.  And who is that?  
MS. WILLIAMS.  Mr. Stan Brandd.  
MR. WHITFIELD.  Mr. Stan Bran.  Okay.  And he will not be testifying, 
but will be giving you legal advice.  So if you would stand, I would 
like to swear you in at this time.  
[Witness sworn.] 
MR. WHITFIELD.  Thank you very much.  Ms. Williams, first of all, 
we'd like to ask this question.  The earlier panel referred to and 
said that 31 percent of all accidents on racetracks in the country 
occurred at Mountaineer last year.  Is that accurate, or do you have 
any comment on that?  
MS. WILLIAMS.  I do not know that that is accurate.  I will comment 
that Mountaineer runs more races than any track in the country.  We 
run 10 races a day.  We run about 232 days a year.  A lot of tracks 
only run a 30-day meet.  
MR. WHITFIELD.  So you run 10 races a day, 232 days a year.  
MS. WILLIAMS.  Approximately, yes.  
MR. WHITFIELD.  Okay.  Now, what about the comment that the Mountaineer 
track is below the standards of most other racetracks from a safety 
issue?  Do you have a comment about that?  
MS. WILLIAMS.  I don't know where that's coming from.  I know that 
right around 2000, we redid our track down to the base.  We put in
a new limestone base, and we resurface every year.  
MR. WHITFIELD.  How many accidents occurred at Mountaineer track last 
year?  
MS. WILLIAMS.  I don't know that off the top of my head, but I can get 
that information for you.  
MR. WHITFIELD.  But you are the Director of Racing.  
MS. WILLIAMS.  Yes, I am.  
MR. WHITFIELD.  Whose responsibility is it to keep up with those 
numbers?  
MS. WILLIAMS.  That actually goes through our legal department.  
MR. WHITFIELD.  Well, would you provide the committee with the 
number of accidents that occurred on the track last year?  
MS. WILLIAMS.  I sure will. 
MR. WHITFIELD.  Okay.  Now, if a horse goes down, is euthanized on 
the track, is a necropsy performed on the horse?  
MS. WILLIAMS.  Not that I'm aware of.  That falls under the West 
Virginia Racing Commission and the State vet.  
MR. WHITFIELD.  So the track does not have the authority to do a 
necropsy if it decides to do so?  
MS. WILLIAMS.  No, sir.  It goes through the State veterinarian.  
He's in control of that.  
MR. WHITFIELD.  And no necropsy is performed?  
MS. WILLIAMS.  Not that I'm aware of.  
MR. WHITFIELD.  You would be aware of it, though, if it was on your 
track?  
MS. WILLIAMS.  If I was paying the bill, absolutely I would be aware 
of it.  
MR. WHITFIELD.  And you are not paying any bills?  
MS. WILLIAMS.  No, I'm not.  
MR. WHITFIELD.  And what do they do with the carcass of a horse that 
is euthanized on the track?  
MS. WILLIAMS.  It is taken to a landfill, I believe.  
MR. WHITFIELD.  Okay.  Because I think the necropsies should be done 
because you can often tell what caused the accident.  Would you 
agree with that?  
MS. WILLIAMS.  I agree with that.  
MR. WHITFIELD.  Okay.  Now, who negotiates the simulcast contract 
for Mountaineer?  
MS. WILLIAMS.  For the exports?  
MR. WHITFIELD.  Yeah.  
MS. WILLIAMS.  That would be Debbie House.  
MR. WHITFIELD.  Okay.  Now, the horsemen's group under the Interstate 
Horse Racing Act within the State of West Virginia, is that the HBPA 
or is that TODLA or--
MS. WILLIAMS.  That's HBPA.  
MR. WHITFIELD.  HBPA.  And do you know what amount of money they 
receive each year for their administrative fee for approving the 
simulcast contract?  
MS. WILLIAMS.  On the simulcast race, they get half of the agreed-to 
rate.  
MR. WHITFIELD.  And what is the agreed-to rate?  
MS. WILLIAMS.  It can vary.  
MR. WHITFIELD.  Is it around 2 or 3 percent?  
MS. WILLIAMS.  Yeah.  It's as low as 2-1/2 to 3.  
MR. WHITFIELD.  And do you know approximately the dollar figure for 
that each year?  
MS. WILLIAMS.  Not off the top of my head, I do not.  
MR. WHITFIELD.  Would you provide the committee with that exact number?  
MR. WHITFIELD.  Do you have any idea what the number is?  
MS. WILLIAMS.  Just for the simulcast alone?  
MR. WHITFIELD.  Yeah.  
MS. WILLIAMS.  No, I do not.  
MR. WHITFIELD.  Okay.  Well, we would ask you to provide that to the committee.  
MS. WILLIAMS.  I will.  
MR. WHITFIELD.  Now, who owns Mountaineer Race Track?  
MS. WILLIAMS.  It is owned by MTR Gaming.  
MR. WHITFIELD.  MTR Gaming?  And is that a West Virginia corporation or a Delaware or what?  
MS. WILLIAMS.  I think it was incorporated in Delaware.  
MR. WHITFIELD.  Delaware.  
And how many tracks does MTR own?  
MS. WILLIAMS.  We own Scioto Downs, Mountaineer, Jackson Harness-- 
we're 90 percent in Jackson Harness.  We have the license to build 
Presque Isle Downs in Erie, Pennsylvania, and North Metro in 
Minneapolis, Minnesota.  
MR. WHITFIELD.  So a total of how many tracks?  
MS. WILLIAMS.  It will be five when everything's up.  
MR. WHITFIELD.  Five.  And is MTR a publicly traded company? 
MS. WILLIAMS.  Yes, it is. 
MR. WHITFIELD.  And who's the Chairman?  
MS. WILLIAMS.  Ted Arneault. 
MR. WHITFIELD.  Ted Arneault.  Is that A-R-N-O-U--
MS. WILLIAMS.  A-R-N-E-A-U-L-T. 
MR. WHITFIELD.  Okay.  And at this time how much insurance does MTR 
or Mountaineer provide for jockeys that might be injured on the track 
in an accident?  
MS. WILLIAMS.  Currently it's $1 million.  
MR. WHITFIELD.  A million dollars.  And when did that become 
effective?  
MS. WILLIAMS.  I believe it was at the end of 2005.  
MR. WHITFIELD.  Okay.  So any jockey that's--is there any kind of 
deductible for the jockey, or is he covered from first dime spent?  
MS. WILLIAMS.  No, sir.  There's no deductible.  
MR. WHITFIELD.  Okay.  Okay.  And does Mountaineer pay these image 
payments to the Jockeys' Guild that was referred to earlier?  
MS. WILLIAMS.  No, sir.  We do not.  
MR. WHITFIELD.  Do not.  Some tracks evidently pay that, and some do 
not.  How is it determined who pays it and who does not?  
MS. WILLIAMS.  It was done through an agreement with the 
Thoroughbred Racing Association, the TRA, and members of the TRA 
agreed to that, from my understanding.  There was a contract, I 
believe.  
MR. WHITFIELD.  A contract between, or an agreement between the 
tracks and the TRA.  
MS. WILLIAMS.  And TRA.  
MR. WHITFIELD.  And so not every track in the country entered into 
that agreement, I take it.  
MS. WILLIAMS.  Not every track is a member of the TRA.  
MR. WHITFIELD.  Okay.  Are you all a member of the TRA?  
MS. WILLIAMS.  No.  We are a member of the NTRA.  
MR. WHITFIELD.  Oh, you are a member of the NTRA.  That's the National 
Thoroughbred Racing Association?  
MS. WILLIAMS.  Yes, sir. 
MR. WHITFIELD.  And NTRA, what is that?  
MS. WILLIAMS.  National Thoroughbred Racing Association.  The other one 
is the Thoroughbred Racing Association.  
MR. WHITFIELD.  Okay.  So the NRA--National Thoroughbred Racing--I 
mean, National Racing Association is an association of racetracks?  
MS. WILLIAMS.  That's correct.  
MR. WHITFIELD.  And the NTRA is the one that D.G. Van Clief is the 
President of; is that correct?  
MS. WILLIAMS.  Yes.  I think he just resigned, but--
MR. WHITFIELD.  But this payment for images of jockeys is made with, 
through the agreement with the NRA?  
MS. WILLIAMS.  The TRA.  
MR. WHITFIELD.  NTRA.  
MS. WILLIAMS.  The TRA.  
MR. WHITFIELD.  The TRA.  
MS. WILLIAMS.  I think that agreement has lapsed.  I'm not sure on 
that.  
MR. WHITFIELD.  Okay.  But you all don't make that payment and do 
not feel that you're legally obligated to make the payment? 
MS. WILLIAMS.  We have never been a member of TRA, not that I'm 
aware of.  
MR. WHITFIELD.  Okay.  Well, I would ask you to provide the 
committee with the dollar amount paid to the horsemen's group and 
the number of accidents on the track from the year 2000 through 
2005, and the number of horses euthanized on the track.  
MS. WILLIAMS.  Okay.  
MR. WHITFIELD.  Thank you.  
At this time I recognize the gentleman from Michigan Mr. Stupak.  
MR. STUPAK.  Thank you, Mr. Chairman.  
Ms. Williams, how long have you been an employee of MTR?  
MS. WILLIAMS.  Twenty-two years.  I'm sorry, it's been longer than 
that.  It's been about 27. 
MR. STUPAK.  And how long have you been Director of Racing at 
Mountaineer?  
MS. WILLIAMS.  Since 1997.  
MR. STUPAK.  So when the previous panel testified that 31 percent of 
all accidents occurred in 2000--31 percent of all accidents of 
jockeys in 2000 occurred at Mountaineer, you dispute that?  
MS. WILLIAMS.  I don't know that for sure.  
MR. STUPAK.  Okay.  You will check that and get it back to us?  
MS. WILLIAMS.  Yes, I will. 
MR. STUPAK.  Okay.  You have a packet of documents there, the book 
there.  Let me have you go to some selected pages from the 
transcript of the hearing held on November 17.  This would be 
Exhibit Number 1.  There should be two pages there, page 71 and page 
90.  Do you have them?  
MS. WILLIAMS.  Yes, I do.  
MR. STUPAK.  Okay.  Will you read the excerpts on those pages out 
loud, please?  
MS. WILLIAMS.  Mr. Stupak:  "Okay.  Did Mountaineer turn down the 
insurance policy from AIG was my understanding from the testimony 
earlier?  
Ms. Williams:  "No, sir."  
Mr. Stupak:  "Was $100,000 being too expensive?"  
Ms. Williams:  "No, sir.  We have $100,000."  
Mr. Stupak:  "Okay.  Did you turn down the offer--the offer was to 
go to $1 million, and you guys turned that down."  
Ms. Williams:  "We actually went back to our broker and asked for 
them to look at it, and they would not quote us a price on that."  
MR. STUPAK.  "Was that AIG?  
"No, it wasn't."  
MR. STUPAK.  Okay.  And then page 90, if you would, please.  
MS. WILLIAMS.  Mr. Stupak:  "Okay, Ms. Williams.  Just two more 
questions, ma'am.  Do you think Mountaineer should have a 
million-dollar policy for jockeys?  Do you think they should?"  
Ms. Williams:  "As I said before in my testimony, I said we went 
to the broker and asked them about the million dollars, and they 
wouldn't quote us on that."  
"Why wouldn't they quote you on that?"  
Ms. Williams:  "I can't answer that.  I don't know."  
MR. STUPAK.  Okay.  Do you have any reason to believe that these 
are not accurate transcripts of the hearing we had on November 17 
reflecting your answers?  
MS. WILLIAMS.  No.  I believe they're accurate.  
MR. STUPAK.  Okay.  Turn to the document marked as Exhibit Number 5, 
if you would.  And it's a fax memorandum dated February 16, 2005, 
from John Eunick of Johnson and Anton insurance brokerage firms to 
Sandra L. Brokaw, legal assistant for Mountaineer, with a carbon 
copy to you as Director of Racing at Mountaineer Park, is it?  
MS. WILLIAMS.  Yes, it is. 
MR. STUPAK.  Could you please read that e-mail?  
MS. WILLIAMS.  "With regard to your memorandum as to the jockeys 
accidental insurance coverage, please find attached copy of the loss 
runs at Mountaineer Park, Inc.  Kindly provide a quote from 
Mountaineer Park, Inc., at your earliest convenience, and return the 
same to me via fax at (304) 387-8306 or by mail:  Legal Department, 
Mountaineer Park, Inc., P.O. Box 358, Chester, West Virginia 26034." 
MR. STUPAK.  Okay.  Now, please find the fax cover sheet that's in 
Exhibit Number 6, dated 2 days later, February 18, 2005; and it's to 
you, Rose Mary Williams, slash, Sandra Brokaw.  And the memo reads, 
"I usually work with e-mails.  Sorry for the handwriting.  It closes 
your proposal.  Call me at my cell anytime to discuss.  It will be 
the entire weekend."  Is that how that reads?  
MS. WILLIAMS.  Yes, it does.  
MR. STUPAK.  Okay.  And after that, there's a document still in 6, 
because this was attached to the fax sheet, titled, A Proposal of 
On-Track Accident Insurance for Mountaineer Park, Inc., dated 
February 18, 2005, attached to the fax; is that correct?  
MS. WILLIAMS.  That's correct.  
MR. STUPAK.  And before testifying today, I take it you've seen 
that 2000--excuse me--February 18, 2005, proposal?  
MS. WILLIAMS.  I actually saw this when the legal department brought 
it over when they prepared the statement that was sent in to you 
just recently.  
MR. STUPAK.  So is it your testimony you did not see it before 
testifying in November? 
MS. WILLIAMS.  I didn't recall seeing this.  It went to the legal 
department.  I believe there was conversation about it.  
MR. STUPAK.  Why would it go to the legal department if it's 
addressed to you?  
MS. WILLIAMS.  Because that's where it was faxed to, and Sandra 
Brokaw is in the legal department. 
MR. STUPAK.  Okay.  Do you work in the legal department? 
MS. WILLIAMS.  No, I do not. 
MR. STUPAK.  (304) 387-8306, whose fax is that? 
MS. WILLIAMS.  The legal department. 
MR. STUPAK.  And that fax machine is located in the legal department? 
MS. WILLIAMS.  Yes, I believe it is.  
MR. STUPAK.  So Ms. Brokaw then, since she's a legal assistant, 
would she have brought that proposal to you?  
MS. WILLIAMS.  I don't know that for sure. 
MR. STUPAK.  Would Ms. Brokaw know that you had inquired about this 
proposal?  
MS. WILLIAMS.  I don't believe it was me that inquired about it.  I 
believe it was Helen Brancazio from the legal department.  I gave 
her John Eunick's name after we met at a conference.  
MR. STUPAK.  Okay.  So who did you tell then to contact Mr. Eunick 
if you gave him the name?  
MS. WILLIAMS.  Helen Brancazio.  
MR. STUPAK.  Okay.  So you told that to Helen.  Does Sandra work 
for Helen? 
MS. WILLIAMS.  Yes, she does. 
MR. STUPAK.  Is Sandra Brokaw still working for Mountaineer Park? 
MS. WILLIAMS.  Yes, she is. 
MR. STUPAK.  And is her job position still legal assistant? 
MS. WILLIAMS.  Yes, it is. 
MR. STUPAK.  So if Sandra received this, then she would have 
brought it to Helen; is that your position?  
MS. WILLIAMS.  It would have gone to Helen first, yes. 
MR. STUPAK.  Okay.  So after questioning you on November 17, 2005, 
did you ever go back and inquire from Sandra or Helen whether a 
proposal ever came from AIG?  
MS. WILLIAMS.  I did on May the 2nd, I believe it was.  
MR. STUPAK.  So like 1 week ago?  
MS. WILLIAMS.  I'm not sure exactly when it was.  It was when we 
sent in additional information.  
MR. STUPAK.  So did you receive the questions Mr. Whitfield and 
myself wrote to you on your testimony?  
MS. WILLIAMS.  Yes.  
MR. STUPAK.  Those questions, then, make you interested in why we'd 
ask about AIG?  
MS. WILLIAMS.  And I believe that's the time I went back to her.  
MR. STUPAK.  Okay.  When did you receive those questions from us; 
do you know?  
MS. WILLIAMS.  I don't know offhand.  
MR. STUPAK.  Do you have it in front of you there?  You or your 
attorney have those questions?  
MS. WILLIAMS.  They're here, but there's no date on it.  
MR. STUPAK.  Well, it appears that your response to questions 
posed by me arrived on--I sent them to you in November--looks like 
we received them on or about December 20.  So to answer these 
questions from us, you never asked about AIG, you never saw this 
proposal, your first testimony the first time you saw it was 
May 2, like recently?  
MS. WILLIAMS.  I'm sorry.  I misspoke on that.  I was looking at 
this memo that I have, and it's dated that day.  The first time we 
talked about AIG was when--
MR. STUPAK.  Was that the hearing November 17 I asked you 
specifically about AIG?  
MS. WILLIAMS.  You asked me specifically about the broker that we 
were with.  
MR. STUPAK.  Okay.  Go ahead.  
MS. WILLIAMS.  And then --
MR. STUPAK.  Let's go back to page 71, the testimony you read.  I 
asked you about specifically about AIG, page 71.  I think that was 
Exhibit 1.  Remember you read it for us?  
MS. WILLIAMS.  Yes, I did. 
MR. STUPAK.  Didn't Mountaineer turn down the insurance policy from 
AIG--that was my understanding from testimony earlier--and you said 
no.  So how did you know then on November 17--you didn't turn down 
the proposal from AIG, but yet you are telling us you didn't know 
the proposal existed until May 2?  
MS. WILLIAMS.  When you were talking, I thought you were referring 
to AIG as the insurance that was covering everybody.  Our insurance 
was with Mather & Co.  The $100,000 was with Mather & Co., a 
different broker.  
MR. STUPAK.  But you knew who I meant when I mentioned AIG because, 
according to your testimony here today, you actually gave 
Mr. Eunick's name, who works for AIG, right--
MS. WILLIAMS.  That's correct. 
MR. STUPAK. --to your staff.  
MS. WILLIAMS.  I gave it to the legal department. 
MR. STUPAK.  And that was before November 17, 2005?  
MS. WILLIAMS.  I believe it was.  
MR. STUPAK.  Because they solicited a proposal in February of 2005, 
some 9 months earlier. 
MS. WILLIAMS.  Like I said, I met him at a conference.  
MR. STUPAK.  Okay.  So your testimony here today is this proposal 
from AIG you never saw until May of 2006?  
MS. WILLIAMS.  No.  I saw this when Helen prepared the answers to 
send back on the timeline on insurances.  
MR. STUPAK.  So would that have been on the 16th?  Because that's 
when they sent those questions, request for a proposal of increased 
track coverage. 
MS. WILLIAMS.  Yes.  It's whenever they responded to those questions. 
MR. STUPAK.  And then Mr. Eunick here responded, according to 
documents before us here, 2 days later, right?  
MS. WILLIAMS.  I saw the AIG proposal when Helen Brancazio submitted 
the information to this committee.  
MR. STUPAK.  When they submitted to this committee.  
Okay.  Let's go back to Exhibit Number 5, February 16, 2005, from 
the Mountaineer Race Track.  This is John Eunick.  Okay.  It's from 
Sandra Brokaw.  Did you ever see this?  
MS. WILLIAMS.  Not that I'm aware of.  Not that I can remember.  
MR. STUPAK.  Okay.  Lost run history.  Where would Sandra Brokaw 
get that?  
MS. WILLIAMS.  From Mather & Co.  
MR. STUPAK.  Mather & Co., that's your insurance company, right?  
MS. WILLIAMS.  That's our broker.  
MR. STUPAK.  Okay.  That's your broker.  All right.  
So for over a year, probably about 15 months, there's a proposal, 
and you don't know anything about it, even though you're copied 
that we're submitting a proposal for AIG in February 16, 2005?  
MS. WILLIAMS.  Like I said again, I'm not sure that I saw this 
proposal.  If I did, I don't remember it.  And it wasn't for over 
a year.  We started negotiating again with AIG at the end of the 
year. 
MR. STUPAK.  The end of what, 2005?  
MS. WILLIAMS.  Yes. 
MR. STUPAK.  Well, when would your policy with Mather have expired?  
MS. WILLIAMS.  It would have expired at the beginning or the end of 
2004. 
MR. STUPAK.  2004?  
MS. WILLIAMS.  Yes. 
MR. STUPAK.  When did Gary Birzer get hurt?  
MS. WILLIAMS.  He got hurt in July of 2004. 
MR. STUPAK.  And there was no policy in effect then?  
MS. WILLIAMS.  Yes, sir.  There was. 
MR. STUPAK.  There was?  Was that with Mather?  
MS. WILLIAMS.  That was with Mather. 
MR. STUPAK.  Okay.  And Gary got hurt in June; is that correct?  
MS. WILLIAMS.  That's correct.  July. 
MR. STUPAK.  Hurt in July 2004, and Mather's insurance ran until when?  
MS. WILLIAMS.  I'm not sure on that.  I would expect it would have 
expired at the end of 2004, the beginning of 2005.  Director of 
Racing, isn't part of your responsibility to see that the insurance 
is there?  
MS. WILLIAMS.  No.  That is handled through our legal department. 
MR. STUPAK.  So what would you have to do with insurance then?  
MS. WILLIAMS.  What do--I'm not sure what you're asking. 
MR. STUPAK.  You're the Director of Racing, right?  
MS. WILLIAMS.  Yes, I am. 
MR. STUPAK.  You oversee it, the racing activities, correct?  
MS. WILLIAMS.  I oversee the racing activities, yes.  
MR. STUPAK.  And that would include providing benefits for the riders?  
MS. WILLIAMS.  No, sir.  It does not.  
MR. STUPAK.  It does not?  Do you have a job description?  
MS. WILLIAMS.  Yes, I do.  
MR. STUPAK.  Okay.  Can you provide that to the committee?  
MS. WILLIAMS.  Yes, I can. 
MR. STUPAK.  Okay.  If you have nothing to do with insurance, why 
would you be carbon copied on February 16, 2005?  Why would 
Mr. Eunick, who you've met at a conference, make the fax cover 
directly to you with a slash to Sandra Brokaw?  Why would these 
other people assume you had something to do with insurance, 
including your own legal assistant Sandra Brokaw?  
MS. WILLIAMS.  I don't think Sandra did.  I think Mr. Eunick did--
MR. STUPAK.  We know February 16, 2005, from John Eunick to Sandra, 
and she carbon copies you.  Why would she think you needed to see 
this if you had nothing to do with it?  
MS. WILLIAMS.  It sounds like it's in regard to a memo that was sent 
from Keith Camberland on the jockey accidental insurance coverage 
to me.  
MR. STUPAK.  Exhibit Number 5, you're saying it's from who?  
MS. WILLIAMS.  It says, "with regard to your memorandum to 
Keith Camberland on the jockey accidental insurance coverage, 
please find the attached copy of the loss run Mountaineer Park, 
Inc."  
MR. STUPAK.  Okay.  Carbon copied to who?  
MS. WILLIAMS.  It's carbon copied to me.  
MR. STUPAK.  Okay.  Why would you receive it if you have nothing to 
do with insurance?  
MS. WILLIAMS.  I imagine because Sandra thought that it was because 
of the loss run.  
MR. STUPAK.  Okay. 
MS. WILLIAMS.  They do copy me in on the policies and things like 
that after they're--
MR. STUPAK.  Right.  So you've said.  How about a Tamara Cronin, 
C-R-O-N-I-N.  Cronin, am I saying that right?  
MS. WILLIAMS.  Yes, you are. 
MR. STUPAK.  Who is she?  
MS. WILLIAMS.  She is our PR director.  
MR. STUPAK.  Let me show you, if I may--do we have another copy?  
If not, we'll have this gentleman bring this down to you.  Because 
you even talk about--let me read your quote.  You're quoted.  
Tamara's head of Director of Public Relations, and you're being 
quoted right here.  
"We recognize that jockeys are involved in a perilous sport, and 
that injuries are a possibility each time they ride."  In fact, the 
gentleman right there is giving it to you.  Stated December 20.  
This is a news release from Mountaineer.  
"We recognize that jockeys are involved in a perilous sport, and 
that injuries are a possibility each time they ride," said Rose 
Mary Williams, the Mountaineer Director of Racing.  "We are 
concerned about the current lack of coverage provide by the Jockeys' 
Guild and want to make every effort to ensure that the jockeys and 
their families have disability protection in the event of 
catastrophic injury."  
So it sounds like you know a little bit more about insurance than 
what you're telling this committee, or subcommittee.  
MS. WILLIAMS.  Well, after Gary's accident, who wouldn't be 
concerned?  I mean, we are concerned about--
MR. STUPAK.  Exactly.  
MS. WILLIAMS. --catastrophic accidents. 
MR. STUPAK.  And 7 months later a fax comes to you, addressed to you 
as a prime person with a 15 page proposal.  And if you're so 
concerned after Gary's accident, you never paid any attention to 
it, you're telling this committee?  
MS. WILLIAMS.  I'm not saying that. 
MR. STUPAK.  Okay.  What are you saying then?  
MS. WILLIAMS.  I'm saying that I'm not sure that I saw this proposal. 
 I know that when I talked to Helen, she said that she was working 
on that proposal; she was talking to John Eunick.  John Eunick told 
her that there was an agreement being talked about with the NTRA 
over the insurance.  
MR. STUPAK.  Right.  But you're concerned about your riders; 
therefore, you want to make sure they're covered.  How about before 
you came to testify on November 17, 2005.  Did you talk to Sandra 
about insurance coverage for riders?  
MS. WILLIAMS.  I've talked to Helen about it.  
MR. STUPAK.  Okay.  Not Sandra, just Helen?  
MS. WILLIAMS.  Yes.  
MR. STUPAK.  You knew November 17 insurance would be something we 
would ask about?  Did you not anticipate those questions from this 
subcommittee?  
MS. WILLIAMS.  Yes, I did.  
MR. STUPAK.  So you never made any inquiry to see if you had any 
insurance then on November 17?  
MS. WILLIAMS.  The inquiries I made were about our current--at that 
time was our current coverage with the broker, Mather & Co., and the 
$100,000 and why they would not increase that coverage, because 
Helen had gone to them and asked them for an increase.  
MR. STUPAK.  Okay.  Does Helen report to you, or does she--
MS. WILLIAMS.  No.  She's our in-house counsel.  
MR. STUPAK.  Well, if you didn't know about this proposal, why did 
you testify then when I asked you specifically about AIG, and I 
asked if it was too expensive, you said, "no, sir, we have 
100,000."  And I said, "but did you--the offer was to go to a 
million, and you turned it down."  And you said, "we actually went 
back to our broker and asked for them to look at that, and they 
would not quote us on that."  And I said, "was that AIG"; and you 
said, "no, it wasn't."  So who's your broker then when you 
testified on November 17 then?  
MS. WILLIAMS.  Mather & Co. 
MR. STUPAK.  So did Mather provide insurance through 2005 for 
Mountaineer?  
MS. WILLIAMS.  Yes, they did. 
MR. STUPAK.  In the form of $1 million?  
MS. WILLIAMS.  No, $100,000. 
MR. STUPAK.  Just that $100,000.  Okay.  And Mather would not quote 
you on more than $100,000?  
MS. WILLIAMS.  That's my understanding.  That's what Helen 
Brancazio's told me.  
MR. STUPAK.  And you had no idea anyone's inquired about any other 
insurance company, even when I asked you about AIG?  
MS. WILLIAMS.  I don't know for certain that I have any knowledge of 
receiving that letter.  I know that I went to AIG--John Eunick when 
we were at a conference, and we talked about insurance.  I asked him 
to get ahold of us on providing coverage.  
MR. STUPAK.  And that was in February, obviously, when you contacted 
on both coverage, someone did, on behalf of Mountaineer?  
MS. WILLIAMS.  I don't know the exact date.  All I know, I was at a 
conference when we spoke. 
MR. STUPAK.  Sure.  Well, then, why were you so sure then on page 
71 when I asked if it was AIG, and you said, no, it wasn't?  
MS. WILLIAMS.  Because our broker is Mather & Co.  
MR. STUPAK.  Okay.  Okay.  All right.  So who is the individual or 
entity at Mountaineer that makes decisions on insurance?  
MS. WILLIAMS.  Helen Brancazio.  
MR. STUPAK.  And you said you're not her supervisor, or she doesn't 
report to you?  
MS. WILLIAMS.  No, sir.  She does not. 
MR. STUPAK.  Would she consult with you on insurance issues? 
MS. WILLIAMS.  We may have talked on occasion. 
MR. STUPAK.  Well, how about after Gary Birzer's accident, did you 
talk to her then? 
MS. WILLIAMS.  Yes.  We talked about the coverage that was available 
to Mr. Birzer.  
MR. STUPAK.  So it's your testimony here today, the only insurance 
you knew you had on November 17 was $100,000, and that was from 
Mather?  
MS. WILLIAMS.  The only insurance coverage that Mountaineer had on 
jockeys on November 17 was from Mather & Co. 
MR. STUPAK.  And you had no knowledge of any quotes or requests from 
any insurance other than Mather about any coverage for $1 million or 
more?  
MS. WILLIAMS.  Not that I can remember.  
MR. STUPAK.  So you may have, but you just can't remember it today?  
MS. WILLIAMS.  I don't remember that. 
MR. STUPAK.  Would you have taken notes while you were discussing these matters with Helen or Sandra?  
MS. WILLIAMS.  Not necessarily. 
MR. STUPAK.  Okay.  I have no further questions, Mr. Chairman. 
MR. WHITFIELD.  Ms. Williams, if the jockeys or representative from 
the jockeys came to you with an issue relating to safety on the 
track, what would be the general procedure that you as Director of 
Racing would take at that point?  
MS. WILLIAMS.  We have a committee formed that meets every--I 
believe they switched it to Saturdays now.  They meet in the 
jockeys' room.  It's the track superintendent, the HBPA president, 
and it's two of the representatives from the jockeys' colony.  And 
they meet, and there's documentation of those meetings.  
MR. WHITFIELD.  And you would discuss at that time any issue that 
the jockeys may have raised regarding a safety issue?  
MS. WILLIAMS.  That's correct.  They meet, and they discuss that.  
And then if there's any problems, or if they want the track watered 
more, they relay that to the track superintendent, and it's followed 
through. 
MR. WHITFIELD.  And do you attend those meetings?  
MS. WILLIAMS.  No, I do not. 
MR. WHITFIELD.  And do you get a report of those minutes?  
MS. WILLIAMS.  I get a copy of the minutes.  
MR. WHITFIELD.  Do you normally read them?  
MS. WILLIAMS.  Yes, I do.  
MR. WHITFIELD.  What are some of the issues that have been raised, 
say, in the last 5 or 6 months. 
MS. WILLIAMS.  Some of them have been the water issue, jockeys 
wanting more water when horsemen don't.  There's been an issue, 
they feel there's an uneven spot in the track.  They bring that 
to our attention.  A lot of the times we--some of the jockey 
colony doesn't even show up for the meeting, or the HBPA 
representative doesn't show up for the meeting, and that's 
documented, too. 
MR. WHITFIELD.  Okay.  What about security at the track from the 
perspective of--I'm assuming that in West Virginia certain drugs 
are allowed to be administered to horses at particular times, and 
others are disallowed.  
What steps does the track take to ensure that those State 
regulations are adhered to?  
MS. WILLIAMS.  We don't.  That falls under the West Virginia 
Racing Commission, and they have an inspector on site.  They have 
three stewards and a State veterinarian.  
MR. WHITFIELD.  So the racetrack does not have any legal obligation 
to do anything to make sure that drugs administered to horses comply 
with State law?  
MS. WILLIAMS.  No.  That falls under the Racing Commission's 
umbrella.  
MR. WHITFIELD.  Okay.  Now, I just want to ask you once again, you 
will provide us with a list, a number of all accidents, the year 
2001 through 2005?  
MS. WILLIAMS.  Yes, sir.  
MR. WHITFIELD.  2000, 2005.  And we want to know the amount of the 
annual payment to the HBPA, pursuant to the simulcasting agreement, 
over the last 3 years.  
MS. WILLIAMS.  And do you just want that for export or export and 
import both?  
MR. WHITFIELD.  I want them both.  I want the total paid, export and 
import.  
MS. WILLIAMS.  And live?  
MR. WHITFIELD.  And live.  
MS. WILLIAMS.  Okay.  
MR. WHITFIELD.  And broken down.  
MS. WILLIAMS.  We can do that. 
MR. WHITFIELD.  Right.  And then one other question.  Mr. Stupak was 
asking about how Helen--and I forgot how you pronounce her last name.  
MS. WILLIAMS.  Brancazio.  
MR. WHITFIELD.  What is her title?  
MS. WILLIAMS.  She's in-house legal counsel for Mountaineer.  
MR. WHITFIELD.  She is the in-house-- 
MS. WILLIAMS.  Yes, sir. 
MR. WHITFIELD.  After Gary Birzer's accident, I'm assuming that 
someone with authority at the track met and decided to raise the 
policy from $100,00 to a million?  Didn't a million-dollar policy 
go into effect in December of 2005?  
MS. WILLIAMS.  Yes, it did. 
MR. WHITFIELD.  Okay.  And what is the annual premium on that?  
MS. WILLIAMS.  It's over a half million dollars.  
MR. WHITFIELD.  Half million.  Okay.  But you have more races than 
any other track in the country?  
MS. WILLIAMS.  Yes, we do.  I would say more than most tracks.  I 
don't know that there's anybody else that has more.  
MR. WHITFIELD.  Okay.  Okay.  All right.  
Do you have any anything else?  Okay.  
MR. STUPAK.  Ms. Williams, were you aware that the Jockeys' Guild 
had no such supplemental insurance policy in place at the time Gary 
Birzer was injured?  
MS. WILLIAMS.  I don't think any of us were aware.  
MR. STUPAK.  I'm asking you though.  You were?  
MS. WILLIAMS.  No, I wasn't. 
MR. STUPAK.  Your answer is no then?  Okay.  
Is it true that Mountaineer never paid any money from Mountaineer's 
revenues to the Guild as other tracks had for insurance policies?  
MS. WILLIAMS.  I'm not sure. 
MR. STUPAK.  Mountaineer never paid anything to the Guild, Jockeys' 
Guild?  
MS. WILLIAMS.  Not for insurance--I don't think anybody pays anything 
for insurance policies.  
MR. STUPAK.  Or how about media rents?  
MS. WILLIAMS.  No, sir.  
MR. STUPAK.  Okay.  Has Mountaineer contributed any money to Gary 
Birzer as a result of his 2004 accident?  
MS. WILLIAMS.  We provided the $100,000 in insurance, and we've 
done some fundraisers with jockeys and horsemen, and then we also 
built ramps at his house in West Virginia.  
MR. STUPAK.  Do you know what the total value of those payments or 
services has been to Gary Birzer?  
MS. WILLIAMS.  No, because I didn't see all the amounts going in. 
 Like I said, we helped with some of the jockeys, raised some of 
the money, and the HBPA provided giveaway things and stuff like 
that.  
MR. STUPAK.  Who would be your immediate supervisor or boss?  
MS. WILLIAMS.  Ted Arneault.  Edson Arneault. 
MR. STUPAK.  That's the Chairman of the Board?  
MS. WILLIAMS.  Yes. 
MR. STUPAK.  Did you ever discuss the AIG proposal with him?  
MS. WILLIAMS.  It was in, I believe, November of 2005 or early 
December.  Right before we did sign up for the million-dollar 
coverage.  
MR. STUPAK.  Why would you be discussing it with him if you didn't 
have anything to do with insurance?  
MS. WILLIAMS.  It was brought to me through Helen, and I went to Ted 
with it.  
MR. STUPAK.  Okay.  So if that was November of 2005 or early 
December, when did Helen come to you with this AIG proposal?  
MS. WILLIAMS.  It was around the same time.  
MR. STUPAK.  Before or after our hearing? 
MS. WILLIAMS.  After. 
MR. STUPAK.  Could you provide us the date of that meeting?  
MS. WILLIAMS.  Sure.  
MR. STUPAK.  Do you have a schedule you keep every day? 
MS. WILLIAMS.  Yes.  A lot of the appointments.  
MR. STUPAK.  How about with Helen?  
MS. WILLIAMS.  No. 
MR. STUPAK.  You're a pretty small operation.  
MS. WILLIAMS.  We're all in the same area.  
MR. STUPAK.  Right.  How many fax machines do you have there?  
MS. WILLIAMS.  I can't tell you offhand.  There's quite a few.  
MR. STUPAK.  You have a small area but quite a few fax machines?  
MS. WILLIAMS.  Yes.  Every office has a fax machine. 
MR. STUPAK.  What is your fax number? 
MS. WILLIAMS.  304-387-8303.  
MR. STUPAK.  Okay.  
Thank you, Mr. Chairman.  
MR. WHITFIELD.  I just have a few more questions.  Then we will 
conclude for the day.  
I want to make sure that we are talking about the same thing on 
this Interstate Horse Racing Act.  Under the Interstate Horse Racing 
Act as a condition precedent to an agreement being finalized for 
simulcasting the horsemen's group, you would have to reach an 
agreement with the horsemen's group on that contract.  
As you know, we are considering some legislation, and we are looking 
at the Interstate Horse Racing Act.  How often do you actually pay 
the HBPA pursuant to the fee that they have for approving the 
contract?  Are they paid monthly or yearly?  
MS. WILLIAMS.  Weekly.  
MR. WHITFIELD.  They are paid weekly.  
MS. WILLIAMS.  The money actually goes into the purse account.  
MR. WHITFIELD.  Into the purse account.  Then they withdraw it 
from the purse account?  
MS. WILLIAMS.  I think they get 2 percent; 1.5 percent goes to their 
trust, and I believe some administration costs, and then the half 
percent stays with the HBPA.  But they do have a trust fund for 
horsemen on the back side.  
MR. WHITFIELD.  Now, in Kentucky, that money for the horsemen on the 
back side comes through in-cash tickets.  What happens to in-cash 
tickets in West Virginia?  
MS. WILLIAMS.  They actually go to the Racing Commission, and 
they're used for capital improvements at each facility.  
MR. WHITFIELD.  Okay.  When you provide us that information on the 
amount of money that actually goes to the HBPA outside of the 
purses, their fee as a condition precedent, would you also just 
give us a detailed paragraph of exactly the way it works and how 
the amount that you pay to them weekly is calculated?  
MS. WILLIAMS.  Yes.  
MR. WHITFIELD.  Okay.  Okay.  With that, thank you, Ms. Williams 
for your testimony.  And with that, the hearing is concluded.  The 
record will stay open for 30 days, and the documents, without 
objection, will be entered into the record.  The record will stay 
open for any follow-up questions, and we would, if we have those, 
we'll be getting those to you as well.  
[The information follows;] 



MS. WILLIAMS.  Thank you.  
MR. WHITFIELD.  Thank you very much. 
[Whereupon, at 4:02 p.m., the subcommittee was adjourned.]