Saturday, December 22, 2018

Trump and Cuban Baseball

The trafficking of Cuban baseball players is a criminal, abusive, miserable, and degrading practice. Many in the Trump administration want it to stay that way. Major League Baseball negotiated an agreement with the Cuban government to regularize it.
Under the plan, the Cuban baseball federation would release players to M.L.B. in return for a percentage of their contracts, an approach similar to the posting system used by Japanese and South Korean teams. The purpose of the agreement is to end the human trafficking of Cuban players to the United States and Canada.
You should be able to see the problem. The Cuban government will start making a profit, paid directly from MLB.*
On Wednesday, a White House statement criticized baseball’s agreement with Cuba, saying the administration would continue to restrict Cuba’s ability to profit from American businesses.
I can't find the statement itself (which does not seem to be on the White House statement page) but this was to be expected. MLB's stance will be that it was negotiating the deal at the time the administration changed rules regarding Cuba, and that Trump grandfathered those existing relationships. Trump will be pressed hard, very hard, by his hardline advisers, not to mention Marco Rubio, who does not like it.

Trump has courted the Cuban hardliners, to the point of seeming to consider them part of the base. His first inclination will be to block this. Offhand I can't actually think of any reason he would let it go through. If he's distracted, maybe? Or perhaps a billionaire friend has his ear. Politically he has every reason to block it.

*On the ownership of Cuban teams and how it all fits with Trump-era restrictions, check out this really interesting post by a lawyer from last year.

One of the primary changes signaled by the presidential memorandum is its prohibition on any transactions with the Grupo de Administración Empresarial SA, or GAESA. Through this company, the military regime under Castro built an investment network that controls major aspects of the Cuban tourism industry, particularly hotels. 
This clearly restricts Cuba tourism and may also complicate the proposal made by MLB to the Office of Foreign Assets Control in the spring of 2016. MLB proposed lifting the ban on signing of Cuban players and paying compensation to a newly-created organization devoted to Cuban youth baseball development instead of to the government-owned Cuban teams themselves. 
The trouble is that GAESA has been described as “una especie de muñeca rusa” – a sort of Russian doll, each thing hiding something else inside that no one knows about. According to the Miami Herald, GAESA controls about 60 percent of the Cuban economy. With such an extended web of ownership involving GAESA in Cuba, it may be difficult to verify that GAESA holds no ownership interest in whatever entity MLB proposes to pay in exchange for Cuban ballplayers. Without such assurances, OFAC is highly unlikely to entertain MLB’s proposal.
Update (12/29/18): yep, the administration intends to nix the deal.

The administration did not respond to specific questions about plans to scuttle the deal, but officials have been clear they feel the agreement would “institutionalize a system by which a Cuban body garnishes the wages of hard-working athletes who simply seek to live and compete in a free society.” 
“Parties seeking to benefit from business opportunities in Cuba are on notice that the administration will continue to take actions to support human rights and restrict the Cuban regime’s ability to profit from U.S. business,” a senior administration official said.
MLB claimed it had been talking to supportive officials in the White House and State Department. Are they clueless? The State Department doesn't matter and the only people that matter in the White House are the hard-liners, who are the line to the base. This is not a situation where Jared Kushner will step in and solve the problem.


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