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alianoralacanta · 1 month

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WMSC Analysis (28-07-2007)

Context: This is my first incomplete post that I plan to put in this La Canta Magnifico Blog archive. I am not sure why I only have the incomplete version, but hopefully this gives a little insight into the creation process. This post was for a critical point in the 2007 F1 season, namely the "Spygate" second ruling concerning McLaren's knowledge or lack of same of 780 pages of Ferrari information that somehow ended up at McLaren. This was the occasion for the $100 million fine McLaren received for the information spreading more than it initially knew, as well as being ejected from the 2007 Constructor's Championship. I don't have any blog posts in the saved archive covering the other events in the Spygate sequence directly, but if you don't know what this is talking about, I'm happy to fill you in. I generally write my blog entries in one piece. I start with an idea and a mental sketch of what I need to do to turn it into a post. Spelling, punctuation and grammar are checked as I go - my standard typing speed incorporates all this because I have a lot of practise at typing, thinking and checking simultaneously. As I finish each paragraph, I check it with the previous paragraphs, because I have a bad habit of introducing ideas in an awkward sequence otherwise. I then look back again at the end of each section, to ensure the plan itself still works. For more complex post plans, I commonly find myself adding new sections at this point. At the end, I do one more structure check, followed by a final proofreading pass. This incomplete blog suffers quite a bit from spelling issues in particular; I have made no effort to correct these, except for occasions where the meaning of the sentence changed. I almost never wait after finishing a post to post it; the La Canta Magnifico Blog archive series is the only exception… apart from this post's original appearance. I'd been checking for the transcripts during the development of the post, since these had been promised. I was about to post when the transcripts showed up, so I felt it best to add comments about those in the same post. It is unclear that some of the legal points mentioned here would hold in any judiciary function, be that a court, the FIA or anywhere else. Finally, WMSC means World Motor Sports Council. It was at the time the highest committee in the FIA for judicial matters that had never previously been judged. Stewards were not involved as the issue did not point to any specific race. Warning! Very long post alert!

Firstly, a legal disclaimer. I was intruiged, and not a little worried, when I heard that the FIA intended to publish its battery of evidence for its decision. In my previous post on McLaren/Ferrari, I pointed out that this was surely part of playing the case in public. This is in fact illegal, since there are other legal proceedings involving this case running at the moment. Any publication by the FIA could be considered prejudicial to those cases. Ironically, the FIA has noticed these cases (in point 1.8 of the full text), yet it has not absorbed the legal consequences.

The internal investigations to which the WMSC refers include McLaren's investigation into Mike Coughlan (currently suspended) and Ferrari's into Nigel Stepney (currently sacked). In theory, the case should remain open without any party needing to appeal. The judgement and the publication of the proceedings from which these quotes are derived amounts to a public trial of McLaren. This is against the law in most civilised countries. In fact, the law is such that the WMSC should not have judged McLaren at this point. McLaren could send the FIA through the civil courts for that alone, if it felt so inclined. The fact that the prejudgement is having serious negative consequences for McLaren, the FIA and Formula 1 obliges me and many other commentators to speak out. In my case, I am only quoting those parts necessary to make this post make sense.

Normally, there would be no problem with publication of evidence supporting a decision, and would in fact benefit those of us who wish to understand the sport better. Normally, the FIA does not provide that evidence. Wierd…

Unless otherwise stated, all quotes come from "WMSC Decision In Full", published by the FIA.

1.5 In response to the charge, McLaren made extensive written submissions in advance of the 26 July WMSC meeting and made detailed oral argument at the meeting itself. McLaren did not dispute that Coughlan had come into possession of Ferrari confidential information but argued, inter alia:

(i) that the Ferrari confidential information in question had not been circulated within McLaren;

(ii) that McLaren had neither used nor benefited from the receipt by Coughlan of the Ferrari confidential information; and

(iii) that the actions of Coughlan in receiving and dealing with the Ferrari confidential information were those of a "rogue employee" for which McLaren should not be held responsible.

These three points will need to be referred to extensively in the following argument. Normally, a court considering this sort of case would ask the company to pay the punishment and then the company relays the punishment (or an appropriate proportion thereof) to the perpetrator(s) among the staff, if sufficiently severe. The immensity of the punishment prevents this from occuring (can you seriously imagine Mike Coughlan paying a $100m fine?). Nonetheless, these three points are the reason the WMSC had to meet a second time.

2.3 All relevant parties (including McLaren and Ferrari) were informed of the new meeting and were given copies of the new evidence put before the WMSC (in some limited cases, after redaction of confidential information).

In other words, most of the information was publicly availabe. Strangely enough, the only "information" publically available were the widespread cases of mud-slinging which put me off writing about this case earlier in the summer. It was disgusting then, and now it just stinks. Using that as evidence would surely be irrational. Therefore, more of the case is based on confidential information than the FIA cares to admit.

2.5… In light of the strong imperative in the interests of the sport to issue a swift ruling, the following does not constitute an exhaustive list of the elements considered nor does it purport to be a summary of all of the evidence put before the WMSC.

This is a very important point. It means that the WMSC has, by necessity, interpreted its evidence in order to render swift justice. As pointed out in my disclaimer, this is quite a problem. In any case, interpretation is prone to biases at the best of times. When it's done quickly, errors creep in. That said, it is only possible to provide a definitive verdict on whether an interpretation is accurate if all the available evidence is presented. Therefore it would be unwise to assume that the WMSC is incorrect - but it would be equally unwise to treat the WMSC evidence base as if all the evidence leans one way. This is particularly the case since the swiftness of the case obliges weighting towards providing evidence in support of the ruling. Contra-indications would be expected to be short on the ground.

3.1 In the period after the 26 July Decision, the FIA was made aware of a specific allegation that e-mails relevant to the FIA's investigation had been exchanged between certain McLaren drivers.

I have noticed some people on the internet cast doubt over whether e-mails would be acceptable in a conventional court of law. They would be. In fact, e-mail evidence is key to a lot of cases nowadays, along with other new-fangled technologies such as text messages (which are important later on in this case, too). The key reason is that these can be written down and permanently recorded on paper. E-mails quite often are in business contexts, and with appropriate technology, so can texts. E-mails are particularly acceptable in law courts because they are easily printed in a way that retains all original formatting and records the day and time sent. They can be queried, even in printed form (since they are digital, there is always the possibility that an e-mail has been edited or even faked - though there are ways of testing for whether either has occurred). The other thing is that it is not normally possible to use e-mails as proof of certain forms of contract (such as employment contracts - these still have to be presented to the worker as a paper document and signed), but that won't trouble us here.

Suffice to say that in the absence of a reason to doubt the e-mails, they are valid evidence in civil and FIA courts alike.

3.3… Given the importance of establishing the facts and that the information might not come out any other way, the FIA offered the assurance that any information made available in response to the letter [to the three drivers] would not result in any proceedings against the drivers personally under the International Sporting Code or the Formula One Regulations.

This is why the drivers did not get punished. There are other types of cases where this sort of amnesty is offered, the best example being EU cartel law. The EU has a sliding scale of punishment discounts given to offenders according to the extent and timeliness of their assistance. In fact, the whistleblower is exempted completely from any punishment, while other members of the cartel may get up to 50% of the punishment removed if they assist fully and early enough. Naturally, those who stay silent and are convicted get the full punishment. It is used specifically to collect evidence that might otherwise be very difficult to obtain, and to set up a "race to confess". A brilliant example of how effective this can be was the Virgin Atlantic/British Airways cartel, which was broken by the former. The latter avoided some punishment because it assisted with the enquiries as soon as it knew the cartel had been exposed.

It may seem a deviation to mention this, but the FIA is apparently trying to do the same with the letters as the EU does with cartels. The difference is that instead of getting a "race to confess", its all-or-nothing policy gives those who do not confess early no incentive to confess at all. That said, the fact that this was only ever offered to the three drivers and to whoever originally brought this case to light. I add the last bit because the FIA has had a policy since 2003 that any individual bringing word of an occurence of cheating to the FIA would be entitled to anonymity, amnesty and a $1m bounty. I wonder who received the bounty, but by definition we are unlikely ever to find out.

There is also the point that other members of McLaren were not given this opportunity to confess and gain amnesty. This defeats the point of the amnesty rule, because it presumes that the other members of McLaren have nothing to offer that is worth amnesty. Equally strange is that McLaren's second tester, Gary Paffet, neither received a letter nor was asked to provide any other form of testimony. Unequal treatment of suspects is not acceptable behaviour. Add to this the word that Ron Dennis provided the evidence that triggered the second sitting of the WMSC and matters look even bleaker. If Ron confessed first and got the full heft of punishment, and the drivers who hung back got away without being punished, how is this justice? It's the reverse of the cartel law system, and would provide an incentive in future for everyone to clam up until the FIA is forced to pull out the big guns.

3.4…..Subsequently (at McLaren's request) both Mr. Alonso and Mr. de la Rosa made written statements to the WMSC verifying that these e-mails were sent and received and offering context and explanations regarding the e-mails.

This was the statement type I expected to see the moment I saw that the WMSC had used e-mail evidence. An e-mail that is not seen is very difficult to use as evidence in court. There is (anti-terror) law in the UK that obliges companies to keep business e-mails for at least two years. Since McLaren is in the UK, I would expect the staff of McLaren to produce e-mails on demand. Even if the McLaren drivers were legally only sub-contractors of McLaren, they would technically be self-employed and therefore bound by the same legislation.

I say "statement type" because it does not say that the e-mails themselves ever made it to the courtroom. They may have done and the WMSC may simply have decided to leave that evidence on the cutting-room floor, but there is a considerable legal difference between the court seeing the e-mails and only hearing about the e-mails. It is why phone conversations are not generally accepted in court on their own (as Eddie Jordan found out to his cost in 2003).

I have delayed this blog post because while I was analysing the original verdict, the transcripts turned up. I hope to do a reasonably sober analysis about what the transcripts tell us. I will discuss the parts I think are interesting in the order they appear in the document.

Please note that I am not really using the document to establish whether McLaren are innocent or guilty of the charges as presented; frankly I have my doubts as to whether even the WMSC were entitled to judge at this stage. And if they're not entitled, I'm certainly not! Instead, I'm curious about such things as how the WMSC meetings were conducted and the ethical and procedural implications of what happened in court.

July meeting: Preliminaries

First of all, I want to talk about what the WMSC transcripts reveal about how WMSC cases are conducted. It would appear that proxy voting is fairly common, since a quarter of those who could vote in July had sent proxy people. This makes sense because the WMSC members tend to have several other roles in motorsport.

I also like the fact that the WMSC has integrated multimedia links well into its meetings. Having been at meetings where the IT staff have been unable to connect even one person to a meeting, the ability of the WMSC to smoothly link up two people in different locations to the July meeting is very impressive.

McLaren seem to have been very concerned about confidentiality, to the point where they objected to the other teams being present for certain parts of the July meeting. Thankfully, the compromise which Ian Mill (McLaren's primary lawyer) offers to the court is sufficient to satisfy the WMSC. This is as well, since the whole matter of information confidentiality is at the centre of the incident to be discussed.

The second query is that the WMSC may not have had juristiction to charge McLaren. Usually, stewards or ASNs (the national organisers of motor racing) are the ones with the power to charge. Wierdly enough, the part that Max Mosely says the WMSC relies upon to charge McLaren is Article 27 of its own Statutes. This says that the WMSC may impose the sanctions provided for it in the International Sporting Code. I say wierd because this only justifies the September meeting, not the July one. It would have been better off using Ian Mill's suggestion that Article 16 (which states that the WMSC is charged with enforcing the International Sporting Code) is why the July meeting can be called. While the exchange proved the WMSC's legitimacy, it did not prove that they were particularly good at dealing with surprise queries.

Finally, the enumeration of evidence. The interesting point is not so much that McLaren sent their evidence out in pieces, but that Max immediately told Ian Mill that the final piece of evidence would not be permitted in court. Without knowing what was in the Ferrari Memorandum or the response, it is impossible to know whether a conventional court would have accepted this evidence. For that matter, if the evidence was in as irritable a tone as Max Mosely suggested, the documents would probably have been regarded in a fairly dim light even if they had been of a type that a conventional court would accept (courts generally prefer calm, collected reports and accounts).

In addition, Ron Dennis pointed out that some of the evidence never arrived at McLaren. That Mosely would say the documents had in a place providing evidence tends to suggest the documents were sent. Post office blunder or administration issue? We'll never know.

The "This is not a Court of Law" Statement

We now know that it was in response to the non-arrival of evidence at McLaren that Max made his statement about reopening proceedings if new evidence came to light.

I find the "This is not a Court of Law" sentence very interesting. It indicates that it does not supersede courts of law, and yet the pursuit of the case despite two courts of law looking at the same case seems… …contradictory.

There is also a very prophetic sentence, "it is much worse if such matters are unturned later, during the course of the proceedings or later". More evidence that the WMSC do not like surprises. Even though they must have known at that point that more evidence in one direction would turn up (there was and still is a pair of court cases pending, plus internal disciplinary procedures), they still felt it necessary to do the case now and punish the inevitable. This seems quite unfair to me - it would have been better to simply hold open the possibility of prosecution until such time as the extent of the problem was known.

McLaren's viewpoint

Traditionally, in courts of law, the prosecution goes first and the defense second. In that way, all the things the prosecution wants to include in their case can be defended against if appropriate. It is unusual that the defence is made to go first. Yet this is what happens.

The "whistle-blowing is endorsed in England" point is an important one, particularly for those not familiar with the English laws in that area. A "whistle-blower" cannot be discriminated against by their employer for bringing breaches of the law to the attention of the appropriate authority. In addition, certain protections apply during the court case to ensure that smear campaigns, for instance, are compensated for by the company upon a guilty verdict.

However, it must be noted that the authority has to be the appropriate one. Nigel Stepney could only have been protected by these rules if he'd reported it to the FIA directly. In fact, the FIA has a system for protecting "whistle-blowers". They're currently doing an ad hoc one with Fernando Alonso and Pedro de la Rosa, but more generally, a member of a team can confidentially tell the FIA about a rule breach by their own team and receive $1m upon a guilty verdict being reached. It is difficult to see why Nigel didn't take this option.

McLaren were technically correct not to reveal Nigel Stepney as the whistleblower, and Ian Mills' assertion on that score is correct. For all the tact involved in McLaren's chosen response (gently suggesting they were going to try components they did not intend to try), the problem is that they did not state their accusation clearly enough. An open accusation of cheating would have been clearer and more effective, and in all probability the FIA would never have suspected anything was amiss with the "whistle-blowing"… …they would have assumed that some clever paddock gossip had reached McLaren's ears or something. Since acquiring secrets is only illegal if the information was known to be another organisation's secret, the FIA would not have brought the events of Australia 2007 into the proceedings.

The first two actions taken as a result of the Australian GP are fine, but the firewall thing is strange. Surely everyone at a big company like McLaren already has a firewall? Surely it would have been simpler just to reconfigure the firewall. Or maybe McLaren's information security really was that lousy…

Ian Mills also brings Spyker into the discussion. It seems a bit strange, for Spyker (unlike McLaren) used its information in a straightforward challenge. As a result, it could hardly be charged with using the information to benefit itself in a performance sense. The charge of industrial espionage would still be theoretically possible, but depending on the exact path between the production of the diagram and that diagram's arrival at the FIA, it may well be that even that can be ducked under the "whistle-blower" rule. For instance, if someone from RBR came into Spyker's employ with the diagrams and then revealed them to Spyker, then technically it is the same as if the ex-RBR employee had simply sent them to the FIA, since the FIA classifies people according to their competitior (i.e team) rather than their individual status. However, it is unlikely that the Spyker-Red Bull-Super Aguri affair will ever be fully revealed.

Mosely's response to McLaren's viewpoint

It is clear that Mosely took a fairly dim view of Stepney's actions. Also that he misunderstood Ian Mills' explanation. How else could he have not heard at least some of the steps Ian Mills took to ensure that no repeat of the incident had occurred. (p8, July)

#f1 #lcmb #lcmb archive #spygate #fia #mclaren #so many aspects of this situation would never happen now #I would hope me producing something this badly spelled would be on that list

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