The Spy Gate Scandal: McLaren’s 100 Million Dollar Penalty

McLaren Formula One Team (2007)

Let’s say you are living in Surrey County in England, you are a lifelong Ferrari fan, you work at a local copy shop when a woman comes in asking you to make a copy of 780 pages. So, you take it in the back to inspect the pages, you start to notice that there’s a Ferrari emblem in the bottom corner. Why would someone have official documents from Ferrari as you complete the transaction you ask the woman for her name?

 Once she leaves, you Google her name (Trudy Coughlin). You discover that she is married to Mike Coughlin, who is Mclaren’s chief designer, and that’s when the alarm bells go off, because you are in Surrey, home of the Mclaren team. So, as you are a Ferrari fan, you do the only sensible thing you can do; you Google the highest ranking person in Ferrari and email them. That’s what you do; you contact the at the time sporting director Stefano Dominecalli, so once Dominecalli receives the email he begins an investigation. This is how one of the greatest spy scandals in F1’s history came to light, all because of one loyal Ferrari fan, with controversies on and off the track, with Mclaren losing its credibility and suffering the worst fine in the sport's history.

But in order to understand the whole story, we have to start at the Ferrari Golden years and focus on one particular person Nigel Stepney. Stepney was in charge of the mechanics in Ferrari, he was an important piece of the puzzle in the dream team of Ferrari, some of the names in this team include Schumacher, Todt and Brawn. One of the most interesting facts about Stepney, is that he was the right hand man of Ross Brawn and as Ferrari dominated from 1999 to 2004, his position inside the team was really strong, but all things come to an end.

 In 2006 Schumacher retired and Brawn took a sabbatical from F1 (later returning with Honda), but he tried to get the role of technical director, not understanding that he wasn’t qualified for it, as he didn’t even have a college degree and with no formal education, it would be naive of Ferrari to put a mechanic in such a crucial position. So the role went to Mario Almando with Stepney becoming furious. This is the main reason for Stepney doing what he did, as he couldn’t accept that he wasn’t qualified for such a position, so in February of 2007 he gave an interview in Autorsport saying the following;

 “I’m not currently happy within the team, I really want to move forward with my career and that’s something that’s not happening right now. Ideally I’d like to move into a new environment here at Ferrari, but if an opportunity arose with another team, I would definitely consider it.’’

 As we all know, Ferrari doesn’t take it kindly, when someone criticizes them, especially when they are not drivers, so they announced that Stepney would remain at the factory for the 2007 season and would not travel with the team.

Now we fast forward to the week prior to the Monaco Grand Prix, with one of the mechanics finding powder outside of one of the cars. Naturally, the team called the police to investigate, the police searched everyone and found Stepney with powder in his pockets. After they had analyzed it they concluded that the powder found in Stepney’s pocket was the same as the one in the cars. Ferrari decided, after conducting an investigation, to lodge a complaint against Stepney in the Italian courts in the week of the USA Grand Prix. It only took two weeks for the investigations to conclude with Nigel Stepney being fired by Ferrari on July 3^rd , just after the French Grand Prix, with Ferrari announcing that it was starting an investigation with “an engineer of the Vodafone Mclaren Mercedes F1team” , with Autosport revealing that the engineer in question, was Coughlin. Ferrari announced that their investigation and the search warrant they had issued produced “a positive outcome”.

A week later, Ferrari announced its investigation to Coughlin, a High Court hearing was initiated on July 10^th , with the court announcing, that they were going to give Coughlin a day to go on record and give an affidavit about the events. On the same day that the courts ordered the affidavit, the email from the employee at the photocopy shop that Trudy Coughlin visited was received, now Ferrari could connect the dots and could connect the leaked documents to Coughlin so, the situation was escalated with another search warrant being initiated, with both parties coming to the agreement that the Coughlins would 100% cooperate now. In the future Ferrari in exchange, drops the High Court case and handles it internally.

The decision to drop the case didn’t mean that this is over.There is still a lot more of things to be uncovered. A week later Mclaren announced that their own internal investigation had  revealed the information that was taken from Stepney to Coughlin didn’t reach anyone else in the Mclaren factory. On July 26^th Mclaren was brought before the World Motorsport Council to answer for the charges; Mclaren was open throughout the process, providing to the FIA and Ferrari the blueprints of their car, trying to prove that the information taken wasn’t used in the design of the Mclaren car.

The FIA, because it couldn’t tie that any of the information was used on the car itself, they decided not to punish Mclaren, Ferrari was livid as Mclaren wasn’t punished, despite being found in breach of article 151 of the sporting code, the only thing that was some form of consolation, was that the FIA left the door open for new hearings, should new evidence come to light. While all this was happening there was a season going on with the next round being Hungary, but before going there Ron Dennis (Mclaren Team Principal), accused Ferrari to the Italian Motor-sport Authority of cheating to win the 2007 Australian Grand Prix, with Dennis source being the beacon of morality Nigel Stepney and that wasn’t the only major controversy of the weekend.

In the qualifying of the Hungarian Grand Prix, Hamilton and Alonso were trading top times, when it came time for the final run of Q3 with about 2 minutes left, all the drivers came into the pits to get fresh tires, the Mclarens were stacked with the pit crew, after giving him new tires, deciding to hold Alonso for 20 extra seconds to give him clear air, despite all the stewards later contradicting, that fact by stating that the track was clear of any cars. But after this pause Alonso stayed in his box for about 10 more seconds, ensuring that Hamilton didn’t get to set a new lap, while Alonso went on to have a great lap claiming pole. Ron Dennis, while frustrated, confirmed that Hamilton had disobeyed a team order by not letting Alonso through earlier in the session, the FIA gave a 5 place grid penalty to Alonso for delaying Hamilton and Mclaren would be deducted 1 championship point from whatever they took from that race. But, the controversy doesn’t end there; on the morning of the race Alonso has a meeting with Dennis, where he threatens the Mclaren boss, by stating that he would reveal to the FIA the conversations they had with Coughlin about the car and the information about Ferrari. In a panic Dennis goes to Max Mosley (FIA president) revealing the conversation with Alonso, stating that it was just an empty threat, with Dennis attempting to damage control the situation, but it backfires, while Alonso doesn’t go, thought with the threat the FIA is now paying closer attention.

One month later new evidence come to light, these are messages between Alonso, Coughlin and Pedro De La Rosa (Mclaren’s reserve driver), with those evidence being sent to Bernie Eccelstone (F1 commercial rights holder until 2016), who then sent them to the FIA.   The FIA opened a new investigation on September 13^th , but this time they had all the necessary evidence; the evidence included 288 texts, 35 phone calls being directly from Coughlin and Stepney. On top of that the FIA had emails from the drivers, that were basically incriminating themselves and Mclaren, for having and using the stolen Ferrari information, while, at the same time, lying to the FIA and claiming that they hadn’t used them.

So now the FIA with all the information they could come to a decision; their verdict was that Mclaren was obviously in breach of article 151 and now Mclaren had to pay a 100 million dollar fine, which still holds the record as the biggest fine in F1 history and probably in all of sports, while, also, Mclaren was excluded from that years championship, but the intersting part was that Alonso and Hamilton weren’t excluded from the driver’s championship. After some persuasion from Bernie Eccelstone to keep that years championship battle alive and the fact that before the September 13^th hearing, Max Mosley gave the drivers one last chance to submit any mew evidence with Alonso and De La Rosa giving up the conversations they were having, while Hamilton stated he had nothing more to add and Alonso didn’t show up to the hearing itself, while De La Rosa and Hamilton did.

In terms of the championship Ferrari had the last laugh, as the Mclaren duo fumbled the championship with Kimi managing to win it, despite being 10 points back from Hamilton. What’s really interesting about this story, is it reminds us how ugly the sport can truly be sometimes. Mike Coughlin had to pay 180 thousand dollars, while the Mclaren employees Pady Lowe, Jonathan Neil and Rob Taylor all had to pay 150 thousand. Some of those individuals still went on to continue working in F1 for some time. The Spygate scandal is one of the main reasons for the downfall of Mclaren and how its relationship with Mercedes deteriorated as Mercedes who then owned 40% of Mclaren had to pay 40 million of the 100 million dollar fine.

By Paul Kontogeorgos.