The Associated Press

COLUMBUS - Ohio State Racing Commission members and employees routinely bet on horse races and accepted improper gifts, an Ohio inspector general's report found.

The racing commission, which has five board members who serve four-year terms, regulates harness and thoroughbred racing at seven tracks and oversees off-track betting parlors. The commission employs an executive director to handle the day-to-day business operations.

Clifford Nelson, who resigned last month as executive director after 17 years in the post, routinely bet at state-licensed tracks despite a policy that bans commission employees from wagering on live races in Ohio, according to Ohio Inspector General Tom Charles' report Friday.

The investigation concluded the policy was ignored or misrepresented by the executive director, staff and commission members.

Nelson insisted all his wagers were proper.

"There were certain times that it was OK (to wager on live races), like during major racing events," he said. He denied the investigation caused his departure, saying he had been planning to retire for months.

The 25-page report paints a picture of a racing commission beset by mismanagement and ethical lapses.

The report found that more than $8,000 in meals and gifts were given by racetracks to Nelson, staff members and four of five commissioners.

Recipients failed to reveal the gifts on financial-disclosure statements as required by state law, Charles said.

The report also identified more than 100 instances since January 2001 in which Nelson made withdrawals totaling $27,500 from bank machines near racetracks on days he wagered.

"It appears that Nelson was frequently gambling on state time," the report said.

Charles asked the Ohio Ethics Commission to determine whether any ethics law violations exist. He also asked the state auditor and attorney general to see if any misspent state money can be recovered.

Nelson said gambling did not interfere with his job but rather "harmonized what the commission's role is - to protect the integrity of racing, to be totally accessible and totally visible, (and) moving around talking to the wagering public."

Luther Heckman, who has chaired the racing commission since 1995, said he disagreed with many of the report's conclusions.

"I think there will undoubtedly be a commission response that addresses his recommendations by telling him that many of them have already been done," Heckman said.

Nelson retired Jan. 30 after Gov. Bob Taft asked the commission to make a management change.

Taft demanded passage of a clear no-betting policy and "discussed with them the need for a change in management, and as a result, Cliff Nelson resigned," said Orest Holubec, Taft's spokesman.

The governor has not determined whether any of the five commission members must go, Holubec said.