Monday, July 14, 2008

Get Ready for Another Scandal: FBI Investigating Domincan Signings

The LA Times announced this weekend that the FBI is investigating allegations of skimming by individuals involved in the signing of Latin players. There is suspicion surrounding the amount that these players are being paid and whether MLB employees or Dominican scouts (buscones) are pocketing a portion of the signing bonus.

Latin players are not subject to the amateur draft and therefore are treated as free agents. They negotiate contracts with Major League teams through these buscones, who take an up-front cut of the players' contract money. However, the probe has revealed that the buscones may be taking more than originally agreed upon, with the help of complicit team reps:
One thing the feds will investigate is whether team representatives have become complicit in that practice in exchange for a kickback. One National League executive, who insisted on anonymity, said he offered a $60,000 bonus to a prospect a couple of years ago only to have the buscon demand 10 times that much. Three months later, the executive said, the player signed with another team for more than $1.5 million.
The investigation certainly has the potential to affect major change in the way teams are allowed to deal with players outside of the US. The buscones sound similar to the coyotes that negotiate with businesses to traffic in illegal immigrants from Mexico, in that both are being paid as middlemen with little supervision governing their moral conduct, due to the lawless nature of the industry.

Jose Rijo's Baseball Academy in San Cristobal, D.R.

A day later, ESPN sources claimed that Nationals GM Jim Bowden and special assistant Jose Rijo are central targets of the probe. The source says that both are under suspicion of having received kickbacks from Dominican signings. Bowden said he had been in contact with the FBI but was never informed of any personal investigation:
Federal authorities and Major League Baseball are investigating Washington Nationals general manager Jim Bowden and special assistant Jose Rijo for their possible roles in a growing financial scandal involving the signing of players from the Dominican Republic, several sources familiar with the probe told ESPN.

One source, an MLB official speaking on the condition of anonymity, said the investigation was "in its infancy" and involved allegations about several teams and their employees.
Realistically, shady deals like this probably go down on a regular basis, as there are practically no enforceable guidelines around these signings. I've always been concerned that there is no age limit on signings, and that 16-year-olds are routinely being put under contract. It's true that getting signed often pulls these players out of poverty, but there is no public knowledge of the unwritten contracts held with these buscones. It's a situation ripe for corruption fraud.

We'll see how this all shakes out in the coming months.

[LA Times]