Former racing regulator got job at Running Aces track she oversaw

Racing Commission must now ensure the industry’s ethics.

Mary Manney resigned as deputy director of the Minnesota Racing Commission in June, several months after a state investigation faulted her oversight of the Running Aces harness track in Anoka County.

She landed a job days later — at Running Aces.

Her employment at a track she once regulated is legal, part of the revolving-door pattern of public officials taking private sector jobs in areas they once oversaw. But it is also the latest trouble for the Racing Commission, the governor-appointed group responsible for ensuring Minnesota’s multimillion-dollar horse racing industry is transparent and above reproach.

The investigation into Manney’s oversight, completed by a state-contracted attorney in December, faulted Manney for being indifferent to the rights of horsemen, failing to follow commission directives and portraying herself in a way that could be considered threatening to a witness, according to the report recently made public after the Star Tribune pressed for its release. Manney received a letter of reprimand afterward, but it was later removed by the commission in a split vote when a commissioner decided to conduct his own investigation that he said differed with the state’s findings. That commissioner admitted in an interview that he has long been a supporter of Running Aces.

Within a month after Manney’s resignation, the commission’s former chair, Jesse Overton, resigned after he was vindicated in a gender-bias claim brought by Manney. Last week, Manney’s attorney served a civil complaint against Overton and commission member James Lane, alleging that they’d violated the state’s Data Practices Act by providing the Star Tribune with an un-redacted copy of the report on Manney.

“I suffered significant harm to my reputation and to my family,” Manney said in a statement. She said she was forced to resign from her state job, and blamed many of her problems on Overton.

Lane, vice chair of the commission and an attorney, said in an interview that while the practice of government regulators being hired by the businesses they regulate was hardly new, “all of that revolving-door policy raises obvious questions.’’

“We haven’t been asked to judge whether Mary’s going to work for the track was appropriate or not,’’ Lane said.

Attorney Ralph Strangis, who in early July was appointed by Dayton as the new chair, downplayed any potential ethical issue posed by her employment with Running Aces. “No one has raised with me that there is some ethical violation here,” he said.

Tough times at Running Aces

The state probe offers an inside look at an operation where there was widespread suspicion of what was taking place among track judges, trainers, owners and track employees during a “very stressful year.”

According to the report, applicants for licenses with questionable backgrounds — including race fixing in other states — sought permission to race at Running Aces before background checks were completed. In one case, a trainer was granted a license in 2010 before his fingerprints and criminal history report were sent to the track judges, according to the report. Then, when the criminal history report finally came in, “it was apparent that the [the trainer] falsified his application,” the report stated.

In another instance, a trainer’s father pleaded with a track judge for his son to be granted a license to run horses at the track even though that trainer had been banned from racing in California due to allegations of race-fixing, according to the report. Track judges finally decided to give the trainer “another chance,” and Manney apparently did not object, according to the report.

In addition, the report said that track judges became concerned when horses with mediocre records were suddenly, and repeatedly, in the winning circle, causing concern about the use of performance-enhancing drugs.

According to the state investigation, Manney “engaged in misconduct” in how horses are drug-tested, citing that she had ordered that blood samples be taken from a horse without its trainer being present — a violation of state rules. Manney’s conduct also demonstrated “a pattern of prejudicial behavior” toward two horsemen, the investigator found. “Manney’s indifference toward the rights of others was deliberate and not unintentional,” the investigator added.

Manney also violated the commission’s orders and communicated with a track judge after being placed on leave last September. At the time, she was specifically ordered not to have any contact with someone who could be a potential witness in the investigation. “It was a type of communication that a witness could find intimidating or harassing,” the investigator wrote.

Running Aces also finds itself under increased scrutiny surrounding its finances, battling rival horse track Canterbury Park over disbursement issues of nearly $1 million in purse funds and card room revenue, including nearly $400,000 in harness purse funds allegedly mishandled over the last five years.

On Tuesday, the Minnesota Court of Appeals upheld the commission’s decision not to allow electronic gambling at Running Aces — a decision driven in part by the fact that the state’s Public Safety Department had told the commission that installation of the machines would violate state gambling laws. The court’s ruling is a huge setback for the track because its operation is heavily dependent on gambling revenue from its card room, especially during racing’s winter offseason.

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