by Terry Lovell
At that moment Balestre stormed in to the control room, demanding to know why the qualifying session hadn’t been stopped. It seemed that one of the teams, who had seen the incident on their own television screen, had complained to Balestre standing nearby. Heated words followed, with the race director, an FIA vice-president, insisting that he had stopped the race and that if Balestre didn’t leave the room, then he would and Balestre could take over. His pride affronted, Balestre left the room as he had entered – in a state of high dudgeon. By the time he, as head of the FIA delegation, was due to join his colleagues for the dinner, his sulky mood had not abated. He declined to go. His absence was seen by the Japanese as an unpardonable public insult which they would not quickly forget.
Thus it was, when Mosley arrived in Japan to seek the JAF’s support, he was pushing at an open door. Like the Americans, they willingly lobbied other countries on his behalf. Shrewdly, Mosley concentrated his efforts on the smaller countries, to whom he promised to balance more fairly their interests against those of the more politically powerful European bloc. By the time he announced that he was throwing his silk top hat into the ring and standing against Balestre – a month before the election was due to be held – he believed he had the support of about 49 of the 72 member countries. He had also diplomatically overcome some concern from the traditionalist camp that he was too thick with Ecclestone by pledging to resign 12 months later if they had any cause to be dissatisfied.
In Balestre’s camp, Yvon Léon and senior FIA officials, although obliged by the rules of office to remain strictly impartial, began working energetically, albeit belatedly, to whip up support for their leader. Their reports back to Balestre must have buoyed him considerably. They suggested that he had the overwhelming support of member countries. Less than a week before the election Balestre was sufficiently gung-ho to announce that he did ‘not expect a strong challenge from Mr Max Mosley, who has not yet personally informed me of his candidature’. For mischievous measure, he added: ‘I find this disloyal from someone whom I introduced into the FISA, and the information reaching me from all sides proves that he is indulging in a campaign aimed at destabilising the FISA and brainwashing the member countries with false truths.’1 On the night before the election Balestre was confidently putting the final touches to his victory speech. An analysis of a complete list of countries’ voting intentions in his possession assured him that he could count on the support of every country bar four – two who intended to vote for Mosley and two who might. But he was in for a major shock.
Ecclestone, who by now had revised his opinion on Mosley’s chances, thought so, too. On the morning of the election he went to Balestre and suggested that he should offer a power-sharing deal to Mosley in return for standing down. Balestre instantly dismissed the suggestion, such was his certainty of victory. Mosley had been unaware of Ecclestone’s approach, but, reflecting years later, he believed that he would have been in a very difficult position if it had been made. ‘I hope I would have had the courage to have said no,’ he said, ‘but I was by no means sure that I was going to win. It was absolutely in the laps of the gods.’
On 9 October 1991, at the FISA’s plenary conference in Paris, Mosley was elected the ninth president of the FIA’s sporting division by 43 votes to 29, six votes less than his straw poll had indicated he could count on. After 13 years as the president of the FISA, Balestre nobly announced his own defeat in the grand conference room of the Automobile Club de France, which was bedecked with flags of the FISA nations. A former associate described Balestre as being ‘terribly upset by the result. He didn’t expect Max to topple him. He didn’t think it would happen.’ Few did. He had become an iconic figure within motor sport, considered by some to be simply too powerful to be brought down.
Defeat for the proud Frenchman, who tried, unsuccessfully, to force an election rerun, would have been all the more painful because of the way in which so many countries had misleadingly concealed their true voting intentions. For all the criticism of Balestre, he was described by a former FIA official as ‘a sincere man [who] always thought he was doing right. He made a lot of mistakes, but not with malice. He just wanted to get his point over and get it through. But he was not pursuing any personal wealth. He did not make money out of the FIA.’ In accordance with his electioneering pledge, the new president’s first official act was to hand in his resignation to Yvon Léon, to take effect at the following year’s plenary conference. If he failed to live up to expectations, he was ready to be voted out, a shrewd move that helped to sway a number of crucial votes. The following year, 1992, he was duly re-elected with ease.
In December 1990, some 11 months before he was elected president of the FISA, Mosley had decided to end his commercial interests in motor sport. He resigned as the sole director of a company called Tamastar Ltd, which he had formed in June 1976, around the time he became the FOCA’s legal adviser following his departure from the March team, to offer a motor-racing consultancy service. His wife, Jean, was listed as his partner. He described himself as ‘a professional adviser to the motor-racing industry’, but it seemed few sought his advice. Minimal activity passed through the books of the Oxford-based company until the mid-eighties, when Ecclestone became a director in 1986, a position from which he resigned a year later. They had in mind a joint venture outside of motor sport. To that end they set up a subsidiary building company called Logicgap Ltd, but the project proceeded no further. Mosley described the venture as ‘moderately successful’, yet, two years later, the company was dissolved without trading.
Between 1987 and 1989 Tamastar’s turnover increased dramatically to £246,000, £283,000 and £1,293,000. Mosley’s salary, including dividends, during this period was £98,000, £435,000 and £416,000. In 1989 the company also paid out £652,000 in consultant’s expenses, Mosley being the consultant. This turn of good fortune was due solely to his work as president of the Manufacturer’s Commission, for which, of course, Balestre had arranged for the manufacturers to provide a salary. He insisted that there had been no conflict of interest between his ownership of Tamastar and his role as president of the Manufacturers’ Commission. ‘Everyone concerned knew who did what and for whom. The presidency of the Manufacturers’ Commission was never a full-time job.’
Mosley’s role within Tamastar was filled by his 49-year-old wife, Jean, who had been involved in the company since its formation and was its only other member. The company was soon in financial difficulties, running up losses of £113,000 by 1992. It arranged a loan of £75,000 from its pension fund, which was repaid by Mosley as part of an interest-free loan of £90,000. It did nothing to turn the business round, which was now specialising in boat hire. In 1993, although the company had ceased to operate as a motor-racing consultancy, Mosley, now the president of the FISA and shortly to become the president of the FIA itself, engaged the services of Tamastar at a cost of £20,000, the company’s sole source of revenue for that year. The payment, said Mosley, was for consultancy services that he personally required and for which he paid.
Whatever her skills and expertise, Mrs Mosley, the sole member of the company, was certainly not qualified to act as a motor-racing consultant. Her services were effectively non-existent, although Mosley produced an interesting explanation of her role to justify the payment. ‘As I was married to her before I even saw a motor race, she is probably the one person I talk to about all these things and I can completely trust in a very difficult world. The fact is that we talk about what is going on, and who is up to what, and how it is all happening, probably most days … not to her great pleasure because she is not that interested … but it is perfectly legitimate for me to say that I consulted her. Who else do I consult? Particularly if I am not happy about something going on with Bernie. There is nobody else I can talk to. So I think it is a little unfair to say that her services were non-existent.’
One of Tamastar’s few clients was Simtek Research, which Mosley had set up with 23-year-old Nick Wirth, a c
ollege friend of the son of Robin Herd, a co-founder, with Mosley and others, of the March team. After graduating with a first-class honours degree in mechanical engineering and naval architecture from University College London and winning the Institute of Mechanical Engineering’s prize for the best final-year thesis, Wirth spent a brief spell with March before setting up Simtek Research with Mosley in 1989 to provide research and development services to motor manufacturers.
Its start was promising, with an annual turnover of £1.76 million and pretax profits of £867,000 in 1990. But, despite obtaining development and design work from BMW AG, BMW Motor Sport, Ligier and the French Government, it was short-lived, incurring losses until 1993, when it effectively ceased trading. From 1991 it had one other important customer – the FISA, of which Mosley had just been elected president. The company, which specialised in simulation and wind-tunnel experiments, carried out a variety of confidential work, which included analysing the safety aspects of various categories of cars. The work, said Mosley, was confidential because: ‘I didn’t want anybody to know the outcome. It is one thing to know something and it’s another to be able to do anything about it.’ The work had been obtained for Simtek Research through the efforts of Mosley, who, despite being president of the FISA, did not resign as a director of the company until December 1992. Tamastar also benefited through his association with Simtek. During 1990 and 1991 it was paid a total of £35,000 for its consultancy services. As Mosley had resigned from Tamastar in December 1990, the consultancy work in 1991 must have been undertaken by the inexperienced Mrs Mosley. Mosley insisted that there had been no conflict of interest.
Ambitiously, Wirth decided to move into Formula One in 1994 with his own racing team – Simtek Grand Prix Ltd. Unfortunately for Wirth, a personable and engaging character but without the ruthless business skills to survive in Formula One, he fared no better here. By the Monaco Grand Prix in 1995, his company was in dire financial difficulties, despite loans of at least $3 million earlier that year. Less than two months later the assets of both Simtek Research and Simtek Grand Prix Ltd, with combined debts totalling almost £6 million, went under the auctioneer’s hammer.
Mosley declines to discuss his personal wealth, which appears to be based on money that ‘finally percolated down’ through his family, proceeds from the sale of the March team, and ‘business with Bernie outside of Formula One – in property mainly’, despite Logicgap Ltd effectively being a dormant company. Nevertheless, even though his position with the FIA is non-salaried, he enjoys the prestige and luxury of a mews home in a fashionable part of central London and a most comfortable lifestyle.
Following his re-election to the presidential office of the FISA in October, 1992, two months later Mosley moved to ring-fence the power source of his position by creating an FISA Financial Council, of which Ecclestone was appointed a member, on the shrewd principle that when you take over a business the first thing you do is grab the chequebook. He was firmly of the opinion that Balestre, who had taken his defeat badly, was quite capable of attempting to leave him isolated and powerless by ensuring that his cronies on the FIA’s Finance Committee, which controlled the FISA’s budget, outvoted him – he was now a member of the committee by virtue of his office – whenever it suited his book.
The Financial Council, though, never met. It was made redundant by an improvement in the relationship between the two men and the threat that Mosley had perceived gradually lost its force. Balestre, who had been dissuaded from attempting to recapture the FISA presidency by standing against Mosley in the 1992 election, had become a dispirited figure with failing health. The fighting disposition of the once fearsome and belligerent Frenchman, now past 70, had become diminished over the years and his sense of invincibility damaged by his defeat.
Mosley recognised the time was right to move for the ultimate seat of authority within motor sport – the presidency of the FIA itself. Over the next few months, as the relationship between the two men continued to improve, Mosley proposed that, if Balestre should agree not to stand for re-election, which fell due in June 1993, he would be assured of an authoritative and prestigious position within the FIA. That position would be as president of the Senate, a powerful body Mosley planned to introduce if elected, as part of a major restructuring of the FIA hierarchy. It was a proposal designed to appeal to the pride and pomp of a conceited man. Balestre agreed.
Mosley was thus left with the formality of announcing his intention to stand in a contest that appeared to be very much a one-horse race – until, that is, a month before the election, when the distinguished figure of Jeffrey Rose, an FIA vice-president and chairman of Britain’s Royal Automobile Club, put forward his name. His decision to do so was first prompted by what happened at a breakfast meeting some weeks earlier with Mosley and Ecclestone at the RAC’s Clubhouse, its London headquarters, which lasted from 8.30 to about 10 am, and which had been requested with some urgency by Ecclestone. He informed Rose that Mosley was going to be the next president of the FIA. Could Mosley count on the RAC’s support?
Rose, somewhat startled by the news, declined to pledge the RAC’s vote without first consulting his colleagues. But even at that moment he thought it unlikely. As a founding member of the FIA, which was established as a federation of motoring clubs and associations, he couldn’t see how the RAC could support someone who represented neither. There was also some concern within the RAC that Mosley was too close to Ecclestone and his commercial interests, particularly in Formula One. The RAC decided it was unable to give Mosley its support. Instead, it was agreed by his colleagues that Rose himself should stand, on the motoring club platform: here was someone, a leading figure in a leading motoring club, who could be sure to represent the interests of all motoring organisations and associations worldwide.
Now it was Rose’s turn to go to Mosley. If he would withdraw his candidature and pledge his support, he would be given control of motor sport, while he, Rose, concentrated on road-car issues. Mosley declined for two reasons. He couldn’t be sure that his authority would be unfettered, but, more importantly, Mosley himself wanted to get more involved in promoting road safety and environmental legislation and political activities in Brussels. ‘That is what really interested me,’ said Mosley. ‘It is satisfying because you can work like hell in Formula One and you maybe save one life every five years, whereas road safety really is very, very significant. You are talking about thousands of lives over a reasonable period. That’s what turns me on, in the same way that money turns Bernie on.’
With Mosley’s response went Rose’s main hope. A quintessential establishment figure who remained chairman of the RAC until 1998, 63-year-old Rose soon discovered that other and no less influential clubs had already lined up behind Mosley, with the active support of Ecclestone, and that the smaller clubs were bound to follow this lead. The election of Balestre’s successor, Rose concluded, had already been decided. On the day of the election, 10 June 1993, he addressed the FIA assembly, explained the RAC’s position and withdrew his name, leaving Mosley to be elected unopposed. That October, when Balestre formally stood down, Mosley, as head of an organisation representing some 150 national motoring organisations on five continents, became president of the FIA, and one of the most influential political figures in the motoring world. He was now uniquely placed to work more effectively and efficiently with the vice-president of promotional affairs.
One of Balestre’s final duties as president of the FISA was to negotiate in 1990 the share of the television revenue the FIA would receive for the duration of the next Concorde Agreement, to run from 1992 to 1997. As coverage of Formula One continued in popularity during the eighties, its television rights had become increasingly important to a governing body whose principal source of income had once come from homologation fees. In 1987, the year when Ecclestone was appointed the FIA’s vice-president of promotional affairs, the FIA, coincidentally, was for the first time to enjoy a 30 per cent share of its commercial rights.
> However, over the next couple of years Balestre was said to have been disappointed to find that the anticipated increase of riches had failed to occur. In fact, in 1990, its percentage share revenue produced a return of no more than $1 million. According to Mosley, Balestre ‘had every reason to fear for future TV rights’ because he had seen the collapse of Canal 5, the French television company owned by his friend Robert Hersant, and, as a result, the loss of a lucrative television contract. He was also concerned, added Mosley, about ‘currency risk’, preferring a fixed sum in francs, the currency of the FIA’s expenditure, rather than an uncertain percentage in US dollars.
It was for these reasons that Balestre decided to listen to a proposal from a company called Allsopp, Parker & Marsh Ltd (APM), whose activities included advertising, promotion and the marketing of motor-racing events, and of which Patrick ‘Paddy’ McNally, the long-standing friend and close business associate of Ecclestone, was co-owner. The company claimed to have a solution to Balestre’s anxiety. It would, he was assured, eliminate all risk to the FIA: in return for its 30 per cent share of television revenue, APM would guarantee a fixed annual royalty payment of at least $3 million. Although Balestre knew little of McNally’s company, he nevertheless agreed to its proposal. It was not long before he came to believe that he had made the right decision.
In 1992 the FIA’s first payment from APM was $5.6 million. By 1994 it had reached $7 million, and $9 million by 1996, the final year of the contract. The FIA, it seemed, had been smiling all the way to the bank, with Balestre the toast of Place de la Concorde for his shrewd judgement. But, based on figures supplied by a Formula One team boss and documents leaked from within the FIA and the French tax investigation authority, the Paris-based Direction Nationale des Vérifications de Situations Fiscales, which began an inquiry in 1994, the FIA should have done a good deal better. Far from the uncertain revenue flow that Balestre believed was likely to be generated, television revenues, thanks to Ecclestone’s efforts, soared. As McNally put it: ‘No one had taken into consideration the negotiating abilities of BCE [Ecclestone].’ Between 1992 and 1996 they totalled an estimated $341 million, of which $102 million – 30 per cent – went to APM. The FIA’s share, under the terms of the fixed royalty deal, came to no more than $37 million. The FIA had ended up $65 million the poorer. And that figure did not include loss of television revenue from non-Formula One championships or other commercial activities.