Atlanta Braves are part of an FBI investigation, Grand Jury inquiry

About the FCPA

While the 1st two investigative areas mentioned (Drug abuse, human smuggling/trafficking) sound like the most egregious sins (and they are), it’s the third one that could be the one that could ultimately see the most headlines.

In fact, it’s kind of like convicting Al Capone on multiple counts of tax evasion instead of murder.  So I’m going to explain this further.

As an engineer (day job) who has had the occasion to work for commercial firms that sell products overseas, the Foreign Corrupt Practices Act of 1977 is something taken very seriously.  Such firms have annual training sessions to warn against the traps that can lead to violations of the FCPA.

Heck, even though I personally have zero contact with any sales or marketing employees and zero contact with any foreign officials – I still had to take the training.  The reason for this is simple:  corporate officers are responsible for the conduct of their employees, so if there is a violation…

• employees committing the crime go to jail
• corporate officers can go to jail
• the company can be banned from doing business with the US Government

In short, the provisions of the FCPA are an attempt to level the playing field for those doing business internationally by telling US citizens that they can’t pay a bribe to (or anything that looks like there’s a bribe) to a ‘foreign official’ to facilitate a business transaction.

There are additional FCPA record-keeping rules required of public companies registered with the Securities and Exchange Commission (SEC).  That would impact several baseball operations as well – the Atlanta Braves included.

This is not speculation:  Passan mentions the FCPA specifically.  There is an arm of the Justice Department that handles such things and they are “involved”.

Bribes to Whom, Exactly?

That term ‘foreign official’ is fairly broad, and could involve virtually anyone with a connection to a foreign government.  In the extreme, it could even be construed to include a border control agent, a mayor, a customs official, and more.

A 2014 court decision concluded that a negotiated debt settlement arrangement between a Florida company and the Haitian telecommunications company Telco involved an FCPA violation because of ‘side payments’ made to Telco officials because the Haitian government had a controlling interest in Telco.

So do side payments to player trainers in Latin America – the buscones – constitute bribes to steer players in the direction of one team or another?  That may depend on whether (a) these trainers have a connection to a government (local or national) or whether they are passing payments along to others who are.

In general, though, it could certainly be argued that such payments were used as influence to facilitate the acquisition of players in the International baseball market.  Ergo, a violation of at least the spirit of the FCPA statute.

That’s likely one aspect of the Grand Jury probe.