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Baseball Law Roundup: Dotel, MASN, Verlander, Venezuela

We have never seen this much baseball legal news in one week...

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Last week was one of the busiest in terms of baseball legal news we’ve ever seen.

Each event deserves its own story, and we’ll look at them in depth in the coming weeks, but for now let’s recap the big stories and what they mean moving forward.

Octavio Dotel, Luis Castillo Implicated In Drug Smuggling Ring

The week began with a pair of retired MLB veterans making news for all the wrong reasons. Octavio Dotel is most famous as a journeyman who played for 13 MLB teams, an MLB record until Edwin Jackson came along and pitched for his fourteenth team earlier this year. Luis Castillo - the second baseman, not the pitcher - is most famous to Mets fans for this debacle of a play.

In any event, Dotel and Castillo now have something new to add to their Wikipedia pages.

Per People Magazine’s Rachel DeSantis:

Octavio Dotel, 45, and Luis Castillo, 43, both World Series champions who played for more than a decade in the majors, were allegedly linked to what Dominican Republic Attorney General Jean Alaín Rodriguez called “one of the most important drug trafficking structures” in the region, which authorities allege was run by César Emilio Peralta.

Dominican authorities allege that the two former players laundered money for Peralta’s drug operation. “Laundering money” is a term that, despite having made it into the public vernacular, isn’t well understood. The U.S. Treasury Department’s Financial Crimes Enforcement Network describes money laundering in this accurate, if extremely unnecessarily flowery language:

Greed drives the criminal, and the end result is that illegally-gained money must be introduced into the nation’s legitimate financial systems. Money laundering involves disguising financial assets so they can be used without detection of the illegal activity that produced them. Through money laundering, the criminal transforms the monetary proceeds derived from criminal activity into funds with an apparently legal source.

To put this another way, it is the rare person who will commit a crime with intent to not spend the ill-begotten money. To spend it, though, the person must hide from whence it came. This means that the money must be placed into the financial system without drawing suspicion. As Kevin McCoy wrote for USA Today,

Placement techniques include structuring currency deposits in amounts below the $10,000 reporting requirement for banks, or commingling the illicit funds with money from legal activities.

Later, the launderer will “layer” the money - i.e., hide it in shell companies or through complex transactions - before converting it into more stable, less suspicious assets like real estate (a process called “integration”).

A person who is already wealthy would, in theory, make a fine money launderer; he would already be making complex transactions with large amounts of money, and so wouldn’t raise eyebrows by doing so. The only difference would be that some of the money he is using wouldn’t be his own. By mixing the funds, the provenance of the illicit money becomes harder to figure out. In other words, the money is now “cleaned.”

Dotel was arrested by authorities in the Dominican Republic, Castillo, who lives full-time in Florida, was not in custody. Further, Castillo’s lawyers denied his involvement in Peralta’s operation.

“Mr. Castillo has not been arrested or involved in any drug ring, cartel, drug trafficking, money laundering, or other criminal conspiracy,” wrote lawyer Alan Wilmot in a statement, adding that Castillo has not been indicted, lives full-time in Florida, and has not recently visited his home country.

Darren Heitner, lead attorney at the firm for which Wilmot works, added that he disputed his client had even been accused of anything, because Castillo had not been contacted by law-enforcement.

But there was one more baseball-related link in this investigation.

“In the operation, [Dominican police] raided 15 nightclubs, 10 restaurants, three shopping malls and more than 20 luxury apartment buildings in the National District and Sto Dgo [Santo Domingo] East,” tweeted baseball journalist Antonio Puesán. “Among them, one in the Blue Tower building, where former baseball player David Ortiz also has one of those properties.”

Ortiz, the slugging designated hitter who helped end the Boston Red Sox’s World Series drought, was seriously wounded in a shooting at a Dominican Republic nightclub in June.

New York Judge Rules In Favor of Nationals in MASN Dispute

This Spring, I wrote for Fangraphs about the never-ending dispute between the Nationals and Orioles arising out of their joint ownership of the Mid-Atlantic Sports Network, and the Orioles’ ongoing insistence on paying their neighbors as little in rights fees money as possible. In the past, the Orioles were able to win appeals reversing adverse rulings because the Nationals were represented by counsel with a conflict of interest, even though each tribunal to review the issue thus far thought the awards to the Nationals were fair, and even though the MLB Constitution prohibits teams from suing each other. Yet the Orioles milked the conflict of interest problem until the Nationals retained different counsel (which Washington should have done in the first place).

Despite the fact that the Nationals fixed their conflict-of-interest problem, the Orioles weren’t done fighting, arguing that Major League Baseball itself had a conflict of interest.

Rob Manfred has long critiqued the team for its scorched-earth MASN strategy, and because the Nationals owed MLB money, the Orioles argued, in essence, that MLB and its constitution were unfairly pro-Nationals.

For the court, that was a bridge too far.

The Orioles lost the latest round in the long-running Mid-Atlantic Sports Network television rights dispute Thursday when a New York judge upheld a second arbitration ruling ordering the network to pay the Washington Nationals $296.8 million in rights fees for the 2012 to 2016 seasons.

Judge Joel M. Cohen rejected the Orioles’s request to throw out the award based on questions about the impartiality of the Major League Baseball arbitration panel. Such questions led a judge to overturn the original award.

The new arbitration award is almost identical to the one that was thrown out and sent back to a second MLB arbitration panel, but the gross compensation figure is believed to include the reported $197.5 million the network already paid the Nationals for the five seasons covered.

The Orioles would still owe the Nationals about $100 million if the award survives further appeal, though the amount the Washington team actually would receive likely would be reduced once MASN restates its profits from that period to reflect the higher rights fees. The judge also ruled the Orioles must pay the Nationals interest on the unpaid fees.

The Orioles, unsurprisingly, plan to appeal anyway.

The Orioles are also treading on thinner and thinner ice. Not only have they lost before every arbitration panel and every tribunal that has reviewed the merits of the arbitration award, but increasingly MLB itself is losing patience with Baltimore’s Birds. Between that and the growing questions about who actually is in charge of running the team, whispers that the Orioles are headed to Nashville continue to swirl. Last time, I remarked that the Orioles’ lawyers have a worse batting average than the team’s first basemen. It seems that may have been overly unfair to Chris Davis.

Tigers Ban Free Press Reporter Anthony Fenech from Clubhouse

During the Astros’ series against the Detroit Tigers in Houston last week, one of the major storylines was understandably future Hall of Famer Justin Verlander returning to the Motor City to pitch against a group of minor leaguers wearing his old uniform (too harsh?). In any event, more interesting than the game itself was what occurred afterwards:

A Detroit Free Press reporter was barred from the Houston Astros’ postgame press conference last night because Justin Verlander said he would refuse to speak with media if the reporter was present.

Anthony Fenech, who has covered the Detroit Tigers for the Free Press for four years, was blocked from entering the press conference, which is a violation of the Baseball Writers Association of America regulations, at Verlander’s insistence.

The Astros later confirmed that they barred Fenech from the clubhouse at Verlander’s request.

The Astros blocked Free Press writer Anthony Fenech because Verlander was “adamant” that he would not speak to any credentialed media while Fenech was present, according to Gene Dias, Astros vice president of communication.

And the Astros were serious about banning Fenech, having security physically bar the reporter from their clubhouse.

The Astros allowed reporters from Houston to speak with Verlander for six minutes after Wednesday’s game while three security officials stood between Fenech and the entrance to the Astros’ clubhouse.

For his part, Verlander insisted that there was more to the story, and tweeted as such after the game.

Now, it’s entirely possible that Verlander had reasonable cause to not want to speak with Fenech. Fenech, for the record, has been accused of questionable behavior in the past. But even assuming that Verlander’s version of events is entirely accurate, that he contacted the Free Press with legitimate concerns about Fenech’s purported unethical behavior and was ignored or rebuffed, the simple fact is that the pitcher wasn’t allowed to ask the team to bar him from the clubhouse, and the team absolutely wasn’t allowed to grant the request. That the team did so was a significant violation of the Collective Bargaining Agreement, and both the pitcher and team should face discipline.

Attachment 34 to the MLB Collective Bargaining Agreement is pretty clear about guaranteeing media access to players before and after a game. Paragraph 2 of that Attachment states (emphasis mine) that “the working media shall have access to both clubhouses no later than 10 minutes following the final out of each game (including doubleheaders and day/night split admission games).” Later, on paragraph 3, the Attachment states (again, emphasis mine) this:

The working media’s access following a game shall be for a period no longer than one hour unless reasonable access to players is not provided during that time; provided, however, that cardcarrying members of the Baseball Writers Association of America (“BBWAA”) will have unlimited access after the post-game opening of the clubhouse. If reasonable access is not provided, the clubhouse must remain open. Members of the media, other than BBWAA members, may make arrangements with the club PR Director for extended access.

Generally speaking, “shall” makes the associated command mandatory; it’s a directive which removes the right of the directed person to disregard it. Fenech, a member of the BBWAA, was not given unlimited access or access within ten minutes, because he was not given access at all until after Verlander left the clubhouse. And that’s simply not acceptable.

On page 255 of Attachment 34, the CBA states that “Any club whose personnel violate these regulations will be disciplined.” The way the CBA is worded, there’s simply no way for MLB to not discipline the Astros and Verlander without sending the message that “shall” isn’t mandatory and the CBA doesn’t mean what it says. But if that’s the case, the Joint Drug Prevention and Treatment Program, Joint Domestic Violence, Sexual Assault and Child Abuse Policy, and Joint Treatment Program for Alcohol-Related and Off-Field Violent Conduct don’t mean what they say either. The Astros violated the CBA in no less severe a way than a player does by taking a performance-enhancing drug.

MLB Players Are Banned From Venezuela

As you probably know, many MLB players take advantage of the warmer climes in Latin America to hone their skills in winter baseball. This winter, however, players in affiliated leagues won’t be permitted to do so. Per Jeff Passan,

Major League Baseball has banned all affiliated players from participating in the Venezuela winter league this season, a response intended to comply with President Donald Trump’s embargo against the country’s Nicolas Maduro-led government.

The embargo is because the Venezuelan winter league is linked with the country’s government.

President Donald Trump signed an executive order freezing all assets from the government of President Nicolás Maduro and prohibiting transactions with it, unless specifically exempted. Venezuela’s baseball league, known as Liga Venezolana de Béisbol Profesional in Spanish, is heavily sponsored by Petróleos de Venezuela SA, the state-owned oil company.

Venezuela is now the second country with significant baseball ties that the Trump administration has severed or weakened; earlier this year, the administration scuttled a posting deal with Cuba that would have ended the trafficking of Cuban defectors seeking to play professional baseball.

But while the fallout of the embargo is significant from an international relations perspective, it also could alienate the relationship between MLB and Venezuela, with worries that the Venezuelan government would retaliate by barring teams from signing Venezuelan players.

Also notable is the financial fallout on minor leaguers; as Passan noted, “[d]ozens of affiliated players either return home to Venezuela or travel there annually to play winter ball, as many supplement paltry minor league incomes with low- to mid-five-figure sums to play in a 63-game season.” And Venezuelans returning home for the off-season won’t be allowed to play in the Venezuelan winter league either.

The effects on baseball are a very, very small part of the calculus a president uses when carrying out foreign policy. That said, it’s hard to argue that the Venezuela embargo is anything except very, very bad for Major League Baseball.

Correction: An earlier version of this story gave an incorrect name for The Detroit Free Press reporter. This has been corrected.