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Cardinals Pay the Price for Non-Compliance

February 13, 2017

 

Earlier last year the Compliance and Ethics Blog posted a piece I’d written entitled, “Yet Another Scandal in Sports.” This piece reported on Chris Correa, a former scouting director of the St. Louis Cardinals, who had pleaded guilty to charges in connection with the hacking of the database of the Cardinals’ rival, the Houston Astros. Then later in the year, the Blog posted another piece entitled, “Former Sports Executive Gets Prison Sentence,” which reported on Correa’s sentence of nearly four years in prison, along with a court order to pay $279,038 in restitution.

 

Now the other shoe has dropped, this one by Major League Baseball (MLB) on the St. Louis Cardinals’ Baseball Organization. In a decision issued recently by MLB Commissioner Rob Manfred, the Cardinals were fined $2 million in damages, the largest fine ever for a single team, and their first two picks in the coming draft have been taken away. The two draft picks and the $2 million fine will be paid to the Cardinals’ former division rivals. Manfred also announced that Correa was banned permanently from MLB. The Commissioner also ruled that the Cardinals benefited from Correa’s actions and that the Club, as a whole, was “liable for his misconduct.”

 

The Cardinals response was interesting. In a statement issued by the team, Cardinals’ chairman Bill DeWitt, Jr., said, “Commissioner Manfred’s findings are fully consistent with our own investigation’s conclusion that this activity was isolated to a single individual.” This brings back memory of former NBA Commissioner David Stern’s response to referee Tim Donaghy pleading guilty to two felony charges in connection with his betting on games he worked when he blamed a “rogue, isolated criminal.” Cardinals’ general manager John Mozeliak said “We have learned a great deal along the way and we have taken additional steps to ensure that something like this doesn’t ever happen again.” While it’s not exactly clear what Mozeliak meant by “we have taken additional steps…,” it does not appear that any move to establish a formal effective integrity and compliance program within the Cardinals’ organization is among them.

 

Leaders in industries and business sectors where compliance programs are common, along with compliance experts, are in agreement that the best way for almost any organization to ensure compliance with laws and regulations, its own business standards, and prevent general wrongdoing is to establish an effective compliance and ethics program in conformance with the United States Sentencing Commission Guidelines for Organizations. Since 1992, when these Guidelines were established, organizations in virtually every sector of the US economy, including colleges and universities, have established compliance programs, also known as ethics, or integrity programs.

 

The question that remains unanswered is, “When will sports organizations follow the lead of so many others and establish effective integrity and compliance programs?”

 

 

 

 

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