CHRB UNCONFIDENTIAL
December was a cruel month for Richard Shapiro, who stepped down as chairman of the California Horse Racing Board on Dec. 15, only a few days after learning that a significant portion of his life savings and pension was lost in the $50-billion Ponzi scheme allegedly perpetrated by Bernard Madoff.
January wasn’t much better.
Shapiro on Jan. 12 sent a letter asking for help from his Congressman, Brad Sherman, a Democrat representing the San Fernando Valley near Los Angeles. He suggested, among other things, that Sherman push for the Internal Revenue Service to relax time restrictions for victims to recover taxes they paid on false income reported to them by Madoff. Shapiro sent the letter to some other members of Congress and to another Madoff victim he knew, asking that he consider writing similar letters to elected officials. He also suggested his friend contact others who lost their investments, urging them to write members of Congress for help.
Shortly thereafter, the letter Shapiro thought was private was being widely distributed by California-based Thoroughbred owner Jerry Jamgotchian, who for the past few years has been a relentless critic of Shapiro and many of the policies he influenced as CHRB chairman. Shapiro’s personal tragedy became a very public matter.
How Jamgotchian got a copy of Shapiro’s letter, however, is in dispute.
Shapiro insists Jamgotchian was forwarded a copy of the letter by Los Angeles attorney Roger Licht, whose CHRB seat Shapiro filled when he was appointed to the board by Republican Gov. Arnold Schwarzenegger in October 2004. Licht, an appointee of Democrat Gray Davis, served from February 2001 through July 2004, including one year as chairman, in 2003. Shapiro was chairman from January 2006 until his resignation from the board last December.
Both Licht and Jamgotchian deny Shapiro’s charge that Licht sent Jamgotchian a copy of the letter.
The other Madoff victim contacted by Shapiro forwarded a copy of the letter to Los Angeles entrepreneur Steve Weston, who also was victimized in the investment scam. When rumors about Shapiro being stung by Madoff began circulating in horse racing circles, Shapiro contacted Weston to find out whether he had forwarded the letter to anyone else, and Weston confirmed he had sent it on Jan. 13 to Licht, who was representing him in the Madoff case.
On Jan. 15, when the first published reports of Shapiro’s letter to Rep. Sherman appeared, Weston sent an email to Shapiro saying he had “queried Licht as to whether or not he had sent it to anyone. It was at that point,” Weston continued, “that he told me that he had faxed it to some guy I had never heard of named Jamgotchian. When you and I spoke later that same morning you asked me to call Licht and confirm who he had sent it to and ask them to stop sending it out, I did as you asked. I called Licht again and he confirmed it was Jamgotchian he had sent it to. He placed the phone down so that I could hear him call this guy and I heard him ask Jamgotchian to please stop sending the letter out to anyone else. When he got back on the phone with me he told me that Jamgotchian had told him that he would stop.”
Licht was asked by the Paulick Report if he had sent a copy of the letter to Jamgotchian. “No,” he said. “What’s this all about? You’re the third reporter who’s called about this.”
When Weston’s email to Shapiro was read to Licht, he responded, “I don’t know what Steve Weston is talking about.”
“He told you that?” Weston said, when informed by the Paulick Report of Licht’s comments. “I have emails from him to me apologizing for what he did. I was also on the phone with him when he called Jamgotchian and asked him to stop sending it around. Did he actually deny it? I’m surprised to hear he would lie like that.”
Weston went on to say it would be “ludicrous” to criticize Shapiro or anyone else who invested money with Madoff. “Look at the people who got burned,” he added, “people like Mort Zuckerman and Steven Spielberg. Some of the smartest people in the financial world were victims. This was a failing of the SEC. No investor’s judgment should be called into question.”
“I question the ethics, morals and purpose for Mr. Licht in turn forwarding a copy of the letter to Jerry Jamgotchian,” Shapiro said in a statement. “Clearly doing so was not related to the services he was asked to perform as an attorney representing a client, and his dissemination of my letter to an unrelated third party was done with the sole purpose of malicious intent towards me at the minimum.” Shapiro now questions if it’s possible “much of what Jamgotchian has claimed for years has in fact been fed to him by Licht since he was a prior member of the CHRB.”
Jamgotchian readily admits distributing Shapiro’s letter but categorically denies receiving it from Licht.
“Shapiro is nothing but a blatant and pathological liar,” Jamgotchian said. “Put that in red letters and bold. Somebody faxed it to me. I got it two days after the fact, and I immediately started blasting it out (Jan. 14). I got it from somebody in the press. Why would I get anything from Roger Licht? That’s like saying I got it from (CHRB acting chairman) John Harris. They’re (CHRB) not going to help me with this.”
Jamgotchian’s public criticism of the CHRB and Shapiro began in 2005, after Licht had left the board. Jamgotchian has filed several complaints against the CHRB since then and has been a constant thorn in Shapiro’s side. The Paulick Report asked Jamgotchian why he has been so critical of Shapiro, who is best known for pushing the mandate that California tracks install synthetic surfaces.
“The destruction of California racing,” Jamgotchian said. “My inability to race in California. The destruction of the California breeding industry. The inability to race on dirt tracks. Millions of dollars he’s cost me as an owner. Loss of purses in California. The ADW mess. Reduced track attendance. Closing of racetracks in California. Increased training and vet fees. When I sold all my horses at a huge loss at Barretts. He’s solely responsible for it. He and his stupid decisions with synthetic racetracks, heel nerving and other mistakes he’s made. The last thing he did was get the CHRB budget thrown out in front of the GO (Governmental Organization) Committee.”
In a later email, Jamgotchian wrote: “Shapiro vacuous decisions has put track employees, tote sellers and many horseracing people out of work and took away their dreams!”
After feeling his personal life had been invaded, Shapiro contacted Bloodhorse magazine and Thoroughbred Times to tell his side of the story and express his belief that Licht was responsible for sending a copy of the letter to Jamgotchian. Neither publication, Shapiro told the Paulick Report, would publish the story.
For his part, Shapiro said he has “endured for years the insults and ridiculous claims” from Jamgotchian. “It is beyond the bounds of decency that (Licht and Jamgotchian) would find joy in someone else’s difficulties,” he said.
Shapiro also said his resignation from the board was unrelated to the financial problems resulting from his Madoff investments. Shapiro, in fact, did tell the Paulick Report during a visit to Lexington for the Keeneland September yearling sale that he was contemplating leaving the CHRB and pursuing a non-regulatory industry position. He has been widely rumored to be a leading candidate to head up the Sacramento-based Federation of California Racing Associations.
“I remain committed and hopeful of helping the sport in any way possible,” he said.
Copyright © 2009, The Paulick Report
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Tags: bernard madoff, brad sherman, California Horse Racing Board, jerry jamgotchian, john harris, mort zuckerman, Paulick Report, Ray Paulick, richard shapiro, roger licht, steve weston, steven spielberg
February 4th, 2009 at 8:14 am
Sounds like Jamgotchian is the real problem to me. Why can’t his horses race on synthetics just like the rest are doing? How did this destroy California breeding? What does he want heel nerving to be permitted? Shapiro created the ADW situation? Come on pal, wake up stop poiniting fingers.
February 4th, 2009 at 11:20 am
Excellent story.
February 4th, 2009 at 11:24 am
Shapiro has suffered enough for his personal financing woes. On the other hand, his government mandate to install synthetic tracks was a terrible, knee-jerk decision that has cost the California racing industry tens of millions of dollars.
The Kentucky Derby and Triple Crown are the sports’ most important stage. If I am a California-based owner and have a Triple Crown-type horse, how can I test it on dirt? I am forced to ship out of California. California’s loss will probably be some other circuit’s gain, as some of the top California three-year-olds will have to ship to Arkansas, Louisiana, or elsewhere to test on the dirt.
California horses and sires already must overcome a regional bias. Now that SoCal is a synthetic universe this situation has been made worse. Many synthetic performers will not receive credit or realize their maximum breeding value because of question marks about the surface. California sires will be further marginalized than they already are.
February 4th, 2009 at 1:05 pm
Never mind, of course, that CA horses probably race on a substantially safer surface. “His government mandate”…was Shapiro the only one involved in the synthetic track decision? The story seems a microcosm of what racing faces everywhere, owners and trainers in the sport for $$$ instead of the sport. Instead of training athletes and winning contests, shoring up race tracks, involvement becomes a matter of dividing up the pie.
February 4th, 2009 at 3:53 pm
RE: Ratherrapid’s point about synthetics probably being safer …
Rick Arthur, CHRB equine director (quoted on thehorse.com) said CA used to have a 3.09 per 1000 starts breakdown rate which has been reduced to 1.62 per 1000 starts by (he believes) synthetics.
Clara Fenger DVM previously stated on this website that – based on all available research – the national breakdowns rate has held steady at 2 per 1000 starts over the past 20 years.
If Fenger’s national statistics are correct and Arthur’s CA statistics are correct, then CA horses were breaking down at rates well above the national average before synthetics were installed. At 3.09 per 1000 starts, by including CA in the national statistics you would substantially raise the national average for those years. In other words, if you took CA out of the picture when figuring national averages over the past 20 years, the national figure might have been even fewer than 2 per 1000 starts.
If Fenger and Arthur are both correct, then it appears that CA’s dirt tracks were inherently less safe than dirt tracks in most other states. Maybe CA’s dirt tracks weren’t as well maintained or constructed. Maybe CA could have replaced its dirt surfaces or maintained them better, or reconfigured its tracks, and lowered their breakdowns rate that way.
Statistics are only as good as the people who gather and interpret them, and I haven’t seen any studies myself, so I don’t know whether Arthur’s or Fenger’s numbers are reliable. I wonder how long CA has been scrupulously recording breakdowns information. I wonder how the recent rash of breakdowns at Santa Anita will alter Arthur’s 1.62 per 1000 rate.
February 4th, 2009 at 4:47 pm
Honest. I promise to seriously read the article -
- As soon as I can get up from the floor, where I’ve been rolling around in gales of laughter provoked by the idea that anyone who wants to be taken seriously would willingly retain the birth-given last name of “Jamgotchian.”
I can already see, from the article, that one man had the foresight, along these lines, to change his name from “Ponzi” to “Ponsi,” in an effort to fade into the background after an ensuing scandal.
And it has caught on - big time! The state of California, in an effort to buff up its image after its still-unresolved budget crisis, apparently has changed its name to “Calilfornia.”
Just wait until everyone starts changing their fingerprints.
February 4th, 2009 at 6:43 pm
I would rather run, raise and own thoroughbreds in California than any place on the planet. A huge market of 32 million people, the 7th largest economy in the world and an ideal climate to raise horses. And all we can do to further the cause of racing in this state is to circulate a letter detailing the efforts of Bob Shapiro to get favorable tax treatment following a personal financial wipe out by a Wall Street crook? That’s it, Mr. “Jam it up the butt again”? That’s your well thought out program to restore confidence in California racing?
You should talk to Frank Stronach (Mr. Hey! Who Forgot the Check?) about his well thought out plan to destroy the racing and breeding industry in Maryland; you guys are geniuses in your own minds.
February 4th, 2009 at 8:30 pm
Shapiro is a hero who saved California racing - at least for now. Look at the breakdown rate at the Fairgrounds. Nineteen last I heard, but no public outcry about that. I guess it is just expected there. Santa Anita’s surface is being unfairly criticized by those who expect it to be flawless and those who are incapable of accepting any change. One of the few fatalities we had was on the vet’s list and another was on the steward’s list.
Jamgotchian already had a reputation. He’s cheap and difficult to deal with. Now we find out that he is a low-life as well.
February 5th, 2009 at 10:35 am
PP - “few fatalities”?
There were 7 fatalities resulting from breakdowns at Santa Anita between Dec. 26 and Jan 22. Rick Arthur DVM, CHRB equine medical director, says he is unaware of 7 deaths. He told the LA Times that CA doesn’t count a death as a death unless the horse dies “within the racing enclosure.” So if a horse isn’t euthanized on the track, but breaks down and is vanned off to die elsewhere, Arthur and the CHRB do not count that horse in CA’s 1.62 deaths per 1000 starts statistic.
Come on. This sounds like typical government doubletalk - manipulate the statistics to justify whatever agenda is being pushed - in this case, the CHRB is justifying its decision to go synthetic by claiming a lowered rate of deaths on synthetics.
And another thing - Santa Anita is California’s top racetrack - one of America’s top tracks. Compare its safety with that of Churchill Downs or Saratoga, if you’re going to compare synthetics and dirt.
February 5th, 2009 at 12:28 pm
Noelle, you said nothing about the nineteen deaths at the Fairgrounds. That is nearly three times the number of deaths that Santa Anita has experienced in the five months that the new track has been opened. Why is there no public outcry in Louisianna? Santa Anita made Fox News after the first four breakdowns, partly because people expect there to be no breakdowns on synthetics even with listed horses who should not be racing anywhere. It’s a regional thing, for example the outcry was always much greater in San Diego than Los Angeles. What does that say about various regions?
One thing that can be said about California is that we care very much about the safety of our tracks - or at least some of us do - and we are more than grateful for the leadership that brought us safer tracks. There is no doubt in our minds, or in the stats, that our new tracks are safer, and that should be the only concern with regard to which surface is better.
February 5th, 2009 at 2:37 pm
PP - I did say something about the Fairgrounds - indirectly. What I said was that you should be comparing Santa Anita synthetic track deaths with Saratoga or Churchill Downs dirt track deaths so that you will be comparing numbers of deaths at facilities that are likely to be equal in other respects.
As to the Fairgrounds - who knows what condition that surface is in? The track superintendent thinks it’s in bad shape - pulverized - and cannot tell when it was last replenished and restored.
A dirt surface that is not well maintained is going to be dangerous and a lot of dirt tracks are not being maintained properly.
February 6th, 2009 at 5:54 pm
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