Kentucky Derby: Owners put money on politicians, not ponies

by

Horse race at Churchill Downs

The real money in the Kentucky Derby isn't in the purse or the pari-mutuel, but in the politics. Horse-focused PACs like the American Horse Council, the National Thoroughbred Racing Association and horse breeders and owners have contributed more than $8.7 million to political candidates and parties since 1989 and spent $2.2 million more lobbying. And some of the top donors to these organizations are mega-donors in their own right, having contributed millions more to politicians, parties, PACs and super PACs.

Far from the finish line, the industry jockeys for tax breaks and other special treatment for big political donors. Lobbyists for horse owners, breeders and racers have secured multiple tax benefits from a host of bills, including small-bore measures like the Equine Equity Act, part of which was rolled into and passed as part of the 2008 Farm Bill, and broad legislation like the $787 billion American Recovery and Reinvestment Act, which, among its many provisions, offered accelerated depreciation benefits to horse owners. Race horses also get special tax considerations, and in 2010, when Congress passed a bill to extend unemployment benefits for workers who lost their jobs in the Great Recession, extending the tax break for owners of colts and fillies, mares and stallions for two years was included as part of a package of special interest provisions.

The associations offer all kinds of tax tips to their members. The Louisville, Ky.-based Thoroughbred Owners and Breeders Association offers advice on record keeping, depreciation, capital gains, and how to pass muster with the Internal Revenue Service. (U.S. Tax Court opinions are riddled with examples of the IRS challenging deductions of horse breeders.) For $75, horse owners can purchase a two-volume set from the American Horse Council, written by a former Internal Revenue Service official who's one of the group's Washington lobbyists; for $10, there's the 18-page Tax Tips for Horse Owners.

Senate Republican Leader Mitch McConnell, R-Ky., who introduced the Equine Equity Act, is the top recipient of campaign contributions from horse breeders. McConnell, who makes his home in Louisville, where the Derby will be run for the 138th time Saturday, pulled in more than $130,000 from the industry; former President George W. Bush is second with $129,000, while President Barack Obama comes in fourth at $72,000. But those numbers understate the political pull of the pony: horse racing is a sideline for many of the donors who give to PACs like the American Horse Council and the NTRA.

Consider Robert L. Duchossois, who raises and races horses, rescued racetrack Arlington Park in the 1980s and is a board member of and major investor in Churchill Downs. Duchossois owns other companies worth $2 billion, including the Chamberlin Group, a maker of garage door openers. He's given $5,500 to the NTRA PAC; Duchossois, his company, its PAC and employees and his family members have contributed $4.7 million more to politicians, party committees and super PACs. His daughter-in-law, Janet Duchossois, made $250,000 contributions to both American Crossroads and Restore Our Future; her husband Craig is CEO of the family business.

Ramona Bass, who's given $30,000 to the NTRA PAC, is the wife of Lee Bass, one of the three brothers who comprise the oil and trading firm Bass Brothers Enterprises, which has made more than $2.3 million in political contributions over the years. According to Forbes, Lee Bass has "billions of dollars in Cayman Islands investment accounts. His wife Ramona is the daughter of oilman and thoroughbred racehorse owner Arthur Seeligson Jr.

Robert McNair, owner of the NFL's Houston Texans, and his wife Janice contributed $20,000 to the NTRA PAC; McNair is a prolific political donor, giving more than $2.5 million, including $100,000 to the Make Us Great Again super PAC that supported the presidential aspirations of Texas Gov. Rick Perry. McNair sold his horse ranch, the Stoneside Stables, to a Dubai sheikh in 2008.

Among big donors to the NTRA PAC still active in racing are Bill Casner and his wife Sue, who have given $60,000 since 2002. Casner is part owner of WinStar Farm, whose horse Super Saver won the Kentucky Derby in 2010. This year, WinStar's entrant is Gemologist, among the early favorites to win the contest. When it comes to politics, Casner has played the quinella, putting about $110,000 on Democrats and $160,000 on Republicans. In the current election cycle, he's wagered $10,000 on the Kentucky Democratic Party, and $5,000 on NTRA. The latter has proven to be a sure thing.

Photo credit: Churchill Downs Inc.