On January 13, 2020, Major League Baseball (MLB) announced the findings of an investigation into allegations that the Houston Astros had engaged in sign stealing during the 2017 and 2018 seasons. The investigation determined that the Astros used various methods (from center field cameras and video monitors in the dugout to banging on a trash can) to decode the signs a catcher signaled to the pitcher to determine what pitch would be thrown.
The Astros received one of the stiffest punishments in the history of the MLB – the team was fined $5 million (the maximum fine allowed), lost its first and second round draft picks in 2020 and 2021, and General Manager Jeff Luhnow and Field Manager AJ Hinch were suspended from baseball for one year. An hour after MLB’s announcement of the findings and punishments, the Astros fired both Lunhow and Hinch.
Although Luhnow denied knowledge of the schemes to decode and transmit stolen signs (and the investigation found no evidence that he was aware), he was punished and ultimately fired because MLB held him “personally accountable for the conduct of his Club. It is the job of the General Manager to be aware of the activities of his staff and players, and to ensure that those activities comport with both standards of conduct set by Club ownership and MLB rules.” MLB found that Luhnow oversaw an operation that “valued and rewarded results over other considerations,” which led to an environment that allowed the sign stealing to occur.
MLB further determined that Hinch did not design the scheme or participate in it. The report states that he actually believed the conduct was wrong, distracting, and that he physically damaged the video monitor being used by the players. Nevertheless, he admits he did not stop it or even notify the players that he disapproved. MLB determined that as “the person with responsibility for managing his players and coaches, there is simply no justification for Hinch’s failure to act.”
This episode underscores that integrity in any organization starts with the tone at the top. There is simply no substitute for senior leadership’s commitment to promoting high standards of integrity, communicating those standards, and upholding them throughout the organization. The Astros are a case study in how that tone at the top failed and suffered serious repercussions of that failure.
Heather Hatfield represents clients in corporate investigations, white-collar crime investigations and defense involving the Foreign Corrupt Practices Act (FCPA), complex contract disputes, oil and gas litigation ...
Blake Runions assists clients with broad range of business disputes and investigatory matters, including partnership disputes, internal investigations, and commercial litigation.
Prior to joining the Firm, Blake worked in the ...
Jamie Godsey represents public and private corporations, partnerships, and small companies on a broad range of complex business and commercial litigation. Her experience includes a wide variety of matters such as contractual ...
- Transparency International’s 2020 Corruption Perceptions Index Indicates Corruption is Affecting COVID-19 Response
- Expected Enforcement Trends under the Biden Administration
- FCPA: 2020 Year-In-Review
- Goldman Sachs Reaches Record $2.9 Billion Settlement of Malaysia FCPA Violations
- Recent Advisory Opinion Provides Important Guidance to Mitigate Sanctions Risk
- DOJ Releases Rare FCPA Opinion Procedure
- Essentra Settlement Demonstrates Government Commitment to Compliance Framework
- DOJ Updates Corporate Compliance Evaluation Guidance
- Political Retribution in Bridgegate Cannot Sustain Federal Fraud Convictions in Kelly v. United States
- Key Considerations in the Timing of FCPA Violation Disclosures
- March 2021
- February 2021
- January 2021
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019