Mark Vogel, the beleaguered Prince George's County developer whose financial and drug problems have become a public spectacle, virtually signed over control of his harness tracks to the Maryland Racing Commission yesterday.
The nine-man racing board, acting under broad statutory powers granted to the regulatory agency, has seized operating control of both Rosecroft Raceway and Delmarva Downs and installed the tracks' current general manager, James J. Murphy, as a sort of quasi-public trustee.
Rosecroft, located in Oxon Hill in southeastern Prince George's County, is about two thirds through its yearlong meet. Delmarva Downs, near Ocean City, is closed for live racing but is open to take bets on Rosecroft simulcasts.
It is the first time the commission has taken over managerial and financial control of an ongoing racing operation at a state track.
The unprecedented move is seen as a particularly strong action on the part of the commission, especially from a board that has been perceived at times to be ineffectual. The agreement comes up just short of actually forcing Vogel, 42, to sell the tracks.
Under details of the three-page document, which was obtained by The Evening Sun last night and is expected to be released before a legislative subcommittee today, Vogel is removed from "any and all involvement" in the operation and management of the tracks, although he still retains ownership.
Murphy has been handed the financial reins, but under what appears to be strictly structured constraints mandated by the commission. Murphy is the sole authority who can write checks or transfer funds, but any unusual expenditures, above ongoing business expenses, must be approved by the commission.
The agreement further dictates that all monies currently owed to the track must be deposited in track accounts and that Murphy can be fired from his financial duties any time that his actions aren't deemed appropriate and responsible by the commission.
Murphy, who was hired by Vogel to run his harness tracks last year, has been criticized by harness horsemen for being too close to Vogel, for not being "a harness man," for being too actively involved in thoroughbred enterprises in Atlantic City and Texas, which takes him away from Rosecroft, and for banning popular driver Steve Warrington from the track this summer (Warrington was reinstated after intense public outcry).
Murphy, who was said to be in Atlantic City last night, was unavailable for comment.
According to its final clause, the commission agreement remains in effect until the commission and Vogel mutually agree that the harness industry is no longer jeopardized.
The commission's extraordinary action was prompted by disclosures that Vogel had diverted as much as $2 million from his track enterprises to shore up other business ventures and had used the track as collateral to obtain a loan from the Riggs Bank for the $400 million Bowie New Town Center, one of his real estate projects.
Some have suggested that the board's aggressive action also indicates that the commission might be privy to information not yet made public.
Horsemen had been complaining that the track took as long as three weeks to pay purse monies. Usual practice dictates that the money is available as soon as a winning horse clears his urinalysis test, normally 48 hours.
There were also complaints that the track had cut promotional expenditures, which resulted in a decline in business, and reports that employees were urged to cash their paychecks at the track in order to keep up the track's cash flow.
The agreement prevents Vogel from making further withdrawals from track coffers. It also places controls that should ensure that horsemen and other vendors will be paid, and in a timely fashion.
William Fogle, secretary of the state Department of Licensing and Regulations, which oversees the racing commission, said the board felt it must step in at this time to protect the harness industry and isolate it from Vogel's other financial woes.
But Fogle said he didn't think the agreement attacks the integrity of current track management. "Obviously, though, we will be stepping up the lines of communication between Murphy, who continues in his role as general manager of the day-to-day operation, and the commission," Fogle said.
Rosecroft averages about $493,000 per night in betting handle with a daily average attendance of 3,300 fans. It is regarded as the nation's fifth-leading harness track.
Dr. Allan Levey, who was just named to the commission in July, said he was proud of the commission's actions. "I think the commission did everything it was supposed to do," he said. "We had to assure the public that Mr. Vogel's problems were not going to affect the racing industry. This is the best thing that could happen. Rosecroft is alive and well. No one can afford the perception that it is not."