I considered it was more of a token presence than true security. Any determined nobbler would have found it dead easy to get past the deputy’s laissez-faire attitude, chatting and joking with the stable staff with only half an eye at best on the actual horse. But it was good for the cameras, as TV crews from all the local stations were invited from barn to barn to observe the stars ‘at home’.
Frank and I joined the racing press on a small bleacher-seat viewing stand as the twenty Derby contenders made their way out onto the track. By this stage, with less than thirty-six hours to the race, the hard training work was done and now it was only a matter of maintaining peak condition and not overtiring the young equine athletes.
‘Come on,’ said Frank after fifteen less-than-exciting minutes of watching the horses gallop. ‘I’ve seen enough. Let’s go to Wagner’s before the rush starts.’
‘Wagner’s?’
‘Wagner’s Pharmacy.’
‘What do we need a pharmacy for?’ I asked.
‘You’ll see,’ he said with a laugh, leading me back to the Suburban.
Wagner’s Pharmacy was on South 4th Street, across from the entrance to the Churchill Downs infield. And it was not a pharmacy as I knew it.
True, it sold its own proprietary racehorse liniment in gallon containers for the treatment of bumps, bruises and strains, but it was most famously known as the place to have breakfast during Derby week.
Frank and I sat down on the only two free stools at the long counter.
‘Two orders of bacon, eggs over easy, toast and grits,’ Frank said to the waitress behind the counter. ‘Plus coffee and orange juice.’
‘Grits?’ I asked.
‘Boiled ground corn,’ Frank said. ‘I was raised on the stuff in Alabama.’
The waitress poured our juice and coffee and, shortly after, delivered two enormous plates of food – two fried eggs each, four or five rashers of crisp bacon, two rounds of toast, a mini-mountain of fried potatoes, plus a side bowl of grits – a white sloppy concoction akin to lumpy wallpaper paste, complete with a dollop of melting butter on the top.
I sampled a small amount and pulled a face.
Frank guffawed loudly. ‘I reckon it’s an acquired taste.’
I concentrated on the eggs and bacon.
‘Eat up yer grits, man. They’re good for you,’ he said, shovelling another great spoonful of the white stuff into his mouth. ‘Full of iron.’
I’d have rather chewed on a rusty nail for my iron than eat grits, but the rest of the meal was excellent and I was soon fit to burst.
‘It’s a tradition,’ Frank said, forcing in yet another mouthful. ‘It wouldn’t be the Derby without a breakfast at Wagner’s.’
Clearly everyone agreed with him and soon a line had formed out on the sidewalk as people waited their turn to get in. As it was, not a spare inch of floor space was wasted with horsemen, media and a few brave tourists crammed together at tables so close together that no one had enough elbow room to cut their bacon.
And it was noisy too, with most of the banter being about the chances of the various horses in the following day’s big race.
‘Fire Point, that big chestnut colt of George Raworth’s, will surely canter up,’ said one man on my left. ‘Destroyed the field in the Gotham Stakes at Aqueduct in March.’
‘He’s no chance,’ called the waitress as she delivered more breakfasts. ‘He’s drawn in Gate One and everyone knows that being on the rail is not good. He’ll be swamped in the early running.’
Racing really was the religion in these parts come early May.
‘Did you hear that Ryder was shot seven times,’ said someone behind me. ‘Twice in the head, poor man. Killed him instantly, apparently.’
‘He shouldn’t have tried to stick one of them Feds with a pitchfork,’ said someone else. ‘He had it coming, if you ask me.’
Nobody did, and most of the sympathy was clearly with the dead trainer. Overall, however, I was amazed that Ryder’s death hadn’t caused greater disquiet among the racing fraternity. They seemed to take it in their stride, almost as if sudden violent death was an expected part of the business. Of course, it was, but not often for the human participants.
‘I fancy Liberty Song for the Derby.’ The man on the other side of us said it to no one in particular. ‘He was truly brilliant in the Blue Grass Stakes at Keeneland last month. Won by five lengths easing up.’
‘But he had no competition,’ claimed a man sitting further beyond him. ‘I reckon it will be one of those two West Coast horses that’ll clean up this year.’
Racing chat was the same the world over as punters tried to pick a winner.
The truth was that the starters in the Kentucky Derby were all potential champions. They were the best three-year-old horses in North America, each of them having had to qualify through outstanding performances in some of thirty-five other major stakes races held at tracks all over the country. Points were awarded for the first four home in each race and the top twenty points holders were entitled to a place in the Derby starting gate.
This year there were four horses with far more points than any of the others but that was no guarantee of success. In 2009, the $1.4million prize was carried off by a gelding called Mine That Bird, which had been bought as a yearling for only $9,500. His career before the Derby had not been spectacular, finishing last in the Breeders’ Cup Juvenile, but he scraped into the Derby field with a win in the Grey Stakes at Woodbine and a fourth-place finish in the Sunland Derby in New Mexico.
No one gave the horse a chance, the press being far more interested in the trainer, Chip Woolley Jr, who had driven the horse himself the 21-hour, 1,700-mile trip from his home to Louisville in a horse trailer attached to a pickup truck, and with his broken foot in a cast to boot.
Yet, Mine That Bird, stone last and so far out of the running for the first half of the race that he didn’t even appear in the TV coverage, slipped through an opening on the rail at the top of the final stretch and romped home to win by six and three-quarter lengths, the longest margin of victory in over sixty years, and at a price of fifty-to-one. It was a lesson in not writing off any of the starters.
Frank and I finished our breakfast and gave up our seats to the next two in the ever-growing queue. He had been absolutely right about beating the rush.
‘Where to now?’ asked Frank as we climbed back into the Suburban.
‘You’re the expert,’ I said. ‘I’ve never been here before.’
He drove us round to the front entrance of Churchill Downs.
‘You’ll never find anywhere to park,’ I said. ‘It’s the Oaks today.’
The Oaks was sometimes called the Fillies’ Derby. It was raced over the exact same course and distance some twenty-four hours earlier, but was reserved for three-year-old female horses.
Frank just smiled at me. Oaks Day was second only to Derby Day itself as a crowd-puller, not least because if you wanted to buy a Derby ticket, you had to buy one for the Oaks as well. Most racegoers, therefore, made a two-day trip of it.
But that didn’t seem to worry Frank.
A quick flash of his ‘FACSA Special Agent’ metal badge and we were welcomed into the restricted parking lot with open arms.
The same tactic allowed us not only to gain entry to the public enclosures but also to jump the sizable line, and to get in for free. It seemed that the simple words ‘security check’, together with the badge, was an automatic ‘Open Sesame’ to every cave of treasures.
‘He’s with me,’ Frank said, when one of the staff asked for my non-existent ticket. I could get used to this, I thought but, to be fair, I too had an ‘access all areas’ pass for every racecourse in Britain.
Even though it was still well before nine o’clock, Churchill Downs was beginning to fill up. The entrance gates had opened at eight and many had been queuing for several hours before that for general admission tickets. Indeed, even twenty-four hours ahead, there was already a line for Derby Day
with some hardy folk staking their place early so they could be first through the gates the following morning.
General admission ticket holders did not get a seat and were not able to get much of a view of the track itself, but that didn’t seem to dampen their spirits. They were there to see, and to be seen with, the rich and famous.
‘General admission tickets also give access to the infield through the tunnel,’ Frank said. ‘About seventy thousand will cram into there tomorrow and hardly any of them will even get to see a horse, let alone the race. Most come only to drink and get laid. It’s like a big frat party. The bars open at eight in the morning and everyone’s drunk by lunchtime.’
‘It must be hell if it rains,’ I said.
‘It is hell anyway,’ Frank said, laughing. ‘When it rains the women wrestle in the mud. When it’s dry, they just wrestle. It’s a complete nightmare.’
It was far removed from my mental image of Kentucky Derby Day, with gentlemen in seersucker suits and ladies in haute couture and fine hats, all of them sipping traditional Derby mint juleps.
‘Come on,’ said Frank. ‘Let’s go check out the upper echelons.’
The metal special agent badge again worked wonders as we rose in a special VIP elevator directly to the top floor of the clubhouse, to Millionaires Row and the even-more-exclusive ‘The Mansion at Churchill Downs’, where the admission charge was so high that, if you queried the $700 tab for a single bottle of bubbly, you plainly couldn’t afford it.
We wandered round on the deep-pile carpet between the lush leather seating of the dining area, and then out onto the spectacular terrace doing our ‘security check’. The view was indeed as stunning as the price.
Frank and I completed a full sweep of the clubhouse and the grandstand without finding anything out of place.
‘Do you and the others have a specific job to do here?’ I asked as we went through the private suites on the fifth level.
‘Not really,’ he said. ‘They like us to provide a presence and react if necessary. But we won’t get into these sections tomorrow. The Vice President is coming and his security is the job of the Secret Service. They’ll have the place sealed up as tight as a tick.’
‘It must be confusing having so many law-enforcement agencies all working at the same place. Is there an accepted hierarchy?’
‘Not officially, but the Secret Service act like they’re the top dogs.’
‘And are they?’
‘I suppose so. They’re here to protect the Vice President, and what they say goes. They won’t be interested in the racing, only in the people.’
‘While you’ll be busy watching the horses?’
‘I keep an eye out for everything. But the racing integrity work is the responsibility of the state racing commission. They’ll contact us only if they think anything suspicious is going on.’
‘Have they done that before?’
‘A few times. Betting matters, mostly. Especially when someone is trying to avoid paying the tax on their winnings.’
‘Are racetrack winnings taxed?’ I asked with surprise.
‘Sure are,’ Frank said. ‘All gambling winnings are considered to be taxable earnings. Even if you win a car or a trip on Wheel of Fortune, you have to pay income tax on its market value.’
‘So how do people try to avoid it?’
‘Multiple identical bets,’ he said. ‘Any payout over five thousand bucks is subject to hefty withholding tax by the track. So big bets are rare. Much more sensible to have several smaller identical bets on separate tickets. Then, if they win, you collect from lots of different windows, keeping each one below five grand, and don’t tell the IRS anything.’
‘Clever,’ I agreed.
‘Yeah, maybe it is, but it’s also dishonest. And we’re getting wise to that tactic. The IRS is busy installing cameras at the track payouts windows to record faces.’
‘Spoilsports.’
He laughed. ‘Whose side are you on?’
‘Not the taxman’s,’ I said, ‘that’s for sure.’
‘It’s my job,’ he said. ‘Anyway, some big gamblers now get their friends and family to collect for them so that no one individual collects more than five grand. But then those people are required to declare it on their own 1040s, or Uncle Sam might come knocking. There’s nothing as certain as death and taxes.’
‘It still seems unfair to tax a slice of good luck.’
‘Lotto and casino winnings are taxed too. You know those people who put a dollar in the big slot machines in Vegas, pull the handle, spin the reels and win a million? You see it sometimes on the TV.’
I nodded.
‘The IRS takes a quarter straight off the top, there and then. And there’s more to pay the following April fifteenth.’
I shook my head in disbelief.
‘What happens in England?’
‘There is no tax on racetrack winnings. Whatever it says on the ticket, that’s what you get. It’s the same for all gambling. All payouts are free of any form of tax.’
‘Even the lottery?’
‘Absolutely. Every sort of winnings.’
‘Wow,’ he said. ‘I think I’ll move to England.’
On Friday evening, with Frank Bannister still acting as my chaperone and mentor, I went to the Fillies and Lilies party at the Kentucky Derby Museum before moving on to one of the other Derby-eve events in downtown Louisville.
The only problem was that we couldn’t have anything to drink.
‘Not while on duty,’ Frank explained. ‘Not with this baby on my belt.’ He tapped the Glock 22C under his jacket. Although unarmed myself, I felt obliged also to be teetotal for the evening.
There were several other FACSA special agents at both events.
‘Are y’all havin’ a good time?’ Larry Spiegal asked in his deep Southern drawl at the Fillies and Lilies event.
‘Sure are,’ Frank said. ‘But there are more menfolk here in hats than I’ve seen outside a rodeo.’
I looked around and it was true. Most of the men were sitting at tables either in small narrow-brimmed straw trilbies or large ten-gallon cowboy hats. I thought it bizarre to wear hats indoors but my new colleagues thought nothing of it.
‘A true cowboy always wears his hat,’ Frank said, ‘except when greeting a lady.’
Clearly, they didn’t consider that the scantily dressed young fillies at this party were ladies.
‘But we’re inside,’ I said.
‘Inside and out,’ Frank said, ‘makes no difference.’
‘He’ll wear it even when taking a shit,’ Larry added unnecessarily.
‘Especially then,’ Frank confirmed. ‘Keeps it off the floor.’
Yet another reason why I concluded that Americans were a rum lot.
12
I finally turned out my bedside light at almost two in the morning. Not that I’d been partying the whole time.
Frank and I had returned to our quarters about eleven but I had spent the next three hours continuing my examination of the bank statements of FACSA’s racing section.
In the first pass, I had discovered not a single suspicious deposit into any of the accounts. But I hadn’t really expected to. Someone who had been clever enough so far to avoid detection would not have been so stupid as to make large payments into their own personal bank account.
They might, of course, have a second bank account, which they hadn’t declared. But that wasn’t as easy as it sounds. Every US bank is required to disclose the names of all account holders to the tax authorities, together with their dates of birth and Social Security numbers.
Maybe the mole was using an offshore account.
However, that option was also fraught with danger. Under the new Foreign Account Tax Compliance Act, the US Treasury forced a deal with over a hundred other countries compelling their banks to report the names of all US citizens holding accounts with them directly to the IRS. Even the traditional offshore tax havens such as the Cayman Islands, Bermu
da, the Isle of Man and the Channel Islands had all signed up.
Basically, hiding illicit money in a bank anywhere is now extremely difficult, and is getting more so every year as governments bring in new anti-money-laundering measures.
So what is the alternative?
Cash.
We all use cash at some time – for burgers at McDonald’s, taxi fares, milk at a convenience store, even a wager on the horses. Sure, these days, we could probably pay with plastic if we had to, but no one blinks an eye at our using cash.
How about if we also paid cash to fill the car with fuel? Or for the weekly groceries? Even buying an expensive Christmas present for the wife or kids?
Still no one would question our cash in hand.
Indeed, under US law, it was not necessary to report any cash transaction under ten thousand dollars.
So I started to search through the bank statements again, looking for an account that had absolutely no cash withdrawals, no ATM records, and where other transaction activity was sparse, perhaps indicating that utility and other bills were also being settled with cash.
The columns of figures finally drove me to sleep.
But it felt like I had been dead to the world for only a short while when I was woken by a furious slamming of doors and the sound of feet running along the corridor.
Bleary-eyed, I stuck my head out.
‘What’s going on?’ I asked Steffi Dean as she appeared from her room fully dressed in her FACSA uniform, including bulletproof vest and holstered Glock 22C.
‘We’ve been scrambled,’ she said. ‘There’s trouble at the track.’
I dressed in record time and made it onto the last of the black Suburbans to leave, one driven by Cliff Connell and also containing Special Agents Trudi Harding and Justin Pickering.
‘What’s the trouble?’ I asked.
‘We’re not sure,’ said Cliff over his shoulder. ‘Norman got an urgent call from the State Racing Commission saying they needed our help.’
We raced past a large lit-up sign on a pole that showed it was 6.15 a.m. and 52 degrees. I must have slept longer than I realised. The sky was even becoming light in the east.
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