Horse race officials allegedly bet on job

2/7/2004

COLUMBUS - The executive director and some employees of the agency charged with overseeing Ohio s racing industry bet on the horses while on the job, according to the findings of a state investigation released yesterday.

The Ohio inspector general raised a red flag about wagering by at least one member of the Ohio Racing Commission, Chairman C. Luther Heckman. It also asked the Ohio Ethics Commission to look into whether commissioners violated state law by failing to disclose free meals, alcoholic beverages, golf outings, and other gratuities received from the tracks they regulate.

The commission s executive director of 17 years, Clifford A. Nelson, quietly retired last week after Gov. Bob Taft asked the commission for a change in leadership. The governor appoints all five commissioners.

“We became aware of the investigation as a result of a conversation with commission members,” Taft spokesman Orest Holubec said. “We discussed a change in management, and the executive director has retired. ... The governor has no tolerance for violations of [ethics] policy.”

The governor has no immediate plans to replace any commissioners pending conclusion of the ethics investigation.

Mr. Nelson admitted to investigators that he wagered between $2,000 and $10,000 in 2003, but the report said time reports and bank records suggest “his time spent at racetracks and gambling was indeed substantial.” He was being paid $92,185 a year at the time of his retirement.

Inspector General Tom Charles did not make a referral for possible criminal investigation because he found the commission s changing policies on personal gambling to be too vague.

Mr. Heckman of Dublin said the commission was reviewing the report. He said employees are prohibited from betting on live races on work time without special permission. Policy also prohibits track inspectors from betting on Ohio races, something else the inspector general said was happening.

The commission s policy does not prohibit gambling by employees on their own time and allows inspectors to gamble on out-of-state races.

In addition to Mr. Nelson, the report cites other, unidentified employees as betting on work time. Mr. Heckman said the commission isn t specifically aware of who the others are.

He confirmed he bets on races and said he believes all of the commissioners have done so. The current part-time board also includes Norman J. Barron of Cincinnati, Scott Borgemenke of Dublin, Rainy G. Stitzlein of Akron, and John Meeks of Canton.

Commissioners earn about $34 an hour when on state business. Commission policy does not prohibit them from betting on their own time.

“I don t think there has been anything harmful about commissioners wagering,” Mr. Heckman said. “In fact, I think there have been some beneficial things. I doubt that very many people understand paramutuel wagering - the odds, the pools, the type of bets - unless they engage in it.”

All but Mr. Borgemenke, appointed last year, were specifically listed by name as recipients of gratuities from the tracks. That list noted Toledo s Raceway Park provided a commission meeting lunch valued at $120 for 24 people in 2002.

Gambling opponents pointed to the report as evidence the state should not be in the gaming business.

“Gambling breeds corruption,” said the Rev. John Edgar, spokesman for the anti-gambling task force of the United Methodist Church in Ohio. “Now we re seeing clear indication of corruption in the horse-racing part of gambling. To allow horse tracks to become casinos [with electronic slot machines] just amplifies the likelihood of greater corruption in the future.”

The inspector general also:

• Noted the commission distributes about 20,000 track guest passes a year valued at $75 each without tracking them.

• Turned over to the state auditor and attorney general instances where investigators and inspectors who live within 25 miles of their assigned tracks improperly received total mileage reimbursement nearing $60,000 for what was essentially driving to work.

• Questioned the granting without competitive bid of a $1.4 million contract for drug testing on horses to an Ohio State University laboratory.