With more gambling cases likely, Ohtani debacle is a lesson to MLB

Shohei Ohtani’s former interpreter has pleaded guilty to stealing millions from him to feed a sports gambling habit. The man who took Ippei Mizuhara’s bets entered a guilty plea to running an illegal bookmaking operation.

Major League Baseball has closed its investigation into the matter. And the Dodgers are delighted that Ohtani is putting up Hall of Fame numbers at the plate.

But the federal criminal probe that targeted Mizuhara and Mathew Bowyer, his Orange County-based bookmaker — and cleared Ohtani of any wrongdoing — is ongoing, even as MLB has been forced to deal with more forbidden gambling.

In Bowyer’s plea agreement, prosecutors allege that two current or former ballplayers placed bets with him. In the meantime, MLB banned another player for life and suspended four others after finding they bet on baseball, an offense that has been considered a mortal threat to the game since the Black Sox scandal of 1919.

The league is likely to face more allegations of illicit betting by players, especially since the sport’s partnerships with legal gambling enterprises have sent conflicting signals about its disdain for wagering. MLB insiders and experts on sports ethics say the handling of the Mizuhura affair is a case study in how not to deal with such a challenge. They describe the episode as a public relations fiasco that at one point had tied Ohtani himself — falsely, prosecutors say — to payments made in the bookmaking underworld.

Both the Dodgers and MLB have remained mostly silent about their actions during the days before The Times broke the story about Ohtani’s name surfacing in the federal probe and the theft allegations against Mizuhara. In a statement to the paper earlier this month , league spokesman Glen Caplin said, “Just like in other cases, MLB immediately began its due diligence upon learning of allegations from the news media.” Caplin declined to provide any specifics.

After The Times began inquiring about the investigation in March, the Dodgers and MLB left it to Ohtani’s agent and a New York-based crisis public relations manager to deal with the newspaper’s questions and similar queries later by ESPN.

ESPN reported that an unnamed spokesman for Ohtani offered up Mizuhara for an interview — and the interpreter told ESPN that the ballplayer had paid Mizuhura’s gambling debts to an illegal bookmaker. MLB prohibits players and other employees from betting on any sport with an illegal bookmaker. The rule does not specifically address paying the debts of others from unlawful wagering.

In the end, and with little time to spare as ESPN prepared to publish the interpreter’s claim, Ohtani had to head off a punishing blow to his image and reputation by privately questioning Mizuhura, who then confessed that he had covered the debts by stealing from the Japanese slugger.

Several sports communications experts told The Times that MLB and the Dodgers should have tried to keep Ohtani out of such a precarious position. That viewpoint was underscored by Mizuhara’s guilty plea in federal court in June — an admission that he siphoned off nearly $17 million in bank account transfers from Ohtani. But the plea didn’t stop unfounded speculation on social media and elsewhere over whether fans have been told the full story.

By failing to take the lead in responding to queries from The Times and ESPN, before the Mizuhara allegations burst into public view, MLB and the Dodgers did damage to the institution of baseball and the fans who revere it, the insiders and experts say.

“It’s bad for baseball,” said Maurice Schweitzer, a professor at the Wharton School of the University of Pennsylvania whose specialties include effective decision making. ”It’s bad for the Dodgers. It’s certainly not helpful for Ohtani.”

Shawn Klein, an Arizona State University professor whose work focuses largely on sports ethics, said: “I could understand why the Dodgers would be shaking in their boots. They were probably really nervous that something bigger was going to explode on them.”

“But transparency, honesty and being up front is the right thing to do,” he said. “Otherwise, you look like you’re hiding something. And from a moral perspective, it looks like you’re breaking faith with your fans.”

To Klein and others, the way the Mizuhara drama was handled reflects a longstanding pattern of teams taking a passive approach to such player troubles: Franchises typically either defer to MLB or allow the players’ union or personal representatives to address media queries about bad news. That is particularly so when the player is a superstar on the order of Ohtani, the biggest name in baseball, who had left the Angels and been signed by the Dodgers to a record $700 million, 10-year contract in December.

The Times received a tip in mid-March about Ohtani’s connection to the federal investigation. After the paper began asking questions, Ohtani’s agent, Nez Balelo of Creative Artists Agency, told Dodgers executives that his camp would field the inquiries, according to two sources who requested anonymity because they’re not authorized to speak publicly. The Dodgers already had been consulting with Balelo and Mizuhara for PR-related situations regarding Ohtani, the sources said. It’s unclear if or when Balelo informed the Dodgers that he had enlisted the New York-based PR manager Matthew Hiltzik to respond to The Times.

The news of Ohtani’s potential involvement in the probe caught MLB by surprise. One league representative expressed shock in the form of an expletive after learning of The Times’ reporting on the federal inquiry and Ohtani.

The league had encountered Balelo and Hiltzik in tough times before. They represented Ryan Braun when the Milwaukee Brewers outfielder was fighting allegations of testing positive for a prohibited level of testosterone in 2011. Braun appealed the finding and suggested that the man who collected the testing specimen might have mishandled it. He won the appeal and publicly thanked Balelo and Hiltzik for their support.

Later, however, Braun’s name appeared in the records of a clinic that dispensed performance-enhancing drugs and the player admitted to a “huge mistake” in using a “banned substance.” He apologized to the specimen collector and accepted a lengthy suspension.

With Balelo and Hiltzik in charge that week in March, the ESPN story on Mizuhara’s assertion that Ohtani paid the gambling debts began to take shape, ESPN reported. Mizuhara, a Dodgers employee, gave that account in an ESPN interview that the anonymous spokesman arranged, according to the outlet. And then the Dodgers called a clubhouse meeting during which Mizuhara gave the same version of events to the players and staff.

Afterward, Ohtani said he felt uncomfortable with what he understood of Mizuhara’s remarks in the clubhouse and, in a meeting later that day at the team hotel, the interpreter admitted to him that he stole the money, according to court filings and the ballplayer’s statements.

The fast-moving federal prosecution of Mizuhara has gone a long way to defuse suspicions that Ohtani might have known more about the interpreter’s associations with illegal bookmakers than what had been revealed. But there has been no public explanation for why those around Ohtani did not do more to protect him from the unverified story.

Scott Boras, the sports mega-agent who sought to represent Ohtani before the player signed with CAA, said once Ohtani’s representatives knew that Mizhuara had admitted to gambling illegally, he should not have been the source of any story about Ohtani, let alone a negative one that was uncorroborated.

“I would have never allowed the interpreter go to the press,” Boras said. “Why would I trust anything he says? I would have had him arrested on the spot.”

Steven Fink, a long-time communications specialist who has written several books on the topic, agreed that feeding the story to ESPN made no sense. “You don’t go public unless you’re sure of the facts,” said Fink, who is based in Southern California but has worked on PR campaigns around the world, including for the Soviet Union’s response to the 1986 Chernobyl nuclear reactor meltdown.

“I don’t know of anyone who would go public with a story unless they verified it was true,” he said.

Hiltzik declined to be interviewed or to otherwise comment. Balelo did not respond to requests for an interview or comment.

The Dodgers and MLB also declined to be interviewed or to answer written questions from The Times about why they deferred to Balelo and Hiltzik and whether they knew of Mizuhara’s original account to ESPN before he disavowed it.

The Times first contacted Balelo on March 15 while the Dodgers were in Seoul, where the team was playing its season-opening series against the San Diego Padres. Balelo did not reply to a phone message or a subsequent email, but Hiltzik did on the agent’s behalf. The Dodgers were not consulted about bringing in Hiltzik, according to the two sources with knowledge of the team’s actions.

The Dodgers should have taken command at that point, including by going directly to Ohtani, said Don Heider, executive director of the Markkula Center for Applied Ethics at Santa Clara University, where his areas of concentration include leadership and communications.

He acknowledged that if the team did quiz Ohtani, they might have been misled by Mizuhara’s untruthfulness. But the Dodgers should have used other Japanese speakers on the staff — and kept fans in the loop by issuing a statement, Heider added.

“Apparently, nobody was asking any hard questions,” he said.

For several days, Hiltzik provided no answers to the questions The Times put to him, and he eventually said Ohtani had no comment.

On March 20, after the Dodgers beat the Padres in the season opener, team co-owner Mark Walter and other executives alerted players at the clubhouse meeting of an imminent story about Mizuhara and his gambling debts. Mizuhara then told the gathering that Ohtani had paid off the bookmaker for him. Ohtani was at the meeting, but no one translated Mizuhara’s remarks for him.

The mood in the clubhouse shifted from celebratory over the victory on the field to a seriousness bordering on somber, according to several people present at the meeting. As the executives spoke, some players were in the middle of changing and others emerged from the showers in towels, surprised to encounter such an awkward scene.

Like Ohtani’s outside advisers, the Dodgers apparently took Mizuhara’s word about Ohtani — the claim that he funneled millions of dollars to an illegal bookmaker. The team did not immediately remove Mizuhara from the clubhouse or the payroll; he interpreted for Ohtani shortly after the meeting when reporters asked the player about the game.

MLB policy bars nonplayers like Mizuhara, who was a Dodgers employee, from betting on baseball or gambling illegally. One section states: “Any player, umpire, or Club or League official or employee who places bets with illegal book makers, or agents for illegal book makers, shall be subject to such penalty as the Commissioner deems appropriate in light of the facts and circumstances of the conduct.”

The abruptness of the reversal in Mizuhara’s account — that he stole from Ohtani — raised doubts about his new story at the time, some of which have lingered, the experts say.

“Mixed messages just create more fodder and more intrigue,” said Schweitzer, the Wharton School professor. “You’re letting social media and talking heads tell the story.”

Mizuhara and Bowyer are awaiting sentencing in federal court.

Times staff writers Jack Harris and Dylan Hernandez contributed to this report.