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Brown demands action over "cheating" budget overspend

NEWS STORY
17/10/2022

Without naming names, McLaren boss, Zak Brown has called on the FIA and F1 to act against those teams that have exceeded the budget cap, insisting that to do so "constitutes cheating".

The American has written a letter to FIA president, Mohammed ben Sulayem and F1 CEO, Stefano Domenicali, the original of which was sent on 12 October - two days after the sport's governing body announced the findings of its financial analysis - and subsequently to the five teams (Ferrari, Mercedes, Alpine, Alfa Romeo and Haas) that did not exceed the cap.

A week later and there has been no word from the FIA as to what action is going to be taken, a move which further damages the credibility of the organisation and indeed the sport.

While there has been a furious reaction on social media, there has been nothing since from anyone within the sport, other than a brief statement of denial from Red Bull.

However, as debate continues over what punishment might lay in store for Red Bull, on social media much has been made of Ross Brawn's claim, at the time the budget was introduced, that offenders could be excluded from the championship.

Now, in his letter, Brown, without naming the team(s) concerned, cites the offence for what many see it is, cheating.

"The overspend breach, and possibly the procedural breaches, constitute cheating by offering a significant advantage across technical, sporting and financial regulations," he writes, according to the BBC.

"The FIA has run an extremely thorough, collaborative and open process. We have even been given a one-year dress rehearsal (in 2020), with ample opportunity to seek any clarification if details were unclear. So, there is no reason for any team to now say they are surprised.

"The bottom line is any team who has overspent has gained an unfair advantage both in the current and following year's car development.

"We don't feel a financial penalty alone would be a suitable penalty for an overspend breach or a serious procedural breach. There clearly needs to be a sporting penalty in these instances, as determined by the FIA.

"We suggest that the overspend should be penalised by way of a reduction to the team's cost cap in the year following the ruling, and the penalty should be equal to the overspend plus a further fine - ie an overspend of $2m in 2021, which is identified in 2022, would result in a $4m deduction in 2023 ($2m to offset the overspend plus $2m fine).

"For context, $2m is (a) 25-50% upgrade to (an) annual car-development budget and hence would have a significant positive and long-lasting benefit.

"In addition, we believe there should be minor overspend sporting penalties of a 20% reduction in CFD and wind tunnel time. These should be enforced in the following year, to mitigate against the unfair advantage the team has and will continue to benefit from."

The McLaren boss also proposes changes to the rules.

"To avoid teams accumulating and benefiting from the multiplier effect of several minor overspend breaches, we suggest that a second minor overspend breach automatically moves the team to a major breach," he writes.

"Finally, given the financials involved, a 5% threshold for a minor overspend breach seem far too large of a variance. We suggest a lower threshold, 2.5%, is more appropriate."

Amidst the deafening silence from the FIA, Brown calls for transparency.

"It is paramount that the cost cap continues to be governed in a highly transparent manner, both in terms of the details of any violations and related penalties.

"It will also be important to understand if, after the first full year of running and investigating the scheme, there needs to be further clarity on certain matters or any key learnings. Again, any insights or learnings should be shared across all teams - there can be no room for loopholes."

DEspite the furore, and the ongoing feeling that in all honesty it is virtually impossible to police the budget cap, Brown insists that its introduction was good for the sport.

"The-cost cap introduction has been one of the main reasons we have attracted new shareholders and investors to F1 in recent years, as they see it as a way to drive financial and sporting fair play.

"It is therefore critical that we be very firm on implementing the rules of the cost cap for the integrity and the future of F1."

Over to you, Mohammed.

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READERS COMMENTS

 

1. Posted by kenji, 20/10/2022 1:05

"The size of Zak Browns mouth is directly proportionate to his waistband !!!...or so it seems. Expansive, hahaha"

Rating: Positive (1)     Rate comment: Positive | NegativeReport this comment

2. Posted by yakker, 19/10/2022 13:35

"https://www.pitpass.com/72756/McLaren-expects-to-exceed-F1-budget-cap

Careful what you wish for Zak"

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3. Posted by Spindoctor, 19/10/2022 12:58

"@Max Noble - you're welcome :-)"

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4. Posted by Max Noble, 19/10/2022 0:24

"@Spindoctor - my thanks for the promotion to ant-person. Being a grub was growing old ;-)

@Hobgoblin - I do not consider it a Mercedes conspiracy - they are simply howling long and loud “Hang ‘em high!” To try and force the FIA towards the extreme end of punishments. Public outcry at anything less than stripping all points for a decade… vested interest?? Well Lewis will be 2021 WDC if RB are stripped points. Toto is fighting tooth and nail for last years’ WDC, no conspiracy, simply “Never give up!”

"

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5. Posted by Max Noble, 19/10/2022 0:19

"@Ricardo_sanchez - well, respectfully, no :-) Both Colin, and RB are seeking to “push to the utter limit”. These are F1 teams, so one can expect creative, stroke-of-genius, rule bending on *all* fronts. Why should the teams leave “money on the table” (i.e. speed) in their finances, while not leaving “speed” on the table on track?

Toto and the chorus are singing out so loud because (as I noted in articles last year) Mercedes has such a massive global empire on which to draw that they can “prove” any number they want to the FIA, importantly, within the rules! The accounting definitions will be mind bending, and seeing the spreadsheets, or more likely reports out of the ERP, which in RB’s case is most probably Oracle Financials, will tell us nothing… just as it has told the FIA nothing…

I simply cannot wait to see what the FIA, and RB finally release about this!

…on another note Zak should be careful what he wishes for… as he may trigger the creation of a rule that bites him in seasons to come…
"

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6. Posted by Ricardo_sanchez, 18/10/2022 22:20

"@max noble - Chapman looking closely at the rules to seek out ingenious engineering solutions that circumvented a particular limitation is a million miles away from RBR failing to follow the cost cap rule.

Creative accounting isn’t actually very inventive, nor is it exciting for the fans. Besides, almost invariably, when Chapman found a loophole and exploited it, the rest of the teams were up in arms and his inventions ended up being banned. I guess the equivalent here will be for the inventive bean counters at RBR to publish their spreadsheets, so we can all marvel at the way they’ve wangled catering costs into this or that column. Then the other teams can either adopt the new “invention”, or protest, or the rule can be changed.
"

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7. Posted by Spindoctor, 18/10/2022 17:27

"@Max Noble
We all know (or should do after your various forensic analyses of it) that the cost cap is a stupid, unenforceable "Rule" the explicit intention of which will be breached by most Teams employing competent accountants. It's a 21st Century sporting equivalent to the Emperor's New Clothes.

That being said, there are plenty of pretty silly and\or pointless Rules in F1 covering everything probably including how many sugars the Engineers are allowed in their morning tea. A non-trivial example: Max recently aborted a great lap because the car might not have been able to provide a 1litre fuel sample. There was no allowance for producing 900ml (minor) or only 200ml (major) breaches. Pure binary - break the rules & get punished

I have no realistic expectation that we ant-people will ever get to the bottom of this, quite the contrary. Everything will get sorted in such a way as to ensuire theb status quo ios maintained."

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8. Posted by Hobgoblin, 18/10/2022 13:47

"Yet again - how is the RB overspend a Mercedes conspiracy?"

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9. Posted by Wokingchap, 18/10/2022 10:43

"For once I agree with Mr.Brown, like others here, especially the last paragraph."

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10. Posted by Stitch431, 18/10/2022 8:33

"I see some things/problems here on which I would like to express my opinion:
1. I still miss the discussion about the fact that the FIA ​​leaked.
2. Red Bull has heard the charges and has yet to get a chance to refute them as with any other offense in everyday society.
3. I think it is a good idea in itself with regard to the proposed punishment in the event of a guilty verdict after all legal stations have had the chance to defend/prosecute have been exhausted. However, I do think the FIA has not done its job here in the first place, as there has not been any kind of punishment determined in advance. This should have been done immediately when the regulations were drawn up and they should always be equal for every single team.
4. in assessing the breach, also the fact that other teams such as Mercedes and Ferrari can spread the costs and personnel over more teams and sister companies should also be taken into account.
5. Brown is yet another Mercedes-powered team boss coming begging for punishment. Toto has them all (including the drivers) take turns saying "it has to be punished severely" in order to make it look like a lot of people agree with him...
6. Now that the punishment is not known in advance, the measures should be proposed by the FIA and should be voted upon in the same manner as before the implementation of the rule itself.
And likewise, unanimity has to be required. If that is not the case, go back to the drawing board and submit a new proposal until an agreement is reached.
6. One should also investigate the leak in the FIA ​​and fire the leaker. If it becomes clear that there is a team that has "commissioned" this, that team must also be punished for it.
7. Last but not least, in case a team, during the season, loses cars without its own fault (being torpedoed off track), they should be allowed to replace these without this being added to the year's budget.
That's my humble opinion on the matter."

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11. Posted by Max Noble, 18/10/2022 8:30

"@ancient70! - Quite agree… but… having a (respectfully expressed) opinion is too much fun to ignore! Your observation applies 100% to Zak who is busy telling the FIA what their rules should read, how they should be read, how they should be applied, and then what penalties to apply! Good grief! I believe other sports have a pile of rules to STOP team principals (team manages, head coaches, etc…) from doing this! They even paint lines on the ground to keep Soccer managers in their place! Possibly a Witches of Eastwick painted set of symbols is required to keep Zak in place..? :-) Actually Zak kinda reminds of Jack in that one…"

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12. Posted by ancient70!, 18/10/2022 8:20

"Until we have more info as to what is really going on here, every comment/assumption currently is just like throwing rocks at a black hole. For instance, say RB spent the money on luxurious portable toilets for the pit crew, now how many seconds of lap time does that equate to?"

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13. Posted by Max Noble, 18/10/2022 7:39

"@GordonG47 - As I’ve noted in my articles on the topic… the figures in the open would aid us all not one jot! We would not be able to agree the outcome any more than the teams and the FIA!

@Simon in Adelaide - Quite! The teams have acknowledged they are, like every other rule, pushing this one to the limit. The converse of all the wailing from Toto et al is “If you leave $2M unspent within the cost cap it is costing you lap time!” It is in no team’s interest to under-spend by more than a few hundred dollars…

@trackrecords - on that basis most of the races “won” by Colin Chapman would need to be deleted as he pushed to, and just beyond, the “spirit” of the rules… What does that do for us? Lance is a tragic example from another sport where drug doping is endemic. Oh hang-on, bending the rules in F1 is endemic…!

@trackrecords (take two) - Australian tax law is some of the most complex on the planet. It operates in another dimension, and requires such knowledge of the dark arts it makes Game of Thrones/House of the Dragon/Rings of Power all look like Kindergarten Cop…
"

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14. Posted by trackrecords, 18/10/2022 6:19

"@Simon in Adelaide The vast majority of UK taxpayers are under PAYE [Pay As You Earn] and don't actually have tax returns, it being dealt with by their employer. Having tax returns are mainly for the self-employed, some of whom have their own company and work for bigger companies as a 'contractor'. The advantage of the system is that the contractor can charge their own company myriad little and large expenses to reduces the tax they pay, and then bill the employer. The devious can use it hide things that otherwise would appear on the employer's accounts - like wind-tunnel work for example..."

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15. Posted by trackrecords, 18/10/2022 6:03

"Is Max F1's Lance Armstrong? Cycling needed to stop the cheating and look what they did. Just dock RBR 9 WDC points so the records will show Max was pipped by 1 point. Otherwise, it makes it look like a billionaire can pick and choose the rules he obeys. "

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