A federal grand jury has been empaneled to hear evidence regarding alleged corruption in Major League Baseball's international player-signing practices. Nathaniel Grow, associate professor of business law and ethics and a sports law expert at Indiana University’s Kelley School of Business, said this poses a significant potential risk for the league, its teams, their front office executives, scouts, and potentially even the league's player agents.
“While the exact scope of the current investigation is uncertain, there are several lines of potential inquiry the government could be pursuing relating to MLB team's international talent acquisition process,” Grow said.
“MLB teams frequently sign Latin American amateur players as young as 16 years old, regularly paying these players signing bonuses as large as several million dollars. In the process, teams -- or their employees -- have occasionally been known to engage in some questionable practices when recruiting these players.
“For instance, MLB teams may provide payments to so-called “buscones” -- handlers who train Latin American amateur players as young as 12 or 13 years old -- in order to sign the buscones' players, payments that could potentially run afoul of the Foreign Corrupt Practices Act, a federal law that generally prohibits U.S. businesses and their employees from paying bribes when doing business in foreign countries, even if those bribes would not be illegal under the foreign nation's own law.
“Similarly, some MLB team officials have previously been charged with skimming some of the signing bonuses they paid out to their Latin American amateur prospects,” Grow said. “It is likely that the federal grand jury is looking into these sorts of practices, an investigation that could have profound implications for MLB's international activities.”
Grow can be reached at 812-855-8191 or [email protected].
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