SPYGATE: A Formula 1 Thriller

SPYGATE Transciption Video Notes

Imagine that you are someone who lives in Surrey County and you’re the biggest Ferrari fan on planet Earth. You think Michael Schumacher is the greatest driver that ever lived. You work at a local copy store, it’s the average day for you, nothing out of the ordinary. And then, someone walks in. She doesn’t look familiar and nothing strange about her. The only thing that is striking is the fact that she asked you to make a copy of 780 pages and while that’s a pretty large order, still nothing really seems off. That is until you take it to the back and inspect the pages. You notice there’s a Ferrari emblem in the bottom corner. Why would someone be having official Ferrari documents? It’s a good question.

You’ve already completed the transaction and rung out the customer, so now it’s time to Google it, T-R-U-D-Y C-O-U-G-H-L-A-N, Trudy Coughlan. Okay. Who is this? All right. No one famous, but there’s a Trudy Coughlan married to Michael Coughlan who is the chief designer at McLaren. And that’s when the alarm bells start to go off because you’re in Surrey County after all, that is home to McLaren. Being the loyal Ferrari fan, you do the only thing you really can do, Google the highest-ranking person you can find at Ferrari and email them. And that’s exactly what you do, email Stefano Domenicali. Despite being floored by what you just heard, you have no reason to think that it’s a lie. So, then Ferrari Sporting Director, Domenicali, ends up escalating the message. Meanwhile, the customer who brought in the Ferrari documents came back as usual the next day to pick up her documents that should have been scanned onto a disc drive.

What you just heard is a true account of how Formula One’s greatest spy controversy became unraveled, at the hands of one diligent, loyal for our fan paying attention in Surrey County. In order to really understand this story, we have to go back to the 1990s when a man named Nigel Stepney who was not Italian at all, was in charge of the mechanics for the Scuderia. He was a very important puzzle piece in the Ferrari comeback and dream team as they were called. And naturally, you’ll recognize some of the names on the list. They include the likes of Michael Schumacher, Jean Todt, Ross Brawn, Rory Bryne, and of course, Nigel Stepney. And what’s most important about this is the fact that Nigel Stepney was just a mechanic without a college degree. He was the right-hand man of Ross Brawn. Most people on the paddock and everyone in Formula One were already well-familiarized with the fact that Ross Brawn was a visionary, he was a genius. And having the ear of someone like that, well, that put you in a very important position. And Stepney’s power and authority was only cemented when Ferrari brought home five consecutive championships from the year 2000 to 2004 but all good things must come to an end and Stepney’s comfortable situation started to close in around him.

In 2006, we see the retirement of Michael Schumacher. It is also announced that Ross Brawn will be on sabbatical. Stepney was now exposed and he was no longer surrounded by his power for allies, but he still thought he had a chance at a technical director role. This is one of the critical moments in the entire story itself because it speaks to the motivation of Nigel Stepney. He went into the 2007 season, not realizing the fact that he wasn’t really qualified for that technical director role. So, in that role that Stepney had had his eyes on for so long, was filled by Mario Almondo, he was infuriated. But when you step back and actually take a look at the situation, it’s out of place for Stepney to be upset at all. He was still a mechanic. He did not have a degree. And for better or for worse, Ferrari’s a political place. You can’t put a mechanic at a technical director role without any sort of formal education.

The choice to put someone in that role and who you put in that role says a lot about your leadership and what you think that person’s going to be doing next. And while Almondo didn’t have the typical path to technical director, he did join Ferrari in 1991 as an engineer. And in 1995, he was promoted to industrial director of F1 operations. So, while Stepney was upset about the decision, it wasn’t totally out of that field and it’s the fact that he could not come to grips with the fact that he was not qualified, he was not an engineer. That is really what motivated the things that happened next.

In the interim of Almondo being named technical director in the beginning of the 2007 season, in February, Stepney gave an interview with “Autosport” and he was quoted as saying, “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.” If one thing is for sure, it’s the fact that Ferrari is particularly brutal about people who speak out against them, especially if they’re not even drivers.

So, when you see things like this and you see Stepney basically advertising he’s looking for a new role, it’s a little odd that Ferrari decided not to fire him right then and there, but it’s also likely as is pretty normal with most motor sports teams or just any technology team. They wanted to protect their underlying IP. So, getting rid of Nigel in a situation that was not necessarily positive could have led to something that could hurt Ferrari. So, instead of firing him, they decide for the 2007 season, he would not be traveling. They basically diluted his power. And if you remember, he’s not protected by the dream team. He no longer has the powerful people around him like Ross Brawn, like Michael Schumacher.

And just think about how much importance Stepney had built around the race team about how he had achieved so much from the ground up, really making his own way. Someone who’s not even Italian, he’s British born and all that was taken away from him. The team didn’t even let him go. They basically just said, “Stay at home,” to Stepney, and someone who had built so much importance around being on the race team, you can begin to see the motivation fall directly into place.

If we fast forward to the middle of May, 2007, we’ve only made it for Grand Prix events into the season before some things start to occur. It is the week prior to the Monaco Grand Prix, that Friday in fact. And someone, one of the mechanics finds some white powder outside one of the cars. Ferrari being very careful about their cars and the safety of course of the drivers, they called the police immediately. Everyone is searched right there on the spot and it turns out Nigel Stepney is the one with powder in his pockets. The police then ran the analysis and confirmed that the powder that was found in the fuel tank and around the fuel tank was the same powder that was found in his pockets naturally.

Now the timeline here is key. Probably certainly had enough information to open up their own internal investigation. The Monaco Grand Prix was the 27th of May. The Canadian Grand Prix was the 10th of June. From that Friday prior to the Monaco Grand Prix and the week that led into United States Grand Prix, Ferrari had decided, yes, it’s time to now officially lodge our complaint against Nigel Stepney. So, the grid heads to the Brickyard in Indy and the DEA in Italy opens up their own investigations that are criminal against Stepney. In all, it only took two weeks for the investigations to conclude and Nigel Stepney was fired by Ferrari on July 3rd just after the French Grand Prix.

Ferrari weren’t done. They had reason to believe that there was another actor that was a part of this sabotage. They also announced in conjunction with Stepney’s dismissal that they were opening up investigations with “an engineer from the Vodafone McLaren Mercedes team” and it was actually “Autosport” who ended up breaking the fact that it was Coughlan. Probably confirmed that their investigation and the search warrant they had issued produced “a positive outcome.” This was understood that this was confirmation that Coughlan did in fact have possession of direct documents from the Marinello factory.

So, just to remember, they still have not been able to connect any sort of documents leaking from Marinello to Coughlan, but now, for sure, they have Stepney who was found with powder in his pants,` powder in the fuel tank. Something must be going on here. And just a week after Ferrari had announced that they were going to be going after Coughlan, a high court hearing was initiated on July 10th. The court announced that they were going to give Coughlan a day to submit some form of an affidavit describing the events, confessing, just going on record officially.

Now, here’s where we can finally begin to connect the dots. On the same day that the high court asks for an affidavit, that email was received from that employee from the photocopy store that Trudy Coughlan visited in order to copy all of the documents that came from Marinello onto a disc drive. Now that Ferrari could connect the technical information that had left Marinello directly to Coughlan, the situation was of course escalated. They had all the pieces of the puzzle and surely thereafter, another search warrant was initiated. The Coughlan’s Indy information were found and both parties came to the agreement that the Coughlan’s would 100% cooperate no matter what now and in the future with this investigation. In exchange, Ferrari would drop the high court case and handle it internally, but the decision to drop the high court case did not mean that the Coughlan’s were exonerated quite just yet. There were still more to get to the bottom of.

Things were escalated less than a week later when McLaren announced their own internal investigation had revealed that the information taken from Stepney to Coughlan did not reach anyone else inside of the McLaren factory. Later that month, on July 26, McLaren was brought in front of the World Motor Sport Council to answer for the charges. McLaren had been open throughout this process since the FIA was investigating and Ferrari was levying the charges about the design of the car and providing blueprints to anyone asking. The goal was to provide critical evidence that proved that none of the information taken from Ferrari was used in the design of the McLaren car and this is consistent with what the FIA decided about McLaren’s fate at the July 26 hearing. Because they could not tie any of the data that was collected, was actionable or used on the car itself, they decided not to punish the team.

Despite Ferrari being open and working with all the parties that were involved in the scandal, they were livid when they found that, number one, the FIA found McLaren in breach of Article 151 (c) the Sporting Code, but then simultaneously they got no punishment. Ferrari’s only consolation was the fact that the FIA left the door open for any future hearings to happen and take place on this exact subject should new evidence come to light.

All of this is occurring, we’ve been to Silverstone, we’ve had the European Grand Prix, and now we’re at the Hungarian Grand Prix. But before we can get to the race weekend, bizarrely. On August 1st, Ron Dennis reaches out the Italian Motorsport Authority and accuses Ferrari of cheating to win the 2007 Australian Grand Prix, which was the first event of the year in March 18th. What’s funny about this is their source is the beacon of morality, Nigel Stepney. That race weekend is where things get really interesting.

So, to set the stage, it is now August 4th, the race weekend of the Hungarian Grand Prix, Saturday being the qualifying day. Throughout the qualifying session, Alonzo and Hamilton were trading top times. When it came down to the final Q3 session, Hamilton was at the time in front. At about the 2 minutes and 30-second mark, just about all of the drivers decided to pit for the fresh tires and make their final go-around. The McLaren cars, of course, naturally were stacked. Alonzo happened to be in front of Hamilton at the time and the crew, after they put on the tires, decided to hold Alonzo for about 20 extra seconds. They said it was for Alonzo to get some clear air, but all of the stewards who were asked about this later said this wasn’t true because all of the cars were in pit lane while the air was clear. But even after this lengthy pause, Alonzo’s gestured to leave his pit box and go out for his final qualifying session. Hamilton is still sitting behind him. He sits for an extra 10 seconds after he’s told to leave. And Alonzo surely was aware of the amount of time that was needed in order to set a lap time. He was the one who made it out for Q3 but him strategically holding up Hamilton, forced Hamilton to miss entirely. He did not end up setting a final time.

Alonzo, on the other hand, had a fantastic lap and ended up setting the pole position on that final run and the broadcasters actually captured Dennis’s anger and frustration at the moment. Ron Dennis did confirm despite the fact that he was angry and upset that Lewis Hamilton did disobey a team order to let Alonzo through earlier in the session. The FIA investigated and they decided that Fernando Alonzo for the incidents in pit lane and for delaying his teammate, Lewis Hamilton, he would be demoted from pole position to sixth place. The team would also be penalized one championship point from whatever they took from that race. But the controversy doesn’t end with the FIA investigation being done. If anything, it spikes.

On the morning of the race, Alonzo is found to have met with Ron Dennis, and in that meeting, it is confirmed that Alonzo threatened Ron Dennis with the fact that he would tell the FIA that they had had conversations with Coughlan about the car and the information from Ferrari. And here’s where you should start to feel as the listener, that things are beginning to unravel for McLaren because that should be the hint right there that the FIA are unaware that McLaren had been lying to them all along. They’ve been saying that they did not know about the fact that Coughlan had the information and was passing it to the drivers. McLaren themselves were adamant that no one outside of those involved Stepney, Coughlan and anyone who was privy to the investigation were aware of the Ferrari information that exchanged hands. Remember, that was the impetus for the ruling that happened in late July where the FIA could not charge with McLaren with anything because they had not acted on the information.

In a panic, Ron Dennis doesn’t know what to do, so he goes to Max Mosley and he essentially says, “This is an empty threat. This is the conversation we had.” Alonzo claims that he’s going to be sending this out, so this looks like it’s Ron Dennis’ attempted damage control, but in reality, it backfires. So, while Alonzo doesn’t do anything with that information quite just yet, now Max Mosley is paying attention. He’s aware of the fact that there might be more to the story and McLaren had been lying all along. Fast forward just one month and on September 5th, so that is after the Turkish Grand Prix, right before the Italian Grand Prix, it’s come to light that there is more evidence. As it turns out, there were extensive conversations that were occurring digitally between Pedro de la Rosa, Coughlan, and of course, Alonzo. After the messages were sent over to Egleston, Bernie then sent them on to the FIA and the FIA opened up officially the new investigation on September 13th. But this time, the FIA investigation would go a lot differently.

They had all of the information. By all available reporting, this looked to be 288 texts, 35 phone calls at least, and this was between directly Coughlan and Stepney. On top of that, as if it wasn’t damning enough, they also had emails directly from the drivers that were incriminating themselves and the McLaren team to have information and to be capitalizing on that stolen information from Ferrari all the while supposedly to have been lying to Ron Dennis who was then feeding that narrative to Max Mosley. But this all fell apart. I have a couple of links in the description below where you can see not only the full FIA decision in its entirety, but I’ll also pull out the emails and texts cited in the FIA decision so you can just jump straight to that because it’s pretty entertaining actually to see them openly talking about this stuff and how they’re just going to be using this information illegally.

But if one email did it, if one conversation did it, it’s this one. De la Rosa said to Alonzo, “All the information from Ferrari is very reliable. It comes from Nigel Stepney, their former chief mechanic. I don’t know what post he holds now. He’s the same person that told us in Australia that Kimi Raikkonen was stopping in lap 18. He’s very friendly with Mike Coughlan, our chief designer and told him that.” And in one email, de la Rosa appended the entire lie. Not only did it prove that this was far beyond just trading hands between Stepney and Coughlan and not only did it prove that this information didn’t just land in their lap, they were taking information directly stolen from the competitor. The worst of all was the fact that it had intent. They were prepared to use that to their advantage. It wasn’t just talk, it wasn’t just information, they were ready to lie to the fullest extent despite the fact that they knew they were openly breaching Article 151. They were ready to use that information.

If they hadn’t already, mind you, that would’ve been hard to figure out even with the blueprints. With all of the evidence now available, the FIA could make a comprehensive decision and it was going to be harsh. It didn’t take them long to come back with a verdict. Obviously, they were in breach of 151 but now, McLaren was fined $100 million and this still holds a record for the largest Formula One penalty ever handed out and arguably in almost all of sports. And naturally, the team was occluded from the Constructor’s Championship that year. But what’s interesting is neither Hamilton nor Alonzo were actually excluded from the drivers’ championship standings. It’s worth noting right here that prior to the September 13th ruling, Max Mosley gave the drivers a final opportunity to present any more information.

Alonzo and de la Rosa both gave up the information and the conversations they were having back and forth, although the FIA would have them anyway. Hamilton on the other hand said he had nothing more to add. He did not have any conversations. Also, interestingly, Alonzo did not show up to the hearing itself, whereas Hamilton and de la Rosa did. So, many people in the motorsport community still criticize the fact that yes, Alonzo was promised immunity had he cooperated with the FIA in giving up the information, but he still actively was a part of the sabotage, was in on the lie and even attempted to blackmail the team.

As fate would have it, karma would have the last laugh, going into the final Grand Prix, Kimi Raikkonen, the Ferrari driver was in third place. He was trailing in the championship, not only Fernando Alonzo but also the rookie, Hamilton. With a clear shot at a championship, because remember they were excluded from the Constructor’s championship, both of the drivers dropped the ball. Lewis Hamilton dropped back all the way to seventh place, only taking two points on the day. Alonzo’s efforts while good enough to earn him a podium, only got him six points on the day. He then ended the season with a final tally of 109 matching Hamilton’s but on count-back, Hamilton technically was the winner. But, Kimi Raikkonen was the final piece of this puzzle and as he took the race win, taking all 10 points, this brought him to a final tally of 110 points. One point off the deadlock teammates of McLaren. Talk about poetic justice.

If you’re anything like me and you’re a life-long Formula One or just a motorsport fan in general, you know that these things keep happening. History always repeats itself. Every time it happens though, you always think, “Yeah, that’s not new. Everyone does that.” But when a team is caught doing it and the dirty laundry is aired, it reminds us of how ugly this sport can be and just because something is typically done doesn’t mean that something should be done. And we, as Formula One fans have a tendency to employ some weird form of revisions history where we forget our favorite drivers have been enthralled in these scandals and within the walls of the garage and inside the formula one paddock, they’re no less guilty of having this tendency. Even some of the people that were involved with this went on to keep working in Formula One. Mike Coughlan ultimately had to pay 180,000 while the McLaren employees Paddy Lowe, Jonathan Neale, and Rob Taylor all had to pay 150,000. Some of these individuals still went on to find work in Formula One.

This is similar to the story that I did on Crashgate in that, well, number one, Alonzo’s involved, but number two, we see Pat Symonds who’s one of the chief architects of the entire scandal. Well, go ahead and Google what Pat Symonds does today. He’s a pretty powerful person in the FIA no less after that controversy. I get it. We all get second chances, but these are pretty major scandals. The writing was already on the wall with McLaren and how things were being handled, the partnerships, how all their employees were working with each other, but it was this right here that actually broke the back of the situation. This is acutely true at McLaren between Martin Whitmarsh, who is the COO and Ron Dennis. As it turns out later that year, on December 13th, McLaren actually sent out a press release where Martin Whitmarsh essentially says, “Yeah, we basically knew about this. Everyone on the team knew about this. We lied to you and we’re sorry. We knew about the Ferrari technical information and we said nothing and we let this thing play out and it turned into a circus and we apologize.”

Ron Dennis’s ego was heard a bit more. Right after the hearing, he tried to come out and say that he was the one who told the FIA that there was all this other evidence from de la Rosa and Alonzo and Max Mosley immediately shut that down and said, “No, actually, Ron Dennis is the one that lied to me and said there was no other information. Alonzo had an empty threat, but in fact Alonzo was telling the truth. He had information.” Ron Dennis not only got it from the FIA, he got step to him from inside his own team. This will be one of the chief plotlines about the downfall of McLaren, where this came from and how they are rebuilding. That would be in the next Formula One story.

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