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A probe hits horse country

Lexington, Ky., has always had a pretty high opinion of itself. The Idle Hour Country Club, the inner sanctum for Thoroughbred horse breeders and other bluebloods, is about as smugly exclusive as such places get. Lexington's upper-class chat just now should be preoccupied with the annual Keeneland yearling sale in three weeks. Instead, each day the conversations are thicker with unsavory gossip: a federal grand jury meeting in Lexington has been hearing testimony reportedly about cocaine use, illegal gambling and prostitution, and will reconvene next week. The New York Times stirred up the city even more with a long front-page story on the investigation.

Kentucky Governor John Y. Brown, 49, the husband of TV Sportscaster Phyllis George, and a dark-horse presidential aspirant, is not a target of the probe. But the investigation is focused squarely on one of his best buddies. The Governor was obliged to answer questions about the fuss at a press conference last week. Though the FBI and the local U.S. Attorney will not comment officially, a main subject of the probe is James Lambert, who owns a local discothèque and whose home had been under surveillance by state and federal investigators.

Lambert, 44, has been a friend of Brown's since their University of Kentucky days together, and the two were business associates a decade ago, when Brown was board chairman of the Kentucky Fried Chicken restaurant chain. In April, federal agents raided Lambert's Lexington house. Apparently tipped off in advance about the raids, Lambert fled to Europe. The agents' haul included cocaine, shotguns and suspicious documents.

TIME has learned that among the documents seized were lists of code names, like those a bookie would keep to identify bettors. One name recorded was "Mr. McGoo," a sometime pseudonym for Governor Brown when he placed bets, according to an official involved in the case. Brown, whose wealth is estimated at $30 million, concedes that he made wagers with Lambert. Brown also admits that he withdrew $1.3 million in cash during 1981 and 1982 from a Miami bank, much of it to cover gambling losses. Said he last week: "I spent some of it, saved some of it and had fun with some of it." Brown promised not to gamble any more during his remaining six months in office. He may also quit smoking: late Saturday night the Governor, who had been suffering chest pains, underwent open-heart surgery to remove blockages.

A recent Louisville Courier-Journal editorial scowled about "his defense of the indefensible." The Lexington Herald-Leader was stern: "What may be acceptable behavior for an entrepreneur is not acceptable behavior for the Governor." Brown insisted last week that he had never used cocaine, in fact had never even seen any, and that he does not "condone Jimmy Lambert or anybody else who might have used it."