American businessman Mark Walter, owner of the Los Angeles Dodgers, is at the center of a new controversy after a news report alleged he made hidden agreements with his business partner Earvin "Magic" Johnson following the purchase of the Major League Baseball franchise.
The claim was presented on Friday during an episode of the program Pablo Torre Finds Out.
According to the report, Walter allegedly made hidden agreements connected to the 2015 sale of the insurance company EquiTrust to Johnson for $350 million, a deal that helped turn the former Los Angeles Lakers star into a billionaire.
Alleged compensation for Dodgers bid
Sources cited by Torre said the transaction amounted to a form of compensation for the help Johnson gave the Walter-led group in winning the bidding war for the Dodgers in 2012.
Johnson used his popularity and influence at the time to back the group's offer, which ultimately secured the storied Los Angeles franchise. The Dodgers have since won the last two World Series titles.
The report also claims Walter is the subject of an FBI investigation related to affiliated investments allegedly not disclosed by some of his companies, a situation that could expose him to accusations of tax fraud.
Walter denies wrongdoing
Walter has previously denied any irregularities. Through his company TWG Global, he said last month that the acquisition of the Dodgers complied with all Major League Baseball rules and regulations, and said an independent investigation carried out by an outside law firm found no irregularities in the deal.
Beyond the Dodgers, Walter holds stakes in a holding company that controls Chelsea of the English Premier League, French club Strasbourg, the Cadillac Formula 1 team, a professional women's ice hockey league, and the Los Angeles Sparks of the WNBA.
Torre's on-air claims
Torre laid out his findings during an appearance on the MSNOW program Money Power Politics, where he described Walter as, in his words, a stimulus in himself for billionaire owners of sports teams, and said Magic Johnson is one of the key figures in the whole matter.
Torre said Mark Walter, his business partner, sold him one of these insurance companies, and that this made him a billionaire in the process.
He said the two men together managed to buy and finance the Dodgers by effectively applying the law of transitivity through borrowed money, drawing on the savings of American parents and grandparents who had no idea this was happening.
Torre said this would be fine if disclosed as a related-party transaction, but argued that if the United States is a country where the rule of law matters, it needs to be reported. He said the parties should disclose the information and tell the truth, because it is not only their own money at stake but money borrowed at the public's expense.
Precedent with the Clippers
A year ago, Torre alleged that the Los Angeles Clippers and their owner, Steve Ballmer, had circumvented NBA salary cap rules through business agreements linked to forward Kawhi Leonard.
That investigation led this week to one of the harshest penalties ever imposed by the league: a $30 million fine, the loss of five future first-round draft picks, and a one-year suspension for Ballmer.
The Clippers have announced they will challenge the sanctions, a dispute expected to lead to legal action against the NBA.
