In the wake of Monday evening’s surprising decision by the board of directors of the Maryland Thoroughbred Horsemen’s Association (MTHA) to invalidate last week’s membership vote to change the group’s bylaws (here), a number of members of the group expressed mounting frustration. Meanwhile, among some a growing sense began to emerge that it was time for cooler heads to try to broker a solution to the issues.
Supporters of the 9-5 Board vote to hold a second vote on the amendments pointed to concern over the participation of ineligible voters in the process. According to the MTHA, some 87 people obtained owner or trainer licenses — thus entitling them to MTHA membership — too late to be allowed to vote in the April 30 meeting. But because of an error by the MTHA, those people were not excluded from the voter rolls or from the meeting itself but were instead allowed to participate.
Although multiple MTHA leadership sources did not speak for attribution, they estimated that “some” to “many” of those 87 people did participate in the election. But no firm numbers exist because the MTHA did not keep a record of who attended the special meeting and thus cannot cross-reference new member lists with meeting attendance.
Those opposing the Board decision expressed frustration that the will of the membership was, in their view, being ignored by the Board. “Nearly 250 people came out at an inopportune time with insufficient notice to attend the meeting last week,” said Board member R. Larry Johnson, who had proposed the bylaws amendments. “The Board decided that that didn’t happen at all.”
Michael Horning, another Board member, supported Johnson’s position. “I think it’s wrong to overturn a vote of a duly called special meeting of the members. It’s irresponsible oversight and governance of the organization,” he said.
Owner Libby Butts, one of those who attended the membership’s special meeting, told me, “I’m really angry about the way this whole thing was handled. If the votes weren’t going to count, I wouldn’t have taken the time off.”
On social media, predictably, the responses were less kind. One Facebook commenter lamented that “the fix was in,” while on Twitter, one scion of a Maryland racing family sputtered that, though not a member of the MTHA, “I am livid. How can this… activity continue?”
Trainer/owner/breeder Ann Merryman, commenting on my earlier post about the Board’s decision, called it “so unreal.” And commenter Robbieleibner, commenting on the Paulick Report, asserted, “If [the Board members who supported the re-vote] had a conscience, they would be ashamed of themselves.”
At the same time, a growing number of people believe that the expiration date on the organizational acrimony has passed.
Trainer Katy Voss, a member of the Board, had signed a statement opposing the bylaws amendments as “detrimental to and contrary to the best interests of the MTHA and its membership.” Yet she opposed the re-vote and worries that the infighting is harming the organization. “We need to get the ballots out quickly for the next vote,” she said. “We need to get this thing behind us, however it comes out.”
Similarly, board member Christine Bricker opposed the bylaws amendments but favored leaving intact the actions of the special meeting. “I didn’t care for all the amendments,” she said. “But the outcome was what it was. To me, you have to live with what the outcome was. We need to accept that and go forward.”
That, of course, may be difficult given what Larry Johnson called the “inflamed passions” of many MTHA members. Still, some believe that some sort of negotiated settlement remains a viable option.
“We don’t have to take sides,” Bricker said. “We need to work through this together.”
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(@turfbloggers) (@turfbloggers)
May 9, 2012 at 10:18 am (UTC -4) Link to this comment
More details, reaction from members to recent MTHA board decision to invalidate vote for change @ThatsAmoreStabl http://t.co/OcxvQNZ2
Michael
May 9, 2012 at 12:33 pm (UTC -4) Link to this comment
Sounds like I’m reading an article on the US Congress and we all see how that has turned out.
MD Horseman
May 9, 2012 at 1:18 pm (UTC -4) Link to this comment
Now that the MTHA has decided to strictly enforce the organization’s bylaws, perhaps they can turn their attention to another bylaw, the one that addresses conflicts of interest.
According to the MTHA federal tax returns, available publicly at http://www.foundationcenter.org/findfunders/990finder, the MTHA reported that The Hoffberger Company, Hofferberger Group Insurance, received $32,308 in 2010, the most recent return available. At least one 990 from a prior year reported similar information. MTHA reported on its 2010 return that the money paid to Mr. Hoffberger’s business was for “ A D&O POLICY AS WELL AS A SPECIFIC TYPE OF FIRE POLICY RELATED TO HORSE MORTALITY THAT IS NOT OTHERWISE COMMERCIALLY AVAILABLE.”
The MTHA bylaws require in pertinent part that, “No Member or spouse of a Member who, as of the date of any Election, or during the two (2) year period prior to the date of such Election, is or was … (c) the owner of a beneficial interest in a business contracting or doing business with this corporation, may serve as a Director of the corporation. No person entering into any of the relationships described hereinabove after Election as a Director may continue to serve as a Director of the corporation. The Board, however, is authorized to waive the prohibition contained in this Section for good cause.”
For the current Board to be in compliance with this bylaw, it would have had to have waived this explicit conflict for good cause or awarded the policies to a different insurance company. Has it done so? If the Board waived the prohibition, what was the good cause for the directors and officers’ policy, which is widely available from many commercial sources and which generally protects board members from claims such as breaches of fiduciary duty? (Presumably, the Board would point to the explanation it provided to the IRS regarding the fire insurance policy, although they still would have had to take an affirmative step to waive the conflict). Exactly how much of the MTHA’s money has gone to Mr. Hoffberger‘s business over the years?
As the Board takes steps to address its self proclaimed error in conducting the most recent election, will it be equally vigilant in enforcing this bylaw? And if, as the MTHA stated in their press release on May 7, they conduct a new election, will horsemen get answers prior to the election? Hopefully, the “cooler heads” will consider these questions as they attempt to broker a solution.
MD Racer
May 9, 2012 at 3:41 pm (UTC -4) Link to this comment
A very interesting point raised by MD Horseman. If the MTHA is going to strictly enforce the bylaws, then it must enforce ALL of the bylaws with equal vigor. If MD Horseman is correct and this Board never explicitly waived the conflict for “good cause”, then Mr. Hoffberger has been serving in contravention of the bylaws. Furthermore, if Mr. Hoffberger has been serving without the explicit waiver of conflict then every meeting of this Board in which Mr. Hoffberger has attended and/or voted must be deemed inappropriate and Board actions at those meetings that Mr. Hoffberger participated in should be deemed invalid – just as it is contended that the 4/30 Special Meeting results are not valid in light of potential inelgible voters. Mr. Hoffberger would be deemed as an ineligible Board member if THIS BOARD did not explicitly waive the conflict. It is THIS BOARD that is relevant. This Board has members who have not previously served and thus any waiver by a prior Board would not be sufficient. We have been told that all actions of the Board are transmitted via the monthly newletter so it should not be difficult to review the Board actions that are in the newsletter and determine if the conflict was explicitly waived. If this Board did waive the conflict , then the bylaws are clear that it can be only for “good cause”.
There is another bylaw issue that raises serious concern and requires attention. The bylaws specifically state that ballots for an election need only be “returned” to the corporation. There is no requirement that the ballot be mailed to the MTHA. It has been reported that at least one eligible member who wished to drop off a ballot for the last Board election was told that the ballot would not be accepted or counted if it was hand delivered. If this is true, then the last election of the Board has to be deemed invalid for the same reason that the 4/30 meeting was deemed invalid – because it was conducted without complying with the bylaws. So, the ENTIRE Board may be serving in direct contravention of the bylaws.
If all that has been stated in this blog and comments is proven to be factual.then the General Counsel of the MTHA has an ethical responsibility to act in accordance with ALL the bylaws. The scenarios outlined would necessitate an invalidation of all Board meetings that included an ineligible member and perhaps even invalidating the last Board election in its entirety. It might be time for the general membership to hire an independent counsel to review some of the governance issues that are raised in this blog and comments. Or, in the alternative, it might be time for the general membership to seek out the appropriate gonvernmental agency to review these matters.
What is certain is that the 4/30 election and the last election of the Board have raised numerous troubling governance issues and failures to act in accordance with the bylaws. Therefore, ALL facets of any future elections must be handled by an independent party that does not currently do business with the MTHA or all future elections must be held under the careful eye of the appropriate governmental agency.
For some members the acrimony, the distrust, and the sloppy governance indicate that the only hope for integrity in the process will be decertification of the MTHA and establishment of a new organization to represent all horsemen. Maybe even a new organization that has audited elections, term limits, staggered terms, and strong conflict of interest policy that cannot be waived. All these issues have been well highlighted by Mr. Johnson. I, for one, am very grateful that Mr, Johnson brought these issue to the forefront. Let the members decide.
Lead Pony
May 9, 2012 at 6:42 pm (UTC -4) Link to this comment
I would like to know why the MTHA allowed ineligible voters to enter the meeting. Badges were checked against a master-list, wrist bands applied, the mysterious lock-box were all just for show. I would submit that this was a well choreographed plan to defeat a bylaw change at any cost. If the the bylaw was defeated at the special meeting nothing would have been said about ineligible voters as they voted the “right way.”
admin
May 10, 2012 at 8:57 am (UTC -4) Link to this comment
Thanks, folks, for weighing in.
Let’s hope, Michael, that we can get things worked out better than they’ve managed in the Congress!
Horseman – fair questions all.
Racer – these are pretty big – which is to say, really really big – steps you are suggesting. I’d hope for solutions acceptable to all that stop short of them.
Pony – while I know people are frustrated with what’s happened, I haven’t seen the evidence yet that suggests that this was anything other than a screw-up.
Thanks again, all.
Robbie Leibner
May 10, 2012 at 11:31 am (UTC -4) Link to this comment
It is time to decertify the MTHA.
Does anyone out there really think Hoffberger, et. al., weren’t fully aware of the “participation of ineligible voters” before the vote count? The only reason you are now hearing about this fabricated issue is because they lost the vote. Does anyone really think we would hear about this issue if they had won the vote count? They are morally bankrupt.
Decertify Now.
F.Powell
May 11, 2012 at 11:57 am (UTC -4) Link to this comment
An organization whose officers and directors operate with self-serving goals and personal agendas must continually defend actions taken which they know are not in the best interest of the Assocation. The 9 supporters of the vote think first and only of themselves and should be removed/