Joint stake in horse by state regulator and Santa Anita executive raises questions
The buzz started Friday when Del Mar racing secretary David Jerkens posted the Wednesday overnight list, a look at what horses are entered in races for that day.
The No. 2 horse in the seventh and final race was named Fravel, a 3-year-old colt for trainer Richard Mandella and ridden by Flavien Prat. The ownership: “M. Auerbach LLC, Timothy Ritvo or Stacie L. Clark.”
The fact that state regulator Madeline Auerbach and Ritvo, who runs Santa Anita, were business partners in the ownership of a horse is seemingly the most basic of conflicts of interest.
Auerbach is vice chair of the California Horse Racing Board (CHRB), the agency that regulates racetracks in the state, and this year likely will be chairman.
Ritvo is the chief operating officer of The Stronach Group (TSG), which owns Santa Anita, which is regulated by the CHRB.
And the apparent conflicts of interest didn’t end there.
Clark is the wife of Mike Rogers, the president of TSG’s racing division and a member of the Breeders’ Cup board.
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Oh, and the horse is named after Craig Fravel, a former executive at Del Mar and chief executive of the Breeders’ Cup, which often deals with the CHRB to smooth state regulatory issues as it pertains to the event that will be held at Santa Anita Nov. 1-2.
“Obviously, it’s an apparent conflict of interest, and anyone hearing that would be concerned,” said Shawn Klein, who teaches sports ethics at Arizona State.
Attorneys for the CHRB don’t seem concerned about a conflict of interest or believe that Auerbach should recuse herself.
“Commissioner Auerbach would not have to recuse herself from matters involving Santa Anita because she does not have an interest in the racetrack,” CHRB spokesman Mike Marten said. “Ownership of a horse and any purses winnings do not create a financial conflict of interest with the track.”
Auerbach, reached last week before the ownership became well known, didn’t see a problem with the arrangement.
“I don’t think it makes much difference, in my opinion,” Auerbach said. “If I thought it was a problem, I would give Tim his money back. We all have conflicts of interests. If I thought it was a problem with my ability to be even-handed, we would have to do something to get him out of the partnership.”
Ritvo took care of that. On Sunday, he presented Del Mar with a bill of sale showing that he had sold his interest back to Auerbach, according to Josh Rubinstein, chief operating officer of Del Mar.
Ritvo did not return a message for comment. However, TSG made it clear it sees the appearance of conflict as an issue.
“The Stronach Group expects that all its employees will avoid situations where there can even be a perception of a conflict of interest,” TSG said in a statement. “When the issue around this horse was raised, the individual immediately divested himself of any interest in that horse.
“TSG is taking steps to stress with all its employees its strict conflict of interest requirements and the necessity of always bearing them in mind and seeking clarification where they are unsure as to any potential situation.”
Ritvo’s name was removed from the Equibase list of owners by Monday and his name was taken out of the program.
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Auerbach would not say how much Ritvo and Clark paid to buy into the horse.
“Together they couldn’t have had more than a quarter of the horse,” Auerbach said. “We were sitting around a table and I liked this horse and Mike [Rogers] was buying into him. And Tim said, ‘I want in, too,’ so he joined.”
The colt was bred by Auerbach and listed at the Barretts yearling sale in October 2017 but not sold. The high bid was $47,000.
“I think there is an obligation to be transparent, to avoid any hint of corruption or conflict of interest that raises concerns about dishonesty,” Klein said. “It’s a general commitment most businesses should have and the gambling industry should have a deeper commitment.”
There are several items involving Santa Anita and the board. Besides granting a license for the fall meeting, Auerbach will vote on a proposed racing schedule that gives two of the three Los Alamitos thoroughbred meetings to Santa Anita, according to those familiar with the plan but not authorized to comment. Los Alamitos would retain the L.A. Fair meeting, which would be run Dec. 3-20.
The appearance of conflict of interest is nothing new to the CHRB. A former commissioner, George Krikorian, owned horses with Los Alamitos owner Ed Allred.
Perhaps most puzzling was when Gov. Jerry Brown appointed jockey Alex Solis to the board in 2015. The conflict is that as an active rider, the stewards, who work for the CHRB, would have to make rulings against one of their bosses.
During the time Solis continued to ride, seven infractions were levied against him. The details of the penalties were not immediately available.
It’s a fine line that specialized regulatory bodies must walk in finding people knowledgeable about the business yet without conflicts.
“It’s quite inherent in regulatory boards,” Klein said. “They require expertise in the business you are regulating. And, typically those experts would have relationships that could cause some back and forth. The opposite problem would be to have people who don’t have any connections within the industry who would also have the expertise.”
To name a horse after a living person, the person must sign a form with the Jockey Club, which registers and manages all names. Fravel did that but has no ownership stake in the horse.
The fact that the colt is making his first start in August of his 3-year-old season means he has had some bumps along the way. He’s listed as 6-1 on the morning line, the fifth favorite in the nine-horse race for maiden California-breds.
When he returns to the Mandella barn after the race, it’s possible he’ll be greeted by board member Solis. He’s an assistant trainer for Mandella.
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