Mar

15

Word of the Day: Peloteros


Posted by at 6:04 pm on March 15, 2017
Category: BaseballCuba SanctionsOFAC

Cuba Baseball Stamp [Fair Use]It’s time for our annual Cuba baseball post which each year has been motivated by cold weather, spring training, and anxious anticipation of opening day. And what better subject for this post than the recently concluded trial in Miami in which Bartolo Hernandez, a baseball agent, and Julio Estrada, a baseball trainer, were accused of smuggling Cuban players into the United States and which featured testimony by one of these peleteros about how he ate his fake Haitian passport on his plane trip to the United States. (Insert optional better-than-airline-food joke here.)

One of the key elements of the case is section 515.505 of the Cuban Assets Control Regulation which unblocks Cuban nationals after they have established residency in a country outside Cuba other than the United States. The other element is that an unblocked Cuban in a third country is, under Major League Baseball’s rules, a “free agent” that can negotiate higher salaries; Cubans who come directly to the United States and become unblocked by seeking permanent residence here are eligible to be signed to an MLB team only through the amateur draft system and will not be able to command the astronomical salaries of a free agent.

According to prosecutors, the defendants smuggled the Cubans into third countries and then forged documents that could be used to evidence residency in those countries. The payoff to the defendants was the high commissions (allegedly around $150 million) that they received on the salaries of their free agent clients. The defense claimed that the two defendants did not forge documents and were unaware that the players, desperate to get to the United States, were using forged documents. The jury, however, convicted both men earlier today.

In other baseball news, opening day for the Chicago Cubs is Sunday, April 2, in St. Louis, a town that even the Rams had the good sense to escape.  Go Cubs Go!

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Copyright © 2017 Clif Burns. All Rights Reserved.
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One Comment:


As someone who majored in economics, the MLB rules strike me as a perfect example of a perverse incentive by making a financial benefit dependent on place of residence. Since agents generally earn a percentage of negotiated salary, the agent has an incentive to make sure the player is not a US resident.

As a Phillies fan, I’m just hoping for a .500 season. There’s some good talent on the farm, but a lot of them aren’t ready to come up yet, and the offense is likely to be sub-par again this year.

Comment by SK on March 16th, 2017 @ 8:47 am

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