2007 FORMULA ONE ESPIONAGE CONTROVERSY

The '2007 Formula One espionage controversy' involves allegations made by the Ferrari Formula One team against a former employee (Nigel Stepney), a senior McLaren engineer, Mike Coughlan, and his wife Trudy Coughlan.
The allegations are the subject of legal action in Italy and an FIA investigation. A High Court case in England was dropped after Ferrari reached an agreement with the Coughlans.

Contents

Background

Details

Allegations against Stepney

Allegations against Mike Coughlan

Honda involvement

FIA investigation

Timeline

References

Background

Along with Michael Schumacher, Ross Brawn and Rory Byrne, Nigel Stepney was part of the colloquial “dream team” credited with the change of fortunes of Ferrari in the late 1990s.^[1]
In February 2007 Stepney made public comments regarding his “unhappiness” following the team’s reorganisation which resulted from Ross Brawn’s departure.^[2]
Later that month Ferrari announced another change in the team structure which saw Stepney appointed as head of Team Performance Development; "After many years spent working on the Formula One circuits, the last 13 of those as part of the Ferrari Race Team, Nigel Stepney, with the approval of the company, has chosen to take on a different role that will see him no longer have to attend the races."^[3]

Details

Allegations against Stepney

In the week beginning 17 June 2007 Ferrari filed a formal complaint against Stepney, leading to the commencement of a criminal investigation by the Modena district attorney in Italy.^[4]
On 3 July 2007 ''Gazzetta dello Sport'' reported that Ferrari had completed its internal investigation and had dismissed Stepney as a result.^[5] At the same time Ferrari spokesman Luca Colajanni told ITV Sport that Ferrari’s action against Stepney related to “irregularities discovered at the Ferrari factory prior to the Monaco Grand Prix."

Allegations against Mike Coughlan

On the day Ferrari announced Stepney’s dismissal, the team also announced it had taken action against “an engineer from the Vodafone McLaren-Mercedes team,” later named as Mike Coughlan. Coughlan was suspended by McLaren as a result.^[6] A Scuderia Ferrari press release said:
The search warrant is understood to have related to Coughlan's home and the "positive outcome" is reported to be documents claimed to have originated at Ferrari's Maranello factory.^[7] Stepney's dismissal from Ferrari had been announced earlier the same day.^[8]
On 10 July 2007 a High Court hearing was opened and adjourned until 11 July 2007 to allow Mike Coughlan to submit an affidavit.^[9] However details released include the fact that Mike Coughlan is alleged by Ferrari to be in possession of 780 pages of Ferrari documentation and that his wife is alleged to have taken them to a photocopying shop near Woking.^[10] Coughlan did not submit the affidavit because of the possibility of it being used against him in an Italian court case. However late on 10 July Ferrari reached an agreement with Mr. and Mrs. Coughlan underwhich Ferrari dropped its High Court case in return for their full disclosure of all they know about the case and a promise of future cooperation.^[11]
On July 16, McLaren announced that its own internal investigation has revealed that "no Ferrari materials or data are or have ever been in the possession of any McLaren employee other than the individual sued by Ferrari. The fact that he held at his home unsolicited materials from Ferrari was not known to any other member of the team prior to July 3".^[12]

Honda involvement

On 6 July Honda Racing F1 released a statement confirming that Stepney and Coughlan approached the team regarding "job opportunities" in June 2007, but that no confidential information had been offered or received.^[13]

FIA investigation

On 4 July McLaren announced it had conducted an investigation and concluded that "no Ferrari intellectual property has been passed to any other members of the team or incorporated into [our] cars." The team also invited the FIA to inspect its cars to confirm these facts; "In order to address some of the speculation McLaren has invited the FIA to conduct a full review of its cars to satisfy itself that the team has not benefited from any intellectual property of another competitor."^[14] Since the revelation of Coughlan's involvement in the affair McLaren provided a full set of drawings and development documents to the FIA, detailing all updates made to the team's chassis since the incident occurred at the end of April.
On 12 July the FIA announced that it had summoned McLaren to an extraordinary meeting of the FIA World Motor Sport Council to answer charges that they have breached Article 151C of the International Sporting Code.^[15] At the hearing on 26 July, FIA found that Vodafone McLaren Mercedes was in possession of confidential Ferrari information and is therefore in breach of article 151c of the International Sporting Code., but with no evidence that they had used the information no punishment was levied. However the FIA reserved the right to reconvene on the matter if any such evidence subsequently came to light.^[16]
Ferrari labelled the decision "incomprehensible", ''Autosport'' judged the team to be "furious".^[17] McLaren said "a unanimous decision has been taken by the FIA which in McLaren's opinion is very balanced and fair."^[18] The matter has been referred to the FIA International Court of Appeal, with the hearing due to take place on September 13.^[19]
On August 1 Ron Dennis, in an open letter to the president of the Italian motorsport authority Luigi Macaluso, accused Ferrari of giving a false and dishonest version of events and further that the car used to win the 2007 Australian Grand Prix was illegal.^[20] McLaren learned of the "illegal" floor device from Nigel Stepney, with the team describing this contact as whistle-blowing. However the team insists that following this incident, Jonathan Neale instructed Coughlan to cease contact with Stepney. McLaren accuse Ferrari of trying to blur this "whistle-blowing" of which McLaren was aware, with Coughlan's possession of the 780 page Ferrari dossier which it insists it was not aware.^[21]
On September 5, the FIA unexpectedly announced that it had received new evidence regarding the case, and will re-open the investigation on September 13. This replaces the planned appeal hearing.^[22] It subsequently emerged that the new evidence was provided by McLaren drivers Fernando Alonso and Pedro de la Rosa.^[23]

Timeline

;2007
'Early March'

★ McLaren's chief designer Coughlan obtained in March, prior to the Australian GP, documents from Nigel Stepney. McLaren later states this was in April. ^[24]
'Sunday, May 27'

★ An incident occurred prior to the Monaco Grand Prix when white powder was discovered in the fuel tank of Felipe Massa's car and sent to the police.
'Friday, June 22'

★ Police raid Stepney's residence near Ferrari's Maranello base.

★ Ferrari commenced legal action against Nigel Stepney, the action relates to alleged "illegal" behaviour and will be handled by an Italian court.
'Sunday, June 24'

★ Nigel Stepney declares that he is the victim of a "dirty tricks campaign" waged by the Italian team.
'Tuesday, June 26'

★ It emerges that the investigation may not be about sabotage. The suggestion is that Ferrari suspects a new case of espionage, involving the transfer of information to rival teams.
'Early July'

★ Coughlan's home in Surrey (UK) is raided by court officials, who apparently find incriminating evidence.
'Monday, July 2'

★ Ferrari makes an application to the High Court in London for the court's assistance.
'Tuesday, July 3'

★ Ferrari fires Stepney.

★ McLaren releases a statement, saying a senior member received technical information from a Ferrari employee at the end of April. Mike Coughlan is suspended.
'Wednesday, July 4'

★ A spokesman for Ferrari says: "We have proof that Stepney had been supplying technical information to a McLaren employee and we found evidence of that fact in his (Coughlan's) home."

★ F1's governing body launches an investigation into the incident.
'Thursday, July 5'

★ Nigel Stepney is interrogated for more than three hours by Italian police. His house near Maranello was raided for a second time.
'Friday, July 6'

★ Honda team principal Nick Fry met with Stepney and Coughlan in June. "At no point during this meeting was any confidential information offered or received. Nick Fry informed Jean Todt and Ron Dennis of the meeting."
'Saturday, July 7'

★ Max Mosley tells reporters that an FIA investigation into the affair, which is being led by race director Charlie Whiting, is under way. Honda is not part of the investigation.
'Sunday, July 8'

★ Stepney denies allegations that he passed reams of confidential team data to a colleague at McLaren.
'Tuesday, July 10'

★ Coughlan's case hits the London High Court for a public hearing. Coughlan is officially accused of receiving stolen and secret documents.
'Wednesday, July 11'

★ Coughlan does not appear in London's High Court after reaching an agreement with Ferrari. The suspended McLaren chief designer will provide a sworn affidavit to Ferrari in exchange for the information not being available to prosecutors in Italy.
'Thursday, July 12'

★ Representatives of McLaren are requested to appear before an extraordinary meeting of the FIA World Motor Sport Council in Paris on July 26, 2007 to answer a charge of breaching Article 151c of the International Sporting Code.
'Monday, July 16'

★ Coughlan's sworn affidavit details come out: he told several fellow McLaren employees about his possession of reams of secret Ferrari material. McLaren reacts the same day, denying Coughlan's allegations.
'Wednesday, July 18'

★ Stepney requests a meeting with his former boss Jean Todt.
'Friday, July 20'

★ Stepney's Italian lawyer Sonia Bartolini reveals that Ferrari has turned down her client's request for a meeting with Jean Todt.
'Thursday, July 26'

★ The World Motor Sport Council finds McLaren to be in breach the International Sporting Code for possessing confidential Ferrari information. They impose no penalty because of insufficient evidence that this affected the championship.^[25]
'Friday, July 27'

★ Ferrari release to the press "A reaction in the cold light of day", a lengthy monologue in which Jean Todt complains that though McLaren was found in breach of FIA's sporting regulations, "no sanctions were imposed." He states why Ferrari believe sanctions should have been applied. He also describes a request from Ron Dennis, received by Jean Todt early in the 2007 season, to establish a better relationship between the two teams to avoid "future denunciations to the sporting authority." Though initially sceptical, Ferrari came to such an agreement with McLaren on June 9.^[26]
'Monday, July 30'

★ Luigi Macaluso, the President of the Automotive Sport Commission of the Automobile Club of Italy (ACI/CSAI) writes to the President of FIA, Max Mosley, asking that Mosley submit this case to the International Court of Appeal of the FIA. Macaluso states he finds it difficult to justify no penalty for McLaren though they are in breach of the sporting code.^[27]
'Tuesday, July 31'

★ Mosley replies to Macaluso by letter and agrees to send the matter to the FIA International Court of Appeal. He explains why the WMSC chose not to punish McLaren, and outlines McLaren's argument before the WMSC on July 26, as well as some of the elements of McLaren's case which the WMSC considered "suspicious".^[27] FIA said the hearing would likely be at the end of August ^[29]
'Tuesday, August 7'

★ The ICA hearing is confirmed as taking place on September 13.
'Wednesday, September 5'

★ The FIA announces that the case will be re-opened following the emergence of new evidence. The new investigation is confirmed as taking place on September 13, replacing the ICA hearing.

References

1. Analysis: the remarkable Stepneygate saga Biranit Goren
2. Unhappy Stepney wants a sabbatical
3. Stepney moves in Ferrari reshuffle Jonathan Noble
4. Ferrari's Stepney faces criminal enquiry Jonathan Noble
5. Ferrari dismisses Nigel Stepney
6. McLaren suspect is Mike Coughlan Jonathan Noble
7. 'Police raid found Ferrari documents at McLaren designer's home'
8. Ferrari dismisses Nigel Stepney
9. Espionage case goes to High Court
10. Spy case court hearing adjourned Jonathan Noble
11. Ferrari, Coughlans reach agreement Jonathan Noble
12. McLaren confirms that Coughlan acted alone
13. Honda was approached by spy suspects
14. McLaren moves to allay spy case concerns
15. FIA summons McLaren in spy case
16. FIA imposes no penalty on McLaren
17. Ferrari furious with McLaren's reprieve Pablo Elizalde

18. McLaren say decision 'balanced and fair'
19. Appeal date is September 13
20. McLaren hits back at Ferrari.
21. McLaren hit out at Ferrari
22. FIA: Spy case to be heard again
23. Letter confirms drivers had new evidence
24. Extract of full article: Timeline of F1 spy saga
25.
26. Todt accuses McLaren of hypocrisy Biranit Goren
27.

28.

29.