€1m whistleblowers for Ecclestone’s cost cap plan

F1 Fanatic Round-up

Start, Korea International Circuit, 2013In the round-up: Bernie Ecclestone proposes enforcing a cost cap by offering ?����?�1 million (?�?�830,000) to anyone who provides accurate information about a team breaking the rule.

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Bernie Ecclestone offers huge reward for evidence of F1 rule breakers (Daily Express)

Ecclestone: “The plan under consideration is to give ?����?�1?�����?million to any whistleblower whose knowledge is proved to be accurate. We will then say to the team that the following year you will lose three of the maximum points you have scored. Then let?������s see if they want to cheat.”

Caterham: Lotus drive hurt Kovalainen (Autosport)

Tony Fernandes: “It was a whole mixture of a lot of things but in any decision there are pros and cons.”

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107 comments on €1m whistleblowers for Ecclestone’s cost cap plan

  1. Are any employees going to risk their career for 1M euros?

    • JamieFranklinF1 (@jamiefranklinf1) said on 10th February 2014, 0:28

      I’d certainly be tempted.

    • Prisoner Monkeys (@prisoner-monkeys) said on 10th February 2014, 0:33

      It’s always a risk with whistleblowers, but I think it is a plan that could work. There are real, lasting consequences up-front: losing your best three results will not just hurt, but make it virtually impossible to win the title.

      The problem is that there needs to be a clear definition of what constitutes cheating so that there can be no doubt.

    • George (@george) said on 10th February 2014, 0:39

      More to the point, is anyone going to trust Bernie to pay them?

    • Diego (@ironcito) said on 10th February 2014, 2:40

      A budget cap is unenforceable and unrealistic, even if nobody technically cheats. A Ferrari F1 engineer gets together for coffee with a Ferrari Road Car engineer. He casually mentions an idea that he had which could prove useful, but budget caps prevent him from testing. He proposes getting together for coffee again next week. The next time they meet, the Ferrari Road Car engineer mentions that he got curious about his friend’s idea and tested it in the lab. Alas, it didn’t work as his friend had hoped. Test done. No cheating, just friends having coffee and chatting. The cost for Ferrari F1 is zero. Anyone can come up with many ways of circumventing the cap like that.

      • Bazza Spock (@bazza-spock) said on 10th February 2014, 5:07

        Who pays for the coffees in a situation like that?

      • Prisoner Monkeys (@prisoner-monkeys) said on 10th February 2014, 8:48

        @ironcito – And then one of the Ferrari accountants starts wondering why the team has somehow developed parts without paying for them. So he goes to his friend at the wind tunnel and the two start talking, and realise that the final parts arrived for testing, fully developed. The guy in the wind tunnel goes back over the testing logs, and they find that there is no record of the parts being developed at all – they just appeared. The two go to the FIA, and explain their theory, using evidence to show how it works. The FIA investigate, and discover that the road car division paid for and developed parts that have no application, and the whole scheme falls apart.

        The teams have to document everything for their own purposes. They need to know where materials come from, how much it costs, how much time it spent in the wind tunnel, they need plans so that they can go back and develop parts of it, data so that they can see how it evolved over time, and so on and so forth. Everything goes somewhere, and there will always be a paper trail no matter how well it is hidden. If resources are missing or parts suddenly appear, it is *very* suspicious.

        • rsp123 (@rsp123) said on 10th February 2014, 19:01

          If the team in question is Ferrari there will be no problem – they’ll have another special exemption that no other team has.

        • Diego (@ironcito) said on 10th February 2014, 19:10

          @prisoner-monkeys A technology or concept could very much apply to road cars as well as F1. Or to Le Mans, or to any other category that doesn’t have a budget cap. Of course, it wouldn’t be something as obvious as a finished F1 front wing, but some things are more generic. At the very least, it’s a gray area.

          Let me give you another situation. Somewhere in Germany, a non-F1 Mercedes plant (or a subsidiary) purchases a very expensive industrial machinery. They use it for a day and then they realize that they don’t like the color its painted, so they decide to sell it. “Hey, maybe the folks from Mercedes F1 are interested, I heard they were looking to purchase one of these. Of course, these machines lose half their value the minute you drive them off the lot, so we’ll have to sell it to them for half of what we payed.”

          And it doesn’t even have to be something with bad intentions like that. I’m sure that there are genuine overlaps and economies of scale that benefit teams like Ferrari or Mercedes that have big engineering operations outside F1.

          • CHIUNDA said on 11th February 2014, 12:43

            This. Plus just own more teams ala Red Bull and Toro Rosso and spread the budget around

    • What happens when everyone starts claiming the prizes? What about framing eaxh other, is that espionage, and worth 100 million.
      I thought i would win the cotd.

      • “It was the other rig’s fault” As in you didn’t lose the title because of Symonds rig but the fuel rig problem. Were those the actual coordinates of piquets crash, or Symonds own words.

      • BasCB (@bascb) said on 10th February 2014, 6:49

        The wording is that for the money to be paid, there has to be substance to the allegation. What this does is that it raises the risks involved in cheating the limit, to me it sounds like on of the things that could make it work (to some extent) because the bigger teams will be wary to risk this happening @peartree

    • bertie (@bertie) said on 10th February 2014, 17:19

      The problem isn’t just whistleblowing it is how you decide who has spent the money. Is it red bull racing or red bull technologies. This is a grey area no amount of whistle blowing can fix.

      • BasCB (@bascb) said on 11th February 2014, 8:29

        that is not a big problem though @bertie, because teams suppliers activities are often included already (see them having to stop all activities for a team during the summer break as well) under the FIA rules. All money/resources spent on behalf of a team count, not binded by what legal entity partakes.

  2. crr917 (@crr917) said on 10th February 2014, 0:33

    1mln euro confidentiality clauses from 2015 for everyone in my F1 team. If I only had one

    • BasCB (@bascb) said on 10th February 2014, 6:50

      Unenforceable @crr917, any court would throw out such an obvious attempt to get employees from whistle blowing.

      • crr917 (@crr917) said on 10th February 2014, 8:19

        @bascb No reason for any court to bother (unless the limit of the financial compensation is less than 1mln euro in the country). FIA is not the law and the law doesn’t care about FIA. FIA can’t negate confidentiality clauses.

        • crr917 (@crr917) said on 10th February 2014, 8:35

          Of course FIA can just fine the team and cover any such clauses instead of the whistleblower.

        • BasCB (@bascb) said on 10th February 2014, 8:48

          Wrong, there is all reasons for a court to bother when an employeer-employee relation is on the table (with a confidentiality cause) @crr917.

          • Prisoner Monkeys (@prisoner-monkeys) said on 10th February 2014, 8:52

            And cheating is a pretty serious issue. Chances are that by doing so, laws have been broken. When the Singapore scandal first broke, there was talk Briatore and Symonds could have been prosecuted under Singaporean law.

            Any attempt to buy the silence of employees by offering rewards for confidentiality would immediately be seen as suspicious enough for the FIA to investigate.

          • crr917 (@crr917) said on 10th February 2014, 14:14

            @bascb Confidentiality clauses are legal. If there is no breach of law the court has no power and can’t nullify the confidentiality clause. At least this is how I see it.
            Then again there would be a breach of contract between a team and FIA and some legal action can be taken. But even this is meaningless as in F1 going against the authority is unwise. Thankfully the authority has a price :)

          • BasCB (@bascb) said on 10th February 2014, 16:33

            How much are you into the subject @crr917? In the EU a court has indeed a very strong mandate to cancel any such clause if it is out of proportion to the potential damage an employee can cause, their salary and is not compensated for monetarily by the company.
            That is why gardening leave in F1 is maximum 6 months, more cannot be upheld, because it would unfairly impair the employee’s ability to earn themselves an income.

            In case of a company enforcing such a clause towards an employee who informed the regulatory body involved (for F1 that is the FIA) about misdoings of that company, that would be completely null and void. The FIA is the official regulatory body, and an entity has to oblige its rules. Not doing so (by violating the budget cap rules) is an infringement of the rules that entity operates under, regardless of being law or sporting regulations.

          • crr917 (@crr917) said on 10th February 2014, 20:09

            @bascb I am not into these things at all. But gardening leave and the duration of confidentiality clauses are different. It’s not the same thing at all. Confidentiality clauses can last years after leaving a job. (Also isn’t gardening leave payed?)

            Are you saying a car club has the same power as the state?

          • BasCB (@bascb) said on 11th February 2014, 7:51

            They are certainly not the same, no @crr917, and yes gardening leave has to be payed by the former employer.

            Confidentiality clauses have a different purpose. They work very well in partnerships between companies, but its problematic to use them to bind employees to not use what they learnt during their spell at a team. And they cannot be used to keep employees from whistleblowing about rules infringements to regulatory bodies though.

            As for you wondering about the power of a “car club” vs. a state, or international organisation, the FIA is indeed acknowledged by governments and the EU as the official regulatory body of the sport F1, and as such its rules are considered binding under common law for all its participants.
            To illustrate, if you recall the court case of Briatore who wanted to elude the FIA ban, his argument (which the courts agreed with) was that as a team principal he was NOT a participant – only licence holders, like race drivers or the team itself are. Since then the FIA has changed their rules and made team principals also explicitly stated as participating in the championship.

  3. schooner (@schooner) said on 10th February 2014, 0:51

    While HK didn’t exactly shine in his two drives for Lotus last year, I would doubt that was the main reason for him being overlooked for a seat at Caterham. The fact that he would actually cost the team some money was probably the biggest issue.

  4. If I were a team like Caterham – that needed money and probably won’t be effected by losing points the following year. I would break one aspect of the cost cap intentionally and get 100 trusted employees to “whistleblow” to the FIA. Thanks for the 100 mil Bernie!

    • Pete F. said on 10th February 2014, 5:07

      Great minds think alike. But nobody would believe Caterham could break the cost cap. They’d have to borrow money just to break the cap so they could collect the whistleblowers’ fees, then pay back the loan.

  5. Maciek (@maciek) said on 10th February 2014, 0:58

    If we needed any more evidence Ecclestone’s mind works like an autocrat’s: ‘Tattle on your friends and you’ll get a reward’. I mean, how much more comically (or is that tragically?) clichéd can you get?

    • pxcmerc (@pcxmerc) said on 10th February 2014, 7:54

      Eureka! What has F1 come to? Has it always been like this ???

      • ummm, private industry and government are full of examples of rewarding individuals who report malfeasance using official channels (ie, not leaking classified data to the media) or who protect the integrity of something, or who save money for company/organization, etc.

        of course there are counterfactuals, but this is a great idea from Bernie and it shows a seriousness about pursuing cost-capping that is a great sign for the fans who care about F1’s viability.

        There will be a limited pool of employees who may have access to evidence of cheating, but 1million should strongly incentivize them, especially if actionable evidence can be provided w/o requiring the naming of the source (in public).

        • Maciek (@maciek) said on 10th February 2014, 22:08

          @joepa
          That there are examples of the philosophy elsewhere does not make it a good thing. Euphemisms like ‘incentivize’ may have gained currency by now, but they don’t change the fact that this line of thinking is based on the assumption that honesty can, should, and must be bought. Second, it is not a sign of seriousness about pursuing a cost cap (Ecclestone serious about capping costs? Please) but an attempt by a fading autocrat to keep himself at the center of power.

  6. bull mello (@bullmello) said on 10th February 2014, 1:02

    Sorry, the whistleblower proposal is truly one of the stupidest ideas to ever emanate from the ever fertile mind of devilish concoctions we have come to expect from Mr. Ecclestone. This does nothing to solve the well documented issues that prevent a fair and equitable budget cap from ever becoming a reality. What it does do is create a scenario that could likely become a bigger spectacle than what takes place on the racetracks of Formula 1. Bernie should begin his new career as soon as possible, creator of diabolically shameful reality shows for TV.

    • Prisoner Monkeys (@prisoner-monkeys) said on 10th February 2014, 1:15

      It’s intended to stop teams from spending more than they should by hiding money in companies outside the team itself. That has always been the biggest issue preventing a budget cap from being workable.

      • bertie (@bertie) said on 10th February 2014, 17:24

        The problem is research could be legitimately done by the road car division and then subsequently used within F1. Can you imagine how insanely hard proving this would be. The whistleblower would literally need an email or document explicitly stating that they are hiding money this way. The idea is terrible.

      • bull mello (@bullmello) said on 11th February 2014, 5:30

        @prisoner-monkeys – The upshot of this would be that were the FIA to adopt this proposal they would in as much be admitting they cannot enforce it on their own.

        The biggest problem besides enforcement is defining the allowable spending between the various different types of teams. Some manufacture consumer and/or exotic cars, some manufacture F1 engines, some do both, some are engine customers, some teams are wholly owned F1 racing teams, some are part of other non-F1 racing businesses that have overlap to their F1 racing operations. I don’t see a way to define regulations to cover all these different entities that will be fair and enforceable across the board to all teams, regardless of a snitch payoff rule. Also, it is hard to imagine the richer teams ever voting for anything they deem detrimental to themselves.

        Unfortunately, the cap itself and enforcement by snitching, then the subsequent acrimony and procedures to prove or disprove the snitching evidence sounds like planning every season to be like multiple versions of 2007. What about the possibility of fake snitchers paid of to wreak havoc on opponents? The resulting drama of all these possibilities would likely grab more headlines than nearly anything that might take place on track. The drama should be on the track, not in having entire teams living in constant fear and trepidation of false or even honest, but mistaken accusations.

        Now I could be totally wrong, it wouldn’t be the first time. ;)
        But, I just don’t see the cap or the snitch rule working.

    • dragoll (@dragoll) said on 10th February 2014, 2:44

      @bullmello said

      the whistleblower proposal is truly one of the stupidest ideas to ever emanate from the ever fertile mind of devilish concoctions we have come to expect from Mr. Ecclestone.

      I thought the sprinkler system was his worst idea…

  7. mantresx (@mantresx) said on 10th February 2014, 2:04

    Yet another ridiculous idea from Bernie, the FIA shouldn’t rely on snitches to know if the teams are breaking the rules or not.

    Imagine if they tried to do the same with the technical regulations and instead of checking the cars before every Grand Prix they just let them race until someone ratted their own team.
    All I can say is, and I quote: “Bet it doesn’t happen”.

  8. Sumedh said on 10th February 2014, 3:08

    Sorry, but I have to agree with Bernie here. There is no other way a budget cap can be enforced apart from getting teams to work against each other (which the whistle blower idea is at the heart of it). It is the classic ‘divide and rule’ policy that he is advocating here.

    The best part about this idea is that it does not need external policing. All the previous ideas of implementing budget caps have involved either external policing or self-control of expenses by the team, neither of each is possible to implement.

    Bernie’s idea is in fact easy to implement. If Red Bull does try to violate its budget cap, spies from Ferrari and Mclaren will be on to it immediately knowing that they stand to gain not only 1 million pounds but the added prize of Red bull not scoring points for 3 races. So, that will automatically dissuade Red bull from cheating. Eventually, it is the competition between teams that will ensure that the budget cap will get enforced.

    • Maciek (@maciek) said on 10th February 2014, 5:13

      It’s a terrible idea: no more than a fading grasp at keeping power over the teams by sowing mutual distrust by a man who knows his time is up.

      • BasCB (@bascb) said on 10th February 2014, 6:57

        I think that while it feels completely wrong, this is actually something that could make teams stick to a budget cap @maciek.

        • Maciek (@maciek) said on 10th February 2014, 15:55

          Hey @bascb
          To me it just reeks of the same tactic any autocratic system uses to keep its subjects in check: fear that someone might report you. All I see emerging in the long run are systems of disobedience (say, secret agreements between teams to cover for each other) but coupled with generalized mutual mistrust in the paddock, resulting in only more power for Bernie, which I believe is his real motive for the proposal – since when has Bernie been interested in reducing costs?

          The only thing that would work would be transparency and rigorous auditing – but whether that’s feasible in the world of F1, I don’t know.

          • BasCB (@bascb) said on 10th February 2014, 16:02

            Yes, I understand that @maciek. And I agree that its too close to having fear make people into spies on their neighbours that all oppressive regimes use with far too much success for comfort.

            With Bermie being the first to use every trick in the book to avoid transparency, he would certainly not be the one that should hand out such a payment, if anything it should be part of the FIA checks and balances.

            Personally I do not think its impossible to have transparency and rigorous auditing, but we will still need some kind of whistleblower function to make sure that well hidden secrets do get out in some way. Because teams will try and look at going right to the edge of what they can do unless there is a significant risk to their future in case they take it too far.

    • Pete F. said on 10th February 2014, 5:14

      No, the whistleblower is on the violating team. That’s how whistleblowing works. You don’t need to give a prize to the competition to turn you in. They’ll just do it.

    • caci_99 said on 10th February 2014, 12:12

      It could also backfire. It could become a trick of blackmailing. Imagine the whistleblower would first try to get more money from the team rather than the price of Berny.

    • bertie (@bertie) said on 10th February 2014, 17:30

      If he has to resort to whistleblowers to do this then it shows what a desperate situation he is in. It is literally impossible to enforce and insanely hard to prove. Unless the whistleblower has something explicitly stating they are cheating it will never happen.

  9. Jay Menon (@jaymenon10) said on 10th February 2014, 4:56

    ..so a 200 million cost cap is ok? How is that going to help the smaller teams?

    Only Ferrari, Red Bull and Mercedes can afford to spend anything close to that…so its status quo then?

  10. Prisoner Monkeys (@prisoner-monkeys) said on 10th February 2014, 6:34

    Today is the closing date for the second round of new applicants for the 2015 (or 2016) grid. Reports out of Germany claim that the FIA has been impressed by both Gene Haas’ entry and the Colin Kolles-supported Romanian bid, and that they are open to accepting both teams to the grid. We will know for certain on the 28th.

  11. Red Andy (@red-andy) said on 10th February 2014, 7:01

    It is interesting that while Kovalainen insisted that the Lotus drive would cement his chances at Caterham, his dismal performance has actually had the opposite effect. It seems that the Lotus decision to take him on was even sillier than it seemed at the time. Did anyone actually benefit from it?

  12. GeeMac (@geemac) said on 10th February 2014, 7:02

    So people who blow the whistle on cost cap cheats in F1 will get a million Euro. That sounds great, but I don’t think Bernie realizes that anyone who does so will also probably also lose their job. So I doubt this will happen.

    • Prisoner Monkeys (@prisoner-monkeys) said on 10th February 2014, 7:07

      Considering that those employees would be working for a team that is *cheating*, they would have enough motivation to quit on their own. And it probably would not be hard to find a job with another team – once one is found to be cheating, everyone else will be very careful.

  13. Girts (@girts) said on 10th February 2014, 7:43

    I believe that Fernandes is simply looking for excuses. Kovalainen drove for him for three years and continued to help the team in 2013, yet Fernandes is judging Kovalainen’s potential by two races that he spent in an unknown car? Come on. In 2013, Caterham never reached the same heights as they did when Kovalainen was driving for the team. Marussia showed more decency when they dropped their best driver ever.

  14. Corrado (@corrado-dub) said on 10th February 2014, 8:27

    Newey & Co., get ready ! You’re toasted ! Ahahaaaaaaaaa

  15. andrewf1 (@andrewf1) said on 10th February 2014, 9:05

    In other news, Bernie has lost his marbles. though this is kinda old news.

    Yes, let’s turn Formula 1 into an even bigger soap opera, CSI:Ecclestone and farce to laugh at. We’ll end up with ”whistleblowers” going directly to the team instead to get an even bigger reward for not ratting out and also headlines such as ‘Presumed F1 whistleblower found badly injured in hotel room. Visited previously by 3 anonymous figures wearing Red Bull outfits’.

    • Prisoner Monkeys (@prisoner-monkeys) said on 10th February 2014, 10:12

      @andrewf1 – There is a name for that: extortion. If the employee in question is only looking for a pay day (rather than the spirit of sportsmanship), they would go to the FIA. Going to the team and asking for money in exchange for silence would result in a criminal conviction. The team would simply have to report them to the police, and the claim that they were cheating would be undermined by the criminal action.

      • BasCB (@bascb) said on 11th February 2014, 7:58

        Honestly, PM, I think that in many teams the employee would indeed get that pay rise they asked for to keep things under the hood. Only when it gets personal (like we saw with Alonso and Ron Dennis in 2007) its likely that one of the sides would want to tell anyone about it.

      • Solo (@solo) said on 7th June 2014, 15:40

        if it about the spirit of sportsmanship that will make an employee go to the FIA then the 1million as reward does not make it easier for him but harder since as an honest person that doesn’t like working for cheating company he will also probably not like being treated as a guy after the 1million instead of simply doing the honorable thing.

        Of course Bernie never thought his million could count as counter-incentive because such pride of honor and sportsmanship is unknown to his pattern of thoughts.

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