The audit committee of Hollywood Park has launched an investigation into allegations that Marje Everett, the track's chief executive officer, may have used company goods and services for private use.
Meeting Monday, the audit committee delegated the Arthur Anderson Co. to look into conduct by Everett that was questioned by R.D. Hubbard in a letter to Warren Williamson, secretary-treasurer of the Hollywood Park Operating Co. The letter, dated Nov. 15, was later circulated to the operating company's board of directors.
Everett was also the subject of a suit Monday filed by Hubbard's attorneys in U.S. District Court in Los Angeles against her and five other board members for allegedly violating Securities and Exchange Commission rules.
The suit contends that the Everett group, which also includes John Forsythe, Merv Griffin, Aaron Spelling, Allen Paulson and Stanley Seiden, made false statements about Hubbard and his motives.
Hubbard wants the group to publicly declare they were wrong and make new SEC filings that reflect the changes.
Hubbard, one of the Hollywood Park's principal stockholders, is seeking to oust Everett and has initiated a proxy fight that has already cost more than $500,000.
According to the suit, a spokesman for Everett asserted that Hubbard wanted to take the company private. Hubbard says he has no plans to do that.
In addition, the suit says that statements made saying the track, if sold, could be used only for racing were incorrect. Hubbard contends the zoning of the track could allow for other types of development, and that a sale could not legally be made with those restrictions.
"According to the Inglewood Municipal Code, the zoning classification . . . does not limit the property to a racing use and expressly allows it to be used for, among other things, hotels, motels, restaurants and office buildings," the suit alleges.
Charlie Perkins, a spokesman for Everett, said that Hubbard's history shows he has taken companies private after buying them. He also reiterated that the track, if sold, would only be to someone who would keep it a race track.
While the suit allegations were made public, the allegations of misuse of company funds remained in the investigation stage.
"There have been a series of allegations, and in due diligence we're obligated to look into them," Williamson said. "They may only be the tip of the iceberg, but it's hard to say right now. The accountants are looking into the allegations, and it may be 30 to 45 days before they report back to us."
The other members of the audit committee are John Newman and G. Michael Finnigan, Hollywood Park's chief financial officer. Newman declined to comment on Monday when asked about the audit committee's meeting.
In the Hubbard letter to Williamson, it was suggested that Everett may have used company funds for renovations to her residences. Everett, who no longer maintains a residence at a Beverly Hills hotel, lives in a mansion in Holmby Hills that formerly belonged to Art Linkletter and Henry Mancini.
Hubbard's letter said that his investigators indicated that there may have been "extensive work" done at Everett's home in security and audiovisual areas, and that the bills may have been paid by the track rather than Everett.
Everett could not be reached for comment. In New York, one of her spokesmen, Harris Diamond, said that the letter was a "standard smear" by Hubbard.
"In his letter, he gave no background for the allegations," Diamond said. "I think they're exceptionally scurrilous, and Hubbard knows they're a smear. I don't want to say it too loudly, but Mrs. Everett has never taken a salary for working at Hollywood Park."
Horse Racing Note
The attorney for Pat Valenzuela, the embattled jockey who hopes to ride in the $1-million Hollywood Futurity on Sunday, said Monday that he has asked the Hollywood Park stewards for a hearing on Wednesday. Valenzuela, who was suspended indefinitely by the stewards after calling in sick at Santa Anita on Nov. 3, is the regular rider for Best Pal, the winner of the Del Mar Futurity and the Norfolk Stakes and possible favorite in the Hollywood Futurity.
In suspending Valenzuela, who has a history of drug problems, the stewards referred his case to the California Horse Racing Board, and last Friday the board returned the matter to the stewards.