America's Cup: Hearings put heat on team Oracle

Photo / Oracle

It might be high irony but on August 27 (NZT) Oracle Team USA could suffer a significant blow to their defence of the America's Cup over cheating allegations - because of a rule put in place to rein in free-speaking Emirates Team NZ CEO, Grant Dalton.

The rule, unofficially dubbed "the Dalton clause", was put in place last year and could see OTUSA cop what might be the biggest penalty ever given to an America's Cup defender. The Dalton clause could allow a team penalty to be added to any given to individuals.

The smart money in this regatta is going on the expulsion of between one to three OTUSA team members, possibly members of the shore crew. The jury could also decide to censure OTUSA - with their options ranging from a metaphorical smack on the hand to a fine, docking points in the America's Cup match or disqualifying them from a race or races.

This all stems from the contention that illegal lead weights were found in all or two of the three OTUSA AC45s used in the lead-up event, the America's Cup World Series sailed in 2012-2013. The jury have been holding an investigation into that - and their announcement yesterday is essentially a signal that they feel there is enough of a case to answer to require two hearings.

One is to hear allegations of gross misconduct against an individual or individuals under Rule 69; the other under Article 60 to see if OTUSA has breached the Dalton clause, concerned with protecting the reputation of the Cup.

The jury's deliberations are held in camera and are protected by a confidentiality order. However, the feeling among many sailors and America's Cup observers is that the jury will also move to penalise OTUSA as a team.

If they dock points or disqualify them from a race or races, that will hand a lead to the challenger - most likely ETNZ - even before the racing starts, a unique twist in America's Cup history.

The irony is contained in the fact that Article 60 of the Protocol (the core document establishing the major elements of the Cup and its regattas) did not exist before last year. At the time, Dalton was relaying an often critical analysis of the shortcomings of the 34th America's Cup - because of costs, the likelihood of a minimal number of challengers and the flawed vision of the change to complex multi-hulls. He has since been proved right, but Article 60 remains in force.

Part of Article 60 states: "... each Competitor shall not...make or cause to be made, or authorize or endorse, any public statement, or engage in any other act or conduct or any activity that is prejudicial or detrimental to or against the welfare or the best interests of the America's Cup, or the sport of sailing, or that may impair public confidence in the honest and orderly conduct of the America's Cup, any Event, or in the integrity and good character of any Competitor, Official, selected venue, sponsor or other commercial partner of the America's Cup.

"Conduct contrary to the welfare or the best interests of the America's Cup includes, but is not limited to, public statements that unreasonably attack or disparage a regatta related to the America's Cup...or the commercial viability or integrity of the America's Cup or any of its regattas or events, but responsible expressions of legitimate disagreement are not prohibited."

The case against individuals essentially allows the jury to assess whether a person or persons from a competing team has committed "a gross breach of a rule, good manners or sportsmanship, or may have brought the sport into disrepute."

That is the judicial umbrella under which the person or people who put the lead weights on the AC45s - if that is proven - could be excluded from the regatta.

Talk from within America's Cup circles is that two or three OTUSA team members could be involved. However, the key point of discussion is how far up OTUSA's chain of command the jury's hand can reach.

A common refrain through the AC45 saga has been how such modifications could be made to boats without skippers and team management knowing in what is probably the most tightly regulated sport in the world, along with golf.

OTUSA CEO Sir Russell Coutts has consistently claimed that skippers and management were not involved and the likelihood is that the Rule 69 hearing will only extend over a few individuals. The jury interviewed 16 OTUSA team members and five people from regatta controllers, America's Cup Race Management, before deciding to hold the two hearings.

However, Article 60 - the Dalton clause - gives the jury extra powers of inquiry, not just whether OTUSA engaged in activity detrimental to the Cup but also whether they failed to use their best efforts to ensure no one acted in such a way.

It is the last half of that sentence which, in theory anyway, could allow the jury to punish any perceived "corporate responsibility" shortcomings.

The Rule 69 hearing will be heard first, on August 27, with the Article 60 hearing following - but with evidence gained from the first hearing admissible in the second.

It's a difficult situation for the jury. The burden of proof will be considerable. Sailing has an active and fiercely guarded code of conduct which they are prone to protect.

If they come down heavily on Oracle Team USA, they could end up prejudicing the regatta. So expulsion of OTUSA, for example, seems off the table. But they will also not want to apply any punishment too lightly, lest they are accused of allowing OTUSA too much latitude.

Luna Rossa skipper Max Sirena said yesterday: "I am not looking for that [punishment] but if someone has done something wrong, someone has to pay."

Misconduct concerns

Why are there two jury hearings?
The jury are attempting to rule on the discovery of illegal lead weights in Oracle Team USA's 45-foot AC45 catamarans used in an America's Cup warm-up event, the America's Cup World Series.

What is the basis of the first hearing?
To discover if there has been any gross misconduct by anyone associated with OTUSA - directed at individuals.

What is the basis of the second hearing?
To consider whether OTUSA have besmirched the reputation of the America's Cup or failed to ensure that no representative of OTUSA did so - directed at the team.

Who is involved?
The jury has so far interviewed 16 members of OTUSA and five members of America's Cup Racing Management (the body in charge of the regatta, as opposed to the event).

What could happen?
Individuals could be expelled from the Cup. Oracle Team USA could be found innocent or expelled from the Cup though a more likely course seems to be that they would be docked points or races in the America's Cup match. Other options include being fined or censured (without penalty).

How will this affect Emirates Team NZ?
If OTUSA are expelled, Team NZ win the Cup. However, a more likely outcome is some form of censure or penalty if OTUSA are found to have transgressed. If they are docked points, Team NZ would enter the Cup match with a pre-ordained lead.