A.G. Schneiderman Announces Settlement Of Lawsuit Against Thoroughbred Retirement Foundation For Past Fiscal Mismanagement And Neglect Of Animals
Reconstituted TRF Board Will Now Include A Veterinarian And Input From Animal Welfare Organizations And Horse Racing And Breeding Industry
Schneiderman: This Charity Can Now Resume Its Critical Role of Caring For America’s Retired Racehorses
NEW YORK - Attorney General Eric T. Schneiderman today announced the settlement of a lawsuit against directors of the Thoroughbred Retirement Foundation, Inc. (TRF), one of the nation's largest charitable organizations dedicated to caring for retired racehorses. The enforcement action charged that directors of the New York-based foundation’s board had neglected their duties by taking on more racehorses than the group could afford to care for, resulting in the neglect and mistreatment of many of these animals.
Under the settlement, TRF will add a veterinarian, named by the Attorney General's office, to its board. A revamped board will also include a director nominated by an animal welfare organization and one nominated by members of the nation’s horse racing and breeding industry. The settlement further requires the board to establish a five-person committee, consisting of the three new directors and two current board members not named as defendants in the lawsuit, charged with recruiting a new, full-time chief executive officer for the organization.
"New York needs the Thoroughbred Retirement Foundation to be fiscally sound and responsibly managed. Our agreement to remake the board of directors will help put this important charity back on solid financial ground and able to care for the animals it receives – and it gives TRF a shot to reclaim its place as one of America's leading thoroughbred organizations," Attorney General Schneiderman said. "As it was previously constituted, the foundation's board proved unable to conduct necessary financial oversight and management."
Attorney General Schneiderman's lawsuit sought the removal of the responsible directors. The agreement requires that both current CEO and board chairman John Moore and long-time director Diana Pikulski resign within a year of a new CEO being hired. Three other directors have resigned from TRF's board since the lawsuit was filed in May 2012. Two defendant directors, Margaret Santulli and Leslie Priggen, will remain on the board.
The lawsuit alleged that TRF took on more horses than it had the resources to pay for and, when it lacked donor funds to cover those added expenses, it improperly tapped the foundation's endowment, established by the estate of Paul Mellon, to secure a total of $2 million in loans. Under the settlement, the organization is prohibited from using the endowment fund to secure any future loans.
Since the lawsuit was commenced, TRF has taken steps to improve its ability to carry out its charitable mission of caring for retired racehorses. Most notably, it has halted a practice of accepting more thoroughbred horses into its herd than it had the resources to adequately sustain. The number in its herd is now fewer than 950, a one-third reduction in the herd’s maximum size before the lawsuit was filed.
Inspections conducted by a team of independent veterinarians retained by the Attorney General's office revealed that, while conditions at certain farms still need improvement, the neglect and mistreatment that gave rise to the suit has been substantially remedied.
The measures TRF has agreed to today will strengthen the organization by removing from the board those most responsible for the organization's past troubles, adding directors who are experts in standards of horse care and bringing in a new senior executive officer. These steps will serve to broaden TRF's appeal to animal rights and horse racing industry groups. With these reforms, TRF finally is positioned to reclaim its place as one of America's leading organizations caring for retired racehorses.
This matter was handled by Assistant Attorneys General Kerin Coughlin and David Ellenhorn, under the supervision of Charities Bureau Enforcement Section Chief David Nachman, Executive Deputy Attorney General for Social Justice Alvin Bragg and First Deputy Attorney General Janet Sabel.