Members of Congress grilled former and present Jockeys Guild officials for more than seven hours yesterday over how and why catastrophic insurance for jockeys was allowed to lapse.
Rep. Ed Whitfield, R-Hopkinsville, whose district includes three racetracks, opened the hearing with emotional testimony from disabled jockey Gary Birzer, paralyzed last summer at Mountaineer Park in West Virginia.
"On July 20, 2004, my life changed forever," Birzer said, ashis wife, Amy, came close to tears. The Birzers had paid $64,000 in dues to the guild. "I don't remember exactly when I found out that the guild wasn't going to help me. Not once ... was anything said about the catastrophic insurance being canceled. ...I have been completely let down."
Weeping as she testified, Amy Birzer said guild vice president Albert Fiss had promised to help, then told her that, to pressure racetracks to cover jockeys, "we're going to use your husband as a guinea pig."
The Birzers owe more than $500,000 in medical bills. They credit the charity of fellow jockeys with getting them through the last difficult year and a half.
Whitfield, who chairs the House subcommittee on oversight and investigations, has been investigating inadequate insurance coverage for jockeys and racetrack workers.
"Racing has $25 billion in economic impact, hundreds of thousands of jobs, generates $16 billion in handle, but still does not provide adequate on-track insurance for its most important people," Whitfield said.
Giovanni had canceled regular health insurance for jockeys in March 2002 because of budget concerns, but as a stopgap measure he secured a one-year catastrophic injury plan providing $1 million in coverage for on-track injuries.
"We have witness after witness that's testified to the staff and answered questions today that they thought they were still being covered," Barton said, "until we had an injury in which it was proven they weren't being covered.
Gertmenian said, "We have no money to pay for it." He said that, with guild finances allegedly in dire straits, members said they preferred to have family health insurance if the guild could afford only one type of coverage.
Yesterday's hearing delved into the guild's murky finances and the rancor surrounding Gertmenian, the current guild president and chief executive officer.
The House panel asked why the guild board voted to pay $335,000 to Gertmenian's company, Matrix Capital Associates. He is CEO and sole employee of Matrix.
He also testified that half of the fee went to general spending and the other half went to consulting, including more than $50,000 to his daughter and her firm, Scoop Inc. Gertmenian also earns a $165,000 salary from the guild and has combined Matrix's office space with that of the guild, which rents the property from Matrix.
Also at issue is the now-depleted Disabled Jockeys Fund, which was set up by Giovannni, the former guild director, to care for permanently disabled jockeys, such as Birzer. The fund contained more than $1.3 million in 2001.
Former guild treasurer Eddie King, also a jockey, testified that in 2002 Gertmenian asked him to remove $1 million from the disabled fund to create the impression that the guild was facing bankruptcy and needed donations.
Flanked by lawyers, Gertmenian and Fiss, the guild's vice president, had trouble explaining Matrix's relationship with the guild. Gertmenian refused to talk to the press after the hearing.
"It sure looks to me like you got in control of the guild, got all your cronies on the board, you did everything you can to keep the guild members in the dark about the lack of an insurance policy about on-track injuries until it was obvious you had to say something. ... If I were a dues-paying member of the guild, I'd want new management," Barton said.
"At a minimum, we want to see some on-track catastrophic insurance in place as soon as possible for on-track injuries," Barton said, "and then we want to go from there to start cleaning up this."
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