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As Major League Baseball (MLB) continues the post-steroid cleanup, yet another ugly issue has raised its head–salary kickbacks for front office personnel and scouts which deprive young Latin American baseball prospects of hundreds of thousands of dollars in signing bonus money. After a lengthy federal investigation, criminal indictments were filed against three former Chicago White Sox employees, including David Wilder, a once-promising front office member and close adviser to White Sox General Manager Ken Williams.
According to the indictment, Wilder and two White Sox scouts in Latin America allegedly misrepresented the amount necessary to sign various prospects and omitted information about payments to such players, leading to artificially inflated signing bonuses and contract-rights purchase payments. Wilder and the scouts then pocketed the excess payments. The indictment further details that the two scouts purposely sought players with whom they knew kickbacks were possible and players already under contract, in order to inflate contract rights prices.
Although these three individuals are so far the first and only to face federal charges, they are not the only ones who have been impacted by the scandal. In March 2009, Jim Bowden stepped down as General Manager of the Washington Nationals amid an MLB investigation into his alleged contract skimming activities dating back over a decade, although he continues to maintain his innocence. Similarly, in August 2008, the New York Yankees fired their heads of Latin American and Dominican scouting for their possible involvement in a kickback scheme.
In 2008, the Boston Red Sox fired Pablo Lantigua, their then-scouting supervisor for the Dominican Republic, for accepting a gift from a buscone, or talent-hunter. Although Lantigua doesn’t deny the allegations, he does offer an interesting justification–gifts and kickbacks are part of the cost of playing ball in the Dominican. With rising salaries, and signing bonuses now over $100,000, starving young prospects need an “in,” buscones need money, and scouts subsist on minimal amounts, possibly as low as $15,000 a year for a full-time job.
Because Latin American players are not eligible for the MLB amateur draft every June, the dusty ball fields often turn into free-for-alls on July 2, the date on which MLB clubs can sign sixteen year-old international free agents. Often lost in that dust is a large amount of cash skimmed by thirsty talent-hunters and underpaid agents, money that is supposed to belong to the athlete who has earned his way out of poverty and into the U.S.
On November 20, Wilder pleaded not guilty to seven counts of mail fraud, while his co-defendants have yet to be arraigned. Still to be determined is what happened to the $400,000 dollars destined for Dominican prospects which allegedly never reached its intended targets. The FBI’s investigation is ongoing and has expanded into Venezuela, an important step in curbing the abuses of buscones and scouts and protecting young, unsophisticated Latin American prospects.
The MLB has encouraged the FBI’s investigation and undertaken to fully cooperate, while also implementing reforms designed to limit the access of third-parties to signing bonus money. However, as a distant external regulator, there is very little the MLB can actually do to curb the buscone system or actually limit skimming by scouts outside of cooperating with the federal investigation if it seeks to maintain its current system. Although federal prosecution may be an effective deterrent to the most egregious kickback schemes, it is unlikely to have a serious impact on the day-to-day events on Latin American diamonds–as long as kids want to be stars, they will be willing to promise anything to someone willing to help. Plainly, unless the MLB makes Latin American amateurs draft-eligible or implements a more regimented camp system, the buscone system will continue to thrive, and baseball clubs and their Latin American signees will continue to lose millions to scouts who won’t get caught.
– Alex Payne
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