Bernie Ecclestone

by Terry Lovell

  Other distinguished guests were three leading Tory Government figures – Kenneth Clarke, the Chancellor of the Exchequer, Ian Lang, the Trade and Industry Secretary, and Peter Lilley, the Social Security Secretary – who had been invited by the organisers, Britain’s Royal Automobile Club. They received none of the red-carpet treatment laid out for the Blairs, which included Cherie Blair being introduced to the top Formula One drivers and given a chauffeur-driven ride around the circuit by Damon Hill, before meeting Ecclestone in the opulent seclusion of his expansive, black motor home, whose tinted windows and video cameras to screen visitors caused it to be dubbed ‘the Lubianka’ by the media. Also present were Mosley and Ward. The four men engaged in lightweight conversation for about 20 minutes, during which time Ecclestone enthusiastically demonstrated the white-hot technology of his bank of digital television monitors, before being joined by the chairman of BMW, Bernd Pischetsrieder. Again no mention was made of tobacco sponsorship. It proved a successful flesh-pressing exercise. Ecclestone was impressed by the energetic young Labour leader. In a letter to The Times he later described Blair, by now Prime Minister, as ‘a person of exceptional ability who … would do an outstanding job for our country’.

  That autumn, with the election less than seven months away and fundraising efforts being stepped up, it was decided at the Labour Party’s new headquarters in Walworth Road, south London, to make an approach to Ecclestone. Among the key figures kept informed of earlier events were the party’s general secretary, Tom Sawyer, spin doctor-in-chief Peter Mandelson, Blair’s press spokesman, Alastair Campbell, and former pop music promoter Lord (Michael) Levy, a tennis partner of Blair’s whose fund-raising skills have raised millions of pounds for the Labour Party’s electioneering war chest. Powell was no longer involved in fund-raising strategy. It was decided that the approach would be made by Levy through Mosley. The decision to approach Ecclestone was a difficult one to make: while the Labour Party desperately needed the kind of donation that Ecclestone could make from his small change, it could not afford to be seen to be benefiting, no matter how indirectly, from tobacco company sponsors who were putting tens of millions of pounds a year into Formula One. Its election manifesto included a promise to ban all sportsrelated tobacco advertising or promotion.

  In January 1997 Mosley, who believed a generous donation from Ecclestone would do no harm to his connections in Brussels, raised the matter with Ecclestone. It was an opportune time to do so. Blair had just overruled a proposal by Gordon Brown, the shadow Chancellor of the Exchequer, to raise the top level of income tax from 40 per cent to 50 per cent if the Labour Party was elected. Mosley pointed out to Ecclestone that Blair’s action had saved him millions of pounds. It was a point not lost on Ecclestone, who that year had paid a personal tax bill of £27 million. He agreed with Mosley’s suggestion – and issued an instruction to his accountant to draw up a company cheque for £1 million against his director’s loan account and for it to be sent to the Labour Party. (Brown’s intention to raise the top level of income tax was seen by some as not so much a threat as a vote-catching ruse to attract the support of the dynamic entrepreneurs and businessmen that Blair was so keen to court as part of his business-friendly strategy.)

  Within days of its landslide triumph on 1 May, the Labour Government, determined to show the country that it had elected a Government of action who would keep its manifesto promises, began to beat the anti-smoking drum. Tessa Jowell, the public health minister, who made her reputation on the back benches as a determined anti-smoking campaigner with a Bill to ban smoking in public places, seized the enthusiasm of the day to repeat the Government’s election manifesto pledge to ban tobacco advertising. Two weeks later, on 15 May, during a House of Commons debate on the Queen’s Speech, Frank Dobson, the Secretary of State for Health, went a stage further and announced that the ban would also include all sport sponsorship.

  But, rather than do it through domestic legislation, with all the political flak it might attract, it was thought to be more politically expedient to pass the buck to the European Union and a regenerated directive banning sport sponsorship and advertising, which had been first proposed in 1982 and was now back on the agenda in Brussels. Fourteen days later Dobson sent a memo to Blair’s office seeking a clear understanding of the government’s negotiating position on the directive. It was a shift of tactic that alarmed Ecclestone and Mosley. As tobacco sponsorship at the British Grand Prix had been voluntarily banned since 1984, domestic legislation would have zero effect. But support of a ban throughout Europe threatened, they feared, a serious conflict, not least because it would prove ineffective.

  Ecclestone’s response to Dobson’s House of Commons statement was a threat to reduce the number of Grands Prix in Europe – and the first casualty, he warned, would be the British Grand Prix at Silverstone. Only the Grands Prix in Italy, Germany, Monaco and Portugal – the first two countries were too important to drop and the last two were opposed to any ban on tobacco sponsorship – would survive. ‘All our contracts with promoters and organisers worldwide state that if any country brings in legislation that in any way affects any of the teams’ sponsors – not just tobacco, whatever it might be – then we have a right to not be in that country,’ he said. It was claimed that contingency plans had already been set up in readiness for a Europe-wide ban. ‘It would be sad to lose traditional circuits like Silverstone but the World Championship is the most important thing.’ The axed European Grands Prix could easily be replaced, he added, by staging races in Morocco, Croatia, Dubai, Abu Dhabi, Malaysia, Korea and China, where there were no problems with tobacco sponsorship or advertising.

  (It was, at best, a bluff. The loss of Grands Prix in Britain, France, Spain, Belgium, Austria and Luxembourg would have created enormous problems for Ecclestone, not only for his flotation plans, which had been announced that March, but also in retaining the support of sponsors who would not wish to be seen to be associated with a manoeuvre to sidestep European law. As for the replacement Middle and Far East venues, at that time discussions with Malaysia, South Korea and China were still taking place – Malaysia was finally added to the Formula One World Championship for 1999, with China a reserve event – but the other countries were considered unsuitable candidates for political and economic reasons. Ecclestone himself would later admit that moving out of Europe was never a realistic option.)

  Ecclestone and Mosley argued that a Europe-wide ban would be pointless. Television coverage of races outside of Europe would ensure that tobacco sponsorship and advertising would be broadcast throughout member states. The obvious logic of this argument had been amply demonstrated by a legal dispute in 1992, when a court in the French town of Quimper imposed a £4.2-million fine on the Williams-Renault team for showing the Camel cigarettes logo during the Australian and Japanese Grands Prix. By being broadcast on French television, it was held to violate France’s anti-smoking laws. Team boss Frank Williams refused to pay the fine, and the court warned that it would impound the team’s equipment at the 1993 French Grand Prix. Ecclestone, as president of the FOCA, immediately announced the withdrawal of the teams from the event, and Mosley went a step further by cancelling it.

  Following urgent discussions at senior political level, legislation was hurried through by the French Government to amend the law banning television advertising and thereby permit the broadcasting of motor sport events promoting tobacco outside of France. When the news was announced, the French Grand Prix was promptly restored. This court case exposed the obvious flaw of a Europe-only directive – unless a ban on tobacco sponsorship could be enforced worldwide, in almost 200 countries where Formula One was broadcast in one form or another, it would prove unworkable. It was an overwhelming argument, combined with the massive lobbying power of the tobacco industry and, more quietly, expressed by Ecclestone and Mosley, that had succeeded in causing the previous Conservative Government to join Germany, Denmark, Holland and Greece in vetoing the European Union’s proposed directive
.

  Ecclestone and Mosley tried to strengthen opposition in the UK by claiming that a loss of Grands Prix in Europe would risk losing Britain the kudos and benefits of being the centre of the Formula One industry, as well as an estimated 50,000 jobs. Both points were something of an exaggeration. The number of jobs quoted included the entire motor sport industry, right down to the production of specialist flameproof overalls. The figure for Formula One was actually nearer 8000. Moreover, the UK would not suffer mortal damage if Formula One were to quit Europe completely. Business between the British motor-racing industry, long renowned for its advanced technical skills and expertise, and overseas companies would continue largely unaffected.

  As part of an intensive lobbying campaign, Mosley, accompanied by Frank Williams, the boss of the Williams team, and Ron Dennis of McLaren, went to Westminster to present Formula One’s case to a meeting of peers at the invitation of Lord Astor of Hever, an enthusiastic motor sport fan – Ecclestone refused to go: ‘I wouldn’t waste my time with them’ – while David Ward and senior FIA colleagues were getting ready to embark on a hectic round of lobbying calls on key political figures in Brussels and European countries on the Formula One calendar. Both Jowell, who was put in charge of a policy review, and Dobson, very much aware of the Formula One lobbying campaign, were becoming increasingly concerned that the proposed sponsorship ban could turn into a major headache for a government that in opposition had been so implacable in its denunciation of tobacco advertising.

  On 5 June Jowell attended a meeting of the European Union health council to assure delegates that the British Government was likely to support a Europe-wide ban on tobacco advertising and promotion, but, at the same time, indicated that there could be problems with sport sponsorship. Dobson reinforced the point by sending a memo to Blair 12 days later recommending that the government kept its options open on a sponsorship ban.

  In a letter to Jowell dated 12 July, Mosley once again explained the futility of a Europe-only ban, and also attempted to press home the logic of a worldwide ban but through a phased reduction in tobacco sponsorship to avoid ‘de-stabilising teams and events. If an agreed policy can be secured in Europe, then it would be possible for the FIA to apply the same agreement to all rounds of the Formula One World Championship throughout the world.’ The phased reduction would bring an end to tobacco sponsorship on drivers’ overalls, then trackside hoardings and, finally, the cars. Mosley followed up the letter with a request to meet Jowell to discuss a worldwide phased reduction linked to the EU directive. It took place on 23 September, when Mosley and Ward called at her Whitehall office. Also present was sports minister Tony Banks. Mosley went through the familiar arguments – the pointlessness of imposing a Europe-only ban, the potential loss of jobs and prestige to Britain if the Formula One industry was diminished in Europe – during an amiable meeting, but one which he found frustrating. He was not at all sure that they appreciated the full implications of the proposed directive. In the words of Ward, their ‘whole attitude was negative’. Nevertheless, Mosley agreed to send Jowell a written submission of Formula One’s case.

  Mosley gave a full account of the meeting to Ecclestone, who had been busy elsewhere seeking the support of some high-powered friends in several European governments. They included Helmut Kohl, the then German Chancellor, and Professor Romano Prodi, the then Prime Minister of Italy, whom Mosley went to see. Prodi allowed Mosley to labour through their hour-long meeting in his pidgin Italian, only to subsequently learn that Prodi, who had taught at the London School of Economics for several years, spoke fluent English. Kohl, apparently, was particularly supportive of Ecclestone and Mosley’s mission. A long-standing friend of Ecclestone’s, he was concerned about the effect of a sponsorship ban on the huge tobacco industry in Germany. Ecclestone made arrangements for Mosley and he to have a meeting with Kohl in Bonn on 28 September. It was fortuitous timing. The following month Kohl was scheduled to meet Blair at Chequers. At the meeting in Bonn Kohl reassured Ecclestone and Mosley of his support and agreed to take up Formula One’s case with the British prime minister.

  In Frank Dobson’s view, it was becoming clear that some sort of compromise would have to be reached. On 14 October he sent Blair a detailed report of the political implications of any European Union directive that did not permit at least a lengthy transitional period for Formula One. The likely backwash, in Dobson’s assessment, could cause unnecessary damage to the Government’s popularity. The report had been requested by Blair’s office in advance of a meeting due to take place two days later with three men Blair had last met 16 months earlier at the British Grand Prix at Silverstone – Ecclestone, Mosley and Ward. The meeting had been requested by Mosley, who believed the FIA was making little progress with Dobson or Jowell. In Ward’s words, they had become exasperated by ‘the serious stupidities of the Department of Health, in that they did not take seriously what we were suggesting’. He added: ‘I think they found us a nuisance, mistakenly believing that we were acting on behalf of the tobacco industry, and trying to destabilise their plans, although we pointed out bluntly that we had nothing to do with the tobacco industry.’ Both Dobson and Jowell, he said, seemed indifferent towards discussing the FIA’s phased reduction strategy.

  There can be little doubt that by this stage Blair had been made aware of Ecclestone’s £1-million donation, and that, indeed, since the general election there had been discussions of another contribution by Ecclestone – said to be for £500,000 – to the Labour Party, which, after campaign expenditure of more than £20 million, was £4.5 million in the red. With Blair was his private secretary, who was there to take notes, and Jonathan Powell. The meeting lasted for about 20 minutes, the notes of which, most unusually, were made public during the height of the ensuing storm in an attempt to clear Blair of having made any unfortunate comments or promises in support of Formula One’s position. According to the notes, Blair said he did not ‘need persuading about the basic case in favour of Formula One’ but added that he was ‘also in favour of a ban on tobacco ads’. Mosley emphasised the point that a move out of Europe to the Far East, where there would be no tobacco sponsorship restrictions, would lead to more, not less, tobacco advertising being broadcast on British television. The notes attributed Ecclestone with saying that he had put ‘a lot of effort’ into digital television and that it ‘would go with the races’ (out of Europe), with all the commercial loss it implied for Britain. At the close of the meeting Blair promised he would ‘think about’ what they had said.

  What the notes did not record, and which Mosley insists was made clear by both he and Ward, was that the EU’s proposed directive was almost certainly illegal under EU law and that the Government should stay with domestic legislation. This opinion was based on the work of Ward, who, some weeks before the meeting, examined EU laws to discover that the harmonisation of laws to improve public health is expressly excluded by its own Treaty. Mosley claims he explained this point, which had been submitted in writing in advance of the meeting, and which ‘Blair, being a lawyer, immediately understood’. He further explained that, in the event of its failure, the Government, in introducing domestic legislation, would be able to congratulate itself on being seen to have done exactly what it pledged in its pre-election manifesto. However, it seems that Blair preferred the advice of Dobson and Jowell, who reassured him that, in their opinion, the proposed directive would go through without difficulty.

  Over the next 24 hours Blair, without reference to Cabinet ministers, sent a note to Dobson agreeing that Formula One should be treated as a special case on the basis that it would not be realistic to assume that the teams could replace the scale of their sponsorship investment in the timescale that could be reasonably expected of other sports. True to his assurances to Ecclestone and Mosley, Helmut Kohl promoted Formula One’s case at his meeting with Blair at Chequers three days later, on 20 October, where he was said to have ‘exerted heavy pressure’. It was understood to have been a quid pro quo sit
uation – Blair at that time was seeking Kohl’s support for a future place on a proposed European Union central bank.

  On 24 October Jowell sent a memo to Blair, with copies to the Foreign Office, Chris Smith’s Department of Culture, Media and Sport, the Cabinet Office and UK representatives in Brussels, informing them that the British Government proposed granting Formula One a lengthy period of exemption from any tobacco sponsorship ban. By the end of the month a draft letter had been sent by Jowell to European Union countries setting out the British Government’s position, and on 4 November they were formally notified.

  The announcement, seen as a major policy U-turn by the Government, was received with a wave of criticism. By then Jowell had already phoned Mosley to pass on the news. She thought he would be well pleased. He was not, and told her so. He pointed out that it would not be applauded by the seven countries within the EU who did not host Formula One, nor would it be popular with other sports dependent on tobacco sponsorship. It was, he thought, politically maladroit. Jowell’s announcement was also seen by some inside the Labour Party as a betrayal of its manifesto pledge. And one person, aware of Ecclestone’s donation of £1 million, decided to pick up a phone and call a national daily newspaper.