Mike Elias, ex-Luhnow acolyte, under investigation for O’s pension fraud

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Mike Elias might not have worked directly for efficiency-obsessed McKinsey, but his former boss and former general manager of the Astros, McKinseyite Jeff Luhnow, certainly rubbed off on him. You can see it in the way Elias runs the Orioles, trimming costs wherever possible, and, apparently, when it comes to breaking rules.

Luhnow is casting blame for the Astros’ sign-stealing on the people who used to work for him, people like Elias, and while that might be true, Luhnow was certainly involved, too, regardless of how much he says he was not during lengthy interviews.

Sign-stealing isn’t the topic of the day when it comes to Elias, though, even if Luhnow is hoping to clear his name by vaguely squealing on everyone who was in on the plan with him. No, the Orioles’ general manager potentially found a different rule to break. According to the New York Daily News, Elias is being investigated by MLB for pension fraud:

The Orioles pension scandal centers on Elias’ decision to give [Chris] Holt benefits for which he was likely ineligible. Under the joint agreement between the MLB owners and the Players Association, only four coaches can be designated by the clubs for the pension plan, as well as the licensing money. Earlier this year, it was learned that Elias had designated Holt as one of the Orioles coaches to be placed on the plan, even though Holt is not listed as a coach for the Orioles, wasn’t with the team all year and was not even given a uniform number. He reportedly spent much of his time working in their minor league complex in Bowie, Md.

In addition to earning a year on the MLB pension plan, which includes lucrative medical benefits and life insurance, Holt would also be entitled to a players’ licensing check from the sale of paraphernalia and merchandise (mostly online this year) and baseball cards. Those checks average annually between $40,000-$60,000, and are normally distributed to the players and coaches in spring training every year.

To get you in the right kind of outrage mindset here, it’s important that you recognize that not every coach can be on the pension plan and receive the benefits and licensing money granted by it. Just four coaches per team are eligible, and there are more than four coaches on a big-league squad. The O’s, for example, have a manager and eight coaches: a Field Coordinator/Catching Instructor, a Hitting Coach, a Pitching Coach, an Assistant Hitting Coach, a Bullpen Coach, a First Base Coach, a Third Base Coach, and then one more position, plain old Coach.

Chris Holt, Not A Coach, took money away from one of five potential recipients who actually qualified for it. And he did so because Elias disregarded the qualification rules in order to give one of his guys he brought from the Astros special treatment, in the form of pension funds as well as up to $60,000 in licensing money.

There’s something particularly wrong about this when an organization’s leader is breaking the rules to distribute collectively bargained money to staff that aren’t eligible for it, and at the expense of someone who is eligible for it, to boot. Coaches aren’t paid like players, or even like managers. First base coaches, for instance, pull in around $100,000 per year — that licensing check is essentially a bonus that boosts their annual salary by half, and at $100,000 per year, those pension funds are even more necessary for their futures. Coaches, like players, don’t have a lifetime gig in the sport, and are just as likely to not have a post-baseball plan in place should their services no longer be needed. These guys aren’t all coaching into their 70s and 80s, you know. That pension is a necessary retirement fund, not just an earned one, when you’re talking about coaches that spent most of their time in pro ball in that role, whether because their playing career flamed out before they could make the real money in the sport, or if they never even got to the bigs as a player and instead transitioned right from the minors to an instructional role.

Did Elias not know the rules? It hardly matters, just like it doesn’t actually make Luhnow look better if he somehow didn’t know about all of the cheating happening under him. Elias either committed fraud through incompetence, costing one of the Orioles’ coaches a significant amount of money in the process, or he committed fraud on purpose, with the same end result, except now you can envision he twirled his mustache before committing to it. Well, the same end result for the coaching staff, anyway: the Daily News did report that Elias is going to be in a lot of trouble if it turns out he did this on purpose.

“Assuming this is found to be fact,” the lawyer said, “we’re talking about people being engaged in pension fraud here, something that affects not just the coaches who potentially got screwed but all the baseball retirees. There is certainly going to have to be retribution and, I would think, significant discipline.”

The players fought hard for their pension before the MLB Players Association as we know it today had formed, and a battle over the pension is what initiated the first-ever strike in MLB and in pro sports. The pension fund ended up benefitting former players, too, and I have a hard time, like the lawyer the Daily News spoke to, thinking that the pension board is going to take this lightly. And they shouldn’t: Elias should be punished in some way even if there is no proof this was intentional, as a reminder to read all the necessary paperwork next time so as to avoid costing a coach one-third of the money they thought they might be getting, and if he did it on purpose? Well, a severe punishment there wouldn’t exactly break my heart, either, given what we know of the central figures of the Astros’ front office the last few years. Get all of these guys out of MLB. They certainly keep giving you reasons to.

  • My latest for Baseball Prospectus: Senne v. MLB has the potential to impact the lives of not just the players from the past who are suing, but present-day and future minor-league players, too.

  • Evan Drellich wrote about MLB’s reaction to financial losses in a pandemic-shortened season, i.e., laying off everyone in sight rather than the owners absorbing any of the risk they supposedly took on by investing money in a team. I’m pretty sure you’ll hear more about this from me soon.

  • I’ve got not one but two Natalie Weiner features to share with you today: first, she co-wrote about how sports’ most socially progressive league, the WNBA, got that way.

  • Next, Weiner wrote about high school volleyball as the grim specter of the coronavirus pandemic. You might not care about volleyball, for whatever reason, but there is a reason to care about it in this context if no other.

  • Listening to Chris Jericho talk about the differences between his former employer, WWE, and his current employer, AEW… well, they aren’t as different on labor issues as he would like you to think, as Sean Rueter pointed out. (WWE is, of course, worse. They are almost always worse.)

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