Hearings: Looking Back to Look Ahead

- I consider today's Thursday's congressional hearings to be a nuisance and little more than some posturing politicians killing time wagging fingers while they await their re-election efforts this fall (and perhaps pick up some autographs as well). If you missed it, be sure to check out Matt Hegarty's superb overview and critique in the Form. The industry participants certainly need to at least appear earnest, regretful of past sins, nodding approvingly at the Representatives' suggestions, but expressing confidence about the steps already taken. But in terms of the feds actually getting involved, I think the industry has little to fear.

It may be instructive to take a look back to another House Subcommittee hearing, one which occurred over 2 1/2 years ago, in order to get an idea of what will - and will not - grow out of this one. At that time, in October, 2005, Rep. Ed Whitfield, who has called Thursday's hearing as the ranking minority member of the Subcommittee on Commerce, Trade, and Consumer Protection, was the chairman of the Subcommittee on Oversight and Investigation. As opposed to this one, that panel was actually investigating something worth investigating - the circumstances under which jockey Gary Birzer was left with no catastrophic insurance coverage after being left paralyzed from a spill, and the suspected improprieties in the financial management of the Jockeys Guild by its then-president Wayne Gertmenian, including and especially his allowing the insurance policy to elapse. I wrote about the starkly emotional proceedings at the time.

In short, the subcommittee heard jockey after jockey testify angrily as to how Gertmenian betrayed the membership, lining his pockets and those of his family and friends through his phony consulting company Matrix Capital. They expressed shock at the callous manner in which he allowed the policy to expire without informing the riders. They pressed him on the questionable assertions on his resume. "We think it's a complete fabrication," Representative Joe Barton told Gertmenian, calling him an "absolute disgrace;" as reported on Bloodhorse.com by Ray Paulick (before he started morphing into Drudge).

Tennessee Republican Rep. Marsha Blackburn was stunned by the inconsistencies. "This is starting to sound like a Dr. Seuss novel," she said. "Events that never happened in a town that doesn't exist."

"This thing is really a hornet's nest and it's starting to unravel," said Michigan Democratic Rep. Bart Stupak.

Rep. Whitfield said that Gertmenian "has a tendency to exaggerate -- to embellish." And, a month later when Gertmenian was removed (prompting him to write himself checks on the way out), Whitfield said "we're still looking at" possibly pursuing perjury or other charges against Gertmenian.

But what has happened since? Absolutely nothing. All of that bluster turned out to be just that. Not only was Gertmenian not charged, but he still maintains his post at Pepperdine (though the resume appears to finally have been removed). A federal lawsuit against him filed by the Jockeys Guild was thrown out, and the last we heard, he had pending legal action against the Guild. Gertmenian incredibly became the head of the creditors committee in the Guilds' bankruptcy case, before a U.S. trustee with a brain finally booted him off, incredulous I'm sure that the man who contributed so greatly to the Guild's plight through his greed and sleaze would be in that position. I still can't get over that, nor the silence from the media that accompanied it.

Another thing that did not come to fruition was the subcommittee members' threats for Congress to mandate adequate catastrophic insurance policies for jockeys through legislation. Rep. Whitfield did actually twice introduce measures to amend the Interstate Horseracing Act to require the industry to do just that (and, by the way, to ban horses treated with anabolic steroids from racing). But the House had little appetite to get involved. Many tracks, even before the 2005 hearing, had already taken out policies, usually for coverage up to $1 million; and others, including Mountaineer, the track at which Birzer was hurt, soon followed suit. (Subsequent efforts to bring coverage further up to speed in light of soaring medical costs have not been successful.)

So, while I wouldn't take any specific threats that we might hear on Thursday too seriously, the industry will at least need to keep on its toes, follow through with the current efforts which seem nearly certain to ban the routine use of steroids, and continue to work towards safer racing surfaces. I really don't believe we'll see the United States Congress take time out of its far more pressing issues to pass any laws regarding these matters anytime soon. But it should sure be fun to hear what Dutrow has to say.