2007 Formula One espionage controversy

The 2007 Formula One espionage controversy, also known as "Spygate" or "Stepneygate", involved allegations that the McLaren Formula One team was passed confidential technical information from the Ferrari team, and that the Renault F1 team was passed confidential technical information from the McLaren team.

The original case involved 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 concerning the theft of technical information.

These allegations were 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.

An FIA hearing into the matter took place on 26 July 2007 but did not result in any penalty for McLaren, however a second hearing took place on 13 September 2007, and by then in receipt of compelling evidence resulted in several penalties for the team. The most important of these were the team's exclusion from the 2007 Constructors' Championship and a record-breaking fine of $100 million (USD).

Following information from McLaren allegations were subsequently made during November 2007 by the FIA against the Renault F1 team regarding information they were found to have in their possession concerning the 2006 and 2007 McLaren F1 cars. These allegations were also the subject of an FIA investigation, with an FIA hearing taking place 6 December 2007.

Background

Along with Michael Schumacher, Jean Todt, 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 reorganization which resulted from Ross Brawn’s departure:^[2]

“

I am looking at spending a year away from Ferrari, I'm not currently happy with the situation 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.

”

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, at the 2007 United States Grand Prix 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".^[5]

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:^[7]

“

Ferrari announces it has recently presented a case against Nigel Stepney and an engineer from the Vodafone McLaren-Mercedes team [named by Autosport.com as Coughlan] with the Modena Tribunal, concerning the theft of technical information. Furthermore, legal action has been instigated in England and a search warrant has been issued concerning the engineer. This produced a positive outcome.

”

The search warrant is understood to have been related to Coughlan's home and the "positive outcome" is reported to be documents claimed to have originated at Ferrari's Maranello factory.^[8] Stepney's dismissal from Ferrari had been announced earlier the same day.^[9]

On 10 July 2007 a High Court hearing was opened and adjourned until the following day, to allow Mike Coughlan to submit an affidavit.^[10] 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.^[11] Ferrari were unaware that their technical information had been stolen until they received a tip from an employee in the photocopying shop. The staff member saw that the documents were confidential and belonged to Ferrari and, after copying them, decided to contact the team’s headquarters in Italy.^[12]

Coughlan did not submit the affidavit because of the possibility of it being used against him in an Italian court case.^[11] However, late on 10 July 2007, Ferrari reached an agreement with Mr. and Mrs. Coughlan under which 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.^[13]

On 16 July 2007, McLaren announced that its own internal investigation had 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."^[14]

Allegations against Renault F1

On 8 November 2007, the FIA announced that the Renault F1 team would be summoned before the FIA World Motorsport Council to answer a charge of possession of confidential information relating to the 2006 and 2007 McLaren Formula One cars. The statement issued by the FIA states that Renault F1 was found to have information "including, but not limited to the layout and critical dimensions of the McLaren F1 car, together with details of the McLaren fuelling system, gear assembly, oil cooling system, hydraulic control system and a novel suspension component used by the 2006 and 2007 McLaren F1 cars". The date for the hearing was set for 6 December, 2007.^[15] The espionage claims are thought to revolve around an employee, Philip Mackereth, who transferred from McLaren to Renault, according to FIA President Max Mosley.^[16]

FIA investigation

On 4 July 2007, 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."^[17] 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.^[18]

On 12 July 2007, the FIA announced that it had summoned McLaren to an extraordinary meeting of the FIA World Motor Sport Council to answer charges that they had breached Article 151C of the International Sporting Code.^[19] At the hearing on 26 July 2007, FIA found that Vodafone McLaren Mercedes was in possession of confidential Ferrari information and is therefore in breach of the 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.^[20]

Ferrari labelled the decision "incomprehensible"; Autosport judged the team to be "furious".^[21] McLaren said "[a] unanimous decision has been taken by the FIA which in McLaren's opinion is very balanced and fair."^[22] The matter was referred to the FIA International Court of Appeal, with the hearing scheduled for September 13, 2007.^[23]

On 1 August 2007, 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.^[24] 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 of which it insists it was not aware.^[25]

The 2007 Hungarian Grand Prix was a controversial weekend for McLaren; Alonso held Hamilton up in the pit lane during qualifying, denying Hamilton a chance to record a final lap time. TV pictures showed Ron Dennis angrily throwing his headphones down as Alonso pulled out of the pits, and after the session was over he was then shown having a serious conversation with Alonso's trainer. On the morning of the race (August 5), Alonso met Ron Dennis in his motorhome and allegedly threatened to send his email exchanges with McLaren test driver Pedro de la Rosa and Coughlan to the FIA. According to Max Mosley, Ron Dennis informed him of the conversation and told Mosley that the threat was an empty one, "There's no information, there's nothing to come out; I can assure you that if there was something, Max, I would have told you.” Mosley subsequently retracted the implication that Dennis had lied.^[26]

On 5 September 2007, the FIA announced that it had received new evidence regarding the case, and would re-open the investigation on September 13. This replaced the planned appeal hearing.^[27] It later transpired that the new evidence was the driver's emails that were sent to Bernie Ecclestone, F1's commercial rights holder who then informed the FIA.^[28] The FIA requested the three McLaren drivers (Alonso, Hamilton and de la Rosa) to provide relevant evidence and help FIA in further investigation. In return FIA offered assurance that any information made available would not result in any proceeding against the driver personally under the International Sporting Code or the Formula One Regulations. However, the drivers were notified that if it later came to light that they had withheld any potentially relevant information, serious consequences could follow.^[29]

On 11 September, McLaren approached the FIA with questions about the Renault F1 team, and possibly other, unknown teams as well. It is unknown if this relates directly to the espionage scandal, but a key McLaren argument is that if they are guilty, other teams are as well.^[30]

On 13 September, the FIA hearing imposed a penalty for illicitly collecting and holding information from Ferrari to confer a dishonest and fraudulent sporting advantage upon McLaren. The penalty consisted of exclusion from and withdrawal of all points awarded to McLaren in all rounds of the 2007 Constructors' Championship, a record fine of $100 million (less the TV and travel income lost as a result of the points deduction), and the obligation for the team to submit its 2008 chassis for scrutiny. However, Fernando Alonso and Lewis Hamilton's points were not affected, and the two were free to contest the Drivers' Championship, because McLaren's drivers were offered immunity in exchange for cooperation. The team was not banned and all drivers points earned only counted towards the driver's championship points. Whenever a McLaren driver won any of the remaining races, (the only example being Hamilton at the Japanese Grand Prix), no McLaren representative was allowed onto the podium.^[31]

On 14 September, Ron Dennis announced that he was the one who alerted the FIA that further evidence existed.

On 15 September, Max Mosley contested Ron Dennis' claim that he alerted the FIA to the existence of further evidence, claiming that Dennis actually alerted him that Alonso had decided to send the emails in himself, and that Mosley had been erroneously assured by Dennis that the emails contained nothing incriminating.

On 6 December, Renault were found guilty of breaching article 151(c) of the International Sporting Code by another FIA WMSC hearing, but escaped penalty.^[32]

On 13 December, McLaren issued a press release detailing a letter sent by Martin Whitmarsh, COO of the team, to the FIA.^[33] In the letter, Whitmarsh stated that the team accepted that "a number of McLaren employees" had access to Ferrari technical information, and apologised that it took the intervention of the FIA for this to come to light. The team also offered to "enter into discussion... as to a moratorium of an appropriate length in respect of the use" of the systems.^[34] On the same day, the FIA issued a press release stating that the FIA president would ask the members of the World Council "for their consent to cancel the hearing scheduled for 14 February 2008 and, in the interests of the sport, to consider this matter closed." ^[35]

On 23 February 2009, legal proceedings against McLaren employees in Italy were dropped. In return, Mike Coughlan had to pay €180,000 while Paddy Lowe, Johnathan Neale and Rob Taylor had to pay €150,000.^[36]

Timeline

2007

March or April

• McLaren's chief designer Coughlan obtained in March, prior to the Australian GP, documents from Nigel Stepney. McLaren later states this was in April.^[37]

Sunday, 27 May

• An incident occurred prior to the Monaco Grand Prix when white powder, later alleged to be a sabotage attempt by Stepney, was discovered in the fuel tank of Felipe Massa's car and sent to the police.

Friday, 22 June

• 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, 24 June

• Nigel Stepney declares that he is the victim of a "dirty tricks campaign" waged by the Italian team.

Tuesday, 26 June

• 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, 2 July

• Ferrari makes an application to the High Court in London for the court's assistance.

Tuesday, 3 July

• 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, 4 July

• 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, 5 July

• Nigel Stepney is interrogated for more than three hours by Italian police. His house near Maranello is raided for a second time.

Friday, 6 July

• Honda Racing F1 released a statement confirming Honda team principal Nick Fry met with Stepney and Coughlan in June 2007 regarding "job opportunities", but that no confidential information had been offered or received.^[18]

Saturday, 7 July

• 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, 8 July

• Stepney denies allegations that he passed reams of confidential team data to a colleague at McLaren.

Tuesday, 10 July

• Coughlan's case hits the London High Court for a public hearing. Coughlan is officially accused of receiving stolen and secret documents.

Wednesday, 11 July

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

Thursday, 12 July

• 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, 16 July

• Coughlan's 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, 18 July

• Stepney requests a meeting with his former boss Jean Todt.

Friday, 20 July

• Stepney's Italian lawyer Sonia Bartolini reveals that Ferrari has turned down her client's request for a meeting with Jean Todt.

Thursday, 26 July

• 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.^[38]

Friday, 27 July

• 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.^[39]

Monday, 30 July

• 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.^[40]

Tuesday, 31 July

• 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".^[41] The FIA said the hearing would likely be at the end of August.^[42]

Sunday, 5 August

• The morning of the Hungarian Grand Prix, Alonso tells Ron Dennis he will send incriminating messages exchanged between himself De la Rosa and Coughlan to the FIA, Dennis informs Max Mosley

Tuesday, 7 August

• The date of the ICA hearing is confirmed as September 13.^[23]

Wednesday, 5 September

• The FIA announces that the case will be re-opened following the emergence of new evidence. It is confirmed that the new investigation will take place on September 13, replacing the ICA hearing.^[27]

Thursday, 13 September

• The second hearing commences. McLaren driver Lewis Hamilton is called as a witness.
• Following the hearing it is announced that McLaren is to be fined $100m, have their points stripped from the 2007 Constructor's Championship, and be required to submit their 2008 car designs to the FIA by December 2007, pending exclusion from the 2008 championship if they are found to contain Ferrari's intellectual property. McLaren's drivers are not directly affected.^[31]

Friday, 14 September

• The FIA issues a statement detailing its reasons behind the sanctions imposed on McLaren. In the statement, the FIA said that emails between the McLaren drivers proved that the British-based team used information leaked from title rivals Ferrari. The FIA statement also said "The emails show unequivocally that both Mr Alonso and Mr de la Rosa received confidential Ferrari information via Mike Coughlan. Both drivers knew that this information was confidential Ferrari information and that both knew that the information was being received by Coughlan from Nigel Stepney".^[29]
• The FIA has also published an email exchange between De la Rosa and Alonso. "All the information from Ferrari is very reliable," De la Rosa wrote to Alonso on 25 March in an exchange about the Ferrari's weight distribution. "It comes from Nigel Stepney, their former chief mechanic - I don't know what post he holds now. He's the same person who told us in Australia that Kimi (Räikkönen) was stopping in lap 18. He's very friendly with Mike Coughlan, our chief designer and he told him that." In addition, the gas that Ferrari uses to inflate its tyres is discussed, as is the team's pitstop strategy and braking system.^[29]
• Ron Dennis says he is to decide whether to lodge an appeal against the FIA's penalty, and will make his decision after the Belgian Grand Prix that is taking place that weekend.
• Ron Dennis reveals that he learned of the emails and texts between Coughlan, De la Rosa and Alonso after the Hungarian Grand Prix and immediately informed the FIA - resulting in the hearing of 13 September.^[43]

Saturday, 15 September

• Max Mosley refutes Dennis' claim regarding the emergence of the evidence.^[44]

Sunday, 16 September

• In an interview with Steve Rider, broadcast during ITV's coverage of the Belgian Grand Prix, Ron Dennis states he is "unlikely" to appeal the penalty handed out by the FIA.

Monday, 17 September

• It is alleged McLaren may file a complaint against Renault about alleged use of technical information. FIA president Max Mosley said "It's allegedly an employee who took some floppy disks with him. We haven't had the complaint or the detail we have been promised from McLaren about that, but when we get it, we will investigate. We've had a dossier from Renault which doesn't look particularly damning, but then again, you wouldn't expect it to." But Renault boss Flavio Briatore insists the situation bears no link to the spy row between McLaren and Ferrari which was resolved in Paris last Thursday.^[45]

Wednesday, 19 September

• FIA publishes transcripts of the World Motor Council's hearings on July 26 and September 13

Wednesday, 7 November

• The FIA announce that the Renault F1 team have been summoned before the FIA World Motorsport Council on 6 December, to answer a charge of possession of confidential McLaren technical information. A statement from the FIA read that the information included "the layout and critical dimensions of the McLaren F1 car". The FIA statement goes on to say that Renault F1 were accused of "unauthorised possession" between September 2006 and October 2007 "of documents and confidential information belonging to McLaren, but [was] not limited to, the layout and critical dimensions of the McLaren F1 car, together with details of the McLaren fuelling system, gear assembly, oil cooling system, hydraulic control system and a novel suspension component used by the 2006 and 2007 McLaren F1 cars."^[15][16]
• It emerges that up to 15 Renault F1 employees knew of the McLaren data.^[46]

Friday, 23 November

• McLaren accuse Renault of possessing their team information and gaining an "unfair advantage" from it. A McLaren dossier says the information was "knowingly and widely disseminated" within Renault. McLaren's dossier - which has been submitted to the FIA - includes 18 witness statements in which Renault F1 employees admit that they viewed confidential technical information belonging to McLaren.^[47]
• McLaren also contend that 33 files belonging to the team, containing more than 780 individual drawings outlining the entire technical blueprint of the 2006 and 2007 McLaren F1 cars, were loaded onto Renault's computer system in September 2006.^[47]

Wednesday, 5 December

• McLaren COO Martin Whitmarsh writes letter to the FIA, accepting that "the inspection [of McLaren technical data] provides some support for the conclusion... that 'a number of McLaren employees... were in unauthorised possession of... Ferrari technical information'... We apologise wholeheartedly... that it has taken the intervention of the FIA and a time consuming process to expose all of the facts emanating from this matter". In the letter, Whitmarsh also identified certain systems on the car and offered to "enter into discussion... as to a moratorium of an appropriate length in respect of the use" of the systems.^[34]

Thursday, 6 December

• At an Extraordinary General Meeting of the World Motorsport Council, Renault are found to be guilty of breaching Article 151c of the International Sporting Code. They are not punished.^[32]

Friday, 7 December

• Another meeting of the World Motorsport Council to determine the legality of McLaren's 2008 chassis, the MP4-23 defers the decision to February 14, 2008 pending input from the McLaren and Ferrari teams into the final report.^[48]

Thursday, 13 December

• McLaren issue a press release (and their 5 December letter to the FIA) via their website, stating that "As a result of the investigations carried out by the Fédération Internationale de l'Automobile it has become clear that Ferrari information was more widely disseminated within McLaren than was previously communicated", and issued a public apology to "the FIA, Ferrari, the Formula 1 community and to Formula 1 fans throughout the world".^[33]
• The FIA later published a press release stating that "In the light of McLaren's public apology and undertakings, the FIA President has asked the members of the World Motor Sport Council for their consent to cancel the hearing scheduled for 14 February 2008 and, in the interests of the sport, to consider this matter closed." ^[35]

2008

Friday, 11 July

• McLaren and Ferrari both issue statements saying that all disputes between the two teams are now over. McLaren offer to reimburse Ferrari the costs and expenses related to the case and also a concluding payment. Ferrari say that this money will be donated to good causes. In the Ferrari statement it is made clear they will continue their claims against Nigel Stepney.^[49]

2009

Monday, 23 February

• Legal proceedings against Mike Coughlan, Jonathan Neale, Paddy Lowe and Rob Taylor in Italy were dropped, in exchange for payments of €180,000 (Coughlan) and €150,000 (others).^[36]

2010

Wednesday, 29 September

• Stepney was sentenced to a year and eight months in prison and a £500 fine, though under Italy's legal system he is highly unlikely to serve time.^[50]

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External links

• World Motor Sport Council Transcripts from 26 July 2007 and 13 September 2007