Bernie Ecclestone

by Terry Lovell

  Marian’s relationship with sister-in-law Slavica was also virtually non-existent, unlike the one she had known with her brother’s first wife, Ivy, the former GPO telephonist. She was not invited to their wedding. ‘Don’t be silly… I don’t think anyone was invited.’ She had, she said, seen little of Slavica over the years, and even of those occasions she was vague on detail. She was not keen to discuss her sister-in-law any further. ‘I am not going to say anything that I might regret I’ve said. I’d rather leave it at that.’

  There is a further manifestation of Ecclestone’s working-class pedigree in the boast that his word is his bond. Integrity, he has owned, is what he admires most, and it is, he insists, embodied in the shake of his hand. This was the customary way of doing business in Ecclestone’s years as a second-hand car dealer, when deals, in cash or kind, and favours proffered or promised, were agreed on a nod of the head. To default was a serious offence, commercially and possibly physically. Yet, as recorded, a close examination of Ecclestone’s earlier business activities confirms there is evidence to demonstrate that his reflections of what was the exact nature of his word are not always reliable.

  A more recent example provoked the criticism of a High Court judge. It followed an unsuccessful action by a South Korean construction company whose principals went to court to settle a contractual dispute with Ecclestone. The company had started work on a motor-racing circuit in Kunsan City to stage Formula One Grands Prix from 1998 to 2002. Under the terms of a contract signed in April 1996, Sepoong Engineering Construction Co Ltd agreed to pay Ecclestone’s company Formula One Administration (FOA) annual payments of $11.75 million to be increased each year by 10 per cent.

  Six months later a letter of credit for the first payment was issued to the benefit of FOA. However, a downturn in the South Korean economy caused a delay in the construction work, a situation worsened, claimed Sepoong, by a dispute over broadcasting rights and tobacco advertising. It led to the proposed Korean Grand Prix missing the 1998 calendar. It also led to Ecclestone calling in the letter of credit. In March 2000 Sepoong attempted to recover the sum in a High Court action. Although Justice Longmore found, ‘with some regret’, in favour of Formula One Administration, he said that Ecclestone had agreed that the letter of credit could be terminated and a new one opened at a later date if a Grand Prix took place. In the meantime, FOA would not enforce the letter of credit. ‘In fact,’ said the judge, ‘FOA was doing exactly that at the same moment Mr Ecclestone was agreeing that it was not. In this respect, I do have to record that Mr Ecclestone has not been a man of his word.’

  He also commented on Ecclestone’s unusual method of business and its effect on his recall of events. ‘He conducts much of his business by way of meetings without making notes and his memory of what occurred at such meetings is somewhat hazy. He did not prepare himself in any detail and, when asked about documents, had to take some time to familiarise himself with them. He thought he knew what he would or would not say or do in various situations and could thus easily convince himself that he did or did not say or do something if it was different from what he now thinks he would have said or done. I have some reservations about any evidence from him that is not supported by other evidence in the case.’

  But Ecclestone firmly believes that Judge Longmore’s public admonishment was unfair. Part of the dispute related to what – or wasn’t - said at a meeting with two executives of the Sepoong Group, of which the Sepoong Engineering Construction Co Ltd was part, and You Jong-keun, the then governor of the North Jeolla province, where the circuit was to be constructed. Ecclestone insists that the three men had lied in their respective accounts, and that You, who gave evidence by video-link, and, whose credibility was enhanced by a distinguished international profile, had been particularly untruthful.

  Certainly Judge Longmore might well have seen the testimony of the three men – and that of Ecclestone – in a different light if it had been known at the time that three years earlier, in 1997, You had accepted a $330,000 bribe from the Sepoong Group in return for giving local authority permission to re-zone the land for the construction of a grand prix track. In March 2002 You was arrested and, in the following September, jailed for five years and fined $253,000 by the Seoul District Court. Said Ecclestone: ‘I think that says all that needs to be said about my dispute with them. The fact is I was outnumbered in court. If the judge had known what had really been going on between them, I don’t think he would have said what he did about me.’

  Ecclestone attributes his success to two four-letter words – hard work. Or as he put it: ‘Everyone has had exactly the same opportunity to do what I have done. The only reason that they have not done it is probably because they … have been sitting on their arses.’ Possibly. But, in addition to his ruthlessness and punishing, self-driven work schedule, they would have also required, above all, his instinctive sense of opportunism. That, plus being, as he admits, in the right place at the right time. Ecclestone has never been an innovator, a creative person bursting with ideas, able to create the product and the market. Throughout his life his true skill has been in picking low-hanging fruit.

  It began way back in the late 1940s, when an arrogant and sharp kid in his late teens walked into Frederick Compton’s second-hand car business to take it over. And it continued through the quick-buck property deals that founded his early wealth at a post-war time when such deals were possible and which funded his move into Formula one; the purchase of an ailing Brabham team whose success was due to others, not least Gordon Murray; the control of the constructors, whose power through FOCA he exploited to subdue the national sporting authorities, promoters and circuit owners; and, finally, the FIA establishment, which he and Mosley came to dominate. The commercial promotion of Formula One through sponsorship, which propelled the constructors into a new age, came about through the likes of Colin Chapman, BRM and Philip Morris; it was others who saw the potential of the money-spinning trackside signage, retail concessions and corporate hospitality market; it was Marlborough who turned Formula One into a multi-million-dollar sponsorship industry; it was Mark McCormack who first spotted the potential riches of television, and, even then, it was Christian Vogt who took Ecclestone’s television company out of the Eurovision arrangement for the vastly superior country-by-country deals which led to the development of his highly lucrative digital television company; and even the flotation of Formula One, whose assets consisted of little more than contracts with television broadcasters worldwide, was the idea of Marco Piccinini. But it was Ecclestone, in the right place at the right time, who exploited it all so affectively and lucratively.

  The attempted flotation of Formula One’s commercial assets was the one time when Ecclestone stood alone, unable to enlist the power of FOCA or the FIA to use the terms to his advantage, and it proved a resounding failure. Out of that disaster, and to his rescue, came the $1.4 billion Eurobond sale and the 50 per cent sale of SLEC Holdings to EM.TV for $1.65 billion to make his family trust $2.69 billion the richer, all of which was engineered by merchant banks he was now forced to trust to do it their way. Only by looking behind the eulogising headlines and articles is it possible to strain fact from media myth. As a former team owner and associate put it: ‘There is a lot of the King’s clothes about what Bernie has done. When you really look at it, when you get all the newspaper crap out of your eyes, it’s been the support and hard graft of others who have made it work, from the teams down. What Bernie did was to cash in on it all so ruthlessly.’

  Predictably, Max Mosley sees Ecclestone in quite a different light. He is the man who over 30 years transformed ‘a niche sporting contest with a world-wide following and virtually no television coverage into a world-famous branded competition with a global following plus a television audience rivalled only by the football World Cup and the Olympic Games. This has been an extraordinary feat, bearing in mind the state of Formula One in 1969 and its lack of importance to, for example, sports car racing, not to mention the
very weak position which motor sport held at that time in the general market for international sport. The person mainly responsible for this transformation has been Bernie Ecclestone. His success has made him rich, but his efforts have also enriched the team owners and drivers. There is nothing wrong with that – indeed, it is exactly what should have happened. In my own case, I have played a modest role in this thirty-year process and I, too, have benefited, although in a different way to Bernie. But then I started life with different problems to him.’

  Indeed he did, and most notoriously these problems include exposure of Mosley’s involvement in an orgy, claimed by British tabloid the News of the World to be Nazi themed which led him, at the age of 68, to the verge of disgrace. He was video-filmed in ‘a vice dungeon’ in London with five prostitutes – one was the wife of an MI5 officer who had secretly filmed their activities with a camera hidden in her bra, the contents of which she later sold to the newspaper – with whom, for a reported fee of £12,500, he allegedly indulged in Nazi role-playing sex sessions.

  Over the following days, Mosley ignored mounting criticism of his behaviour from influential motor sport figures and Jewish Holocaust groups, who demanded his resignation, which he refused to tender on the grounds that what he did was legal, harmless and consensual, and did not involve any Nazi theme whatsoever. In a letter to the FIA’s 222 world-wide member clubs, the FIA Senate, the FIA’s legislative assembly, and members of the World Motor Sport Council, he claimed that he had been the victim of ‘a deliberate and calculated personal attack’ as the result of ‘a covert investigation’ into his private life and background. The letter stated that he had received ‘a very large number’ of messages of support from people within the FIA and motor sport which ‘had underlined that his private life is not relevant to his work and that he should continue in his role as FIA president. I shall now devote some time to those responsible for putting this into the public domain but, above all, I need to repair the damage to my immediate family, who are the innocent and unsuspecting victims of this deliberate and personal attack.’ He announced that he had begun legal proceedings against the News of the World for invasion of privacy.

  When the story broke, Ecclestone, while describing himself as being ‘shocked’ by the allegations, was sympathetic to Mosley’s plight. ‘Assuming it’s all true,’ he said, ‘what people do privately is up to them. I don’t honestly believe [it] affects the sport in any way. Knowing Max, it might be all a bit of a joke. You know, it’s one of those things where he’s sort of taking the piss, rather than anything against Jewish people.’ It appeared to be a laudable vote of confidence in a friendship stretching back 40 years, until leading F1 manufacturers, much concerned by the world-wide attention that Mosley’s involvement in the scandal was receiving, began to put pressure on Ecclestone to distance himself from the furore.

  Mosley went on the offensive by announcing that an extraordinary general assembly of the FIA would be held in Paris on 3 June when a vote of confidence by member clubs in his presidency would be held by secret ballot. The announcement gave Ecclestone the opportunity to appease the F1 manufacturers and other key figures in sport who were calling for Mosley to resign. He personally appealed to Mosley to stand down, an invitation that was declined. In a BBC interview Ecclestone said it was ‘regretful’ that Mosley had decided not to make that decision. ‘He should resign out of responsibility for the institution he represents, including F1. Everyone in a position of authority across F1 rings me to say he should leave. He’s been a friend for 40 years. I’d hate to see him forced to go [by being voted out], after all, he has done for the sport. The big problem is that he can no longer represent the FIA worldwide because of these incidents. People would no longer be comfortable speaking to him in the same way.’

  This was exemplified in a letter from Sheikh Salman bin Hamad Al-Khalifa, the Crown Prince of Bahrain, to Mosley in which he said that it would be ‘inappropriate’ for him to attend the next Bahrain Grand Prix, a showcase event of the F1 calendar. An invitation to Israel was also rescinded by Ghaleb Majadle, the Israeli Minister for Science, Culture and Sport, who had asked Mosley to visit Israel to advise on the development of motor sport in the country, believed by the FIA, ‘to be a major addition to motor sport in the region.’ Furthermore, F1 manufacturers – BMW, Ferrari, Honda, Toyota, Mercedes-Benz and Renault – postponed a meeting with him to discuss engine changes in F1, claiming that they needed more time to discuss the proposals. They requested the meeting be put back by two weeks – after the vote of confidence on 3 June.

  Ecclestone stepped up the pressure on Moseley on two fronts: through the FIA and the F1 teams. As a vice-president of the FIA, he wrote to its 222 member clubs critical of the letter sent by Mosley in which he implied that his departure would not be in the best interests of the organization. Ecclestone had publicly described Mosley’s letter as ‘a silly mistake.’ And at the Spanish Grand Prix in April, he said at a meeting of team principals that he would add his name if all present – Ferrari, BMW Sauber, McLaren-Mercedes, Red Bull-Renault, Toyota, Williams-Toyota, Renault, Honda, STR-Ferrari, Force IndiaFerrari – agreed to sign a letter calling for Mosley to resign. Only three declined: Ferrari, STR-Ferrari and Williams. The letter was not sent to Mosley, but it indicated the lengths to which Ecclestone was now prepared to go to see his former consigliere removed from the FIA.

  By now, it had become a remarkable public row, once utterly unthinkable between the two men who, during the early days of F1, were seemingly joined at the hip and whose credibility and integrity depended on the silence of the other. If they were to turn on each other in public, the effects of the fall-out would be atomic. Mosley survived, with a vote of 103 for and 55 against, seven abstentions and four null papers. The voting represented a 61 per cent majority.

  With the controversial FIA vote behind him, Mosley began preparing for a more searching judgment of his sexual predilections – in London’s High Court where on 7 July, before Mr Justice Eady, and represented by James Price QC and junior counsel David Sherborne, he sought exemplary punitive damages from the News of World for publishing articles which, it was claimed, constituted an invasion of his privacy under Article 8 of the European Convention on Human Rights, which states that every person has a right to privacy in their private and family life, home and correspondence. It was the first time that the European law has been tested in such a sensational and high-profile case.

  Mosley did not deny that he took part in a five-hour sado-masochistic session with five dominatrices at a flat in Chelsea, but vehemently denied that any Nazi role-playing took place. Four of the prostitutes supported Mosley’s evidence during the five-day hearing, while the fifth, Woman E, who had secretly filmed the session and whose evidence was considered crucial to the News of the World’s case, failed to appear because she was ‘unwell’.

  On Thursday 24 July Justice Eady delivered a verdict in favour of Mosley, before awarding him damages of £60,000 and costs estimated at £700,000. In a judgment comprising more than 200 paragraphs, he commented on the ‘reckless’ risks to which Mosley sado-masochistic sex sessions exposed him. Said the judge: ‘Many would think that if a prominent man puts himself, year after year, into the hands (literally and metaphorically) of prostitutes or even professional dominatrices, he is gambling in placing so much trust in them. There is a risk of exposure or blackmail inherent in such a course. To a casual observer, and especially with the benefit of hindsight, it might seem that [Mr Mosley’s] behaviour was reckless and almost self-destructive. This does not excuse the invasion into his privacy.’ All involved, he added, were well known to each other and, as part of a sado-masochistic ‘scene’, were expected to keep their activities secret. Mosley therefore had a ‘reasonable expectation of confidentiality.’

  A sombre Mosley said after the hearing: ‘This judgment has nailed the Nazi lie upon which the News of the World sought to justify their disgraceful intrusion into my private life. I hope my case will help deter n
ewspapers in the UK from pursuing this type of invasive and salacious journalism. I have learnt first-hand how devastating an invasion of privacy can be and how readily papers like the News of the World will destroy lives in the knowledge that few of their victims will dare sue them. I want to encourage a change in that practice.’ Mosley announced that he would be donating the £60,000 damages to the FIA Foundation to further its work for road safety and environment.

  But even as he was returning to the tranquil refuge of his luxury apartment in Monaco to recover from the two most gruelling and career-threatening battles of his term as president of the FIA, there were fresh calls from him to stand down from office, which, while they came from old adversaries such as Jackie Stewart, Eddie Jordan and Paul Stoddard, and which Mosley will instantly contemn, nevertheless echo the opinion of other influential and powerful figures within the F1 industry who have longed desired the departure of Mosley.

  It is expected that Mosley will now assume a much lower profile until his scheduled retirement in October 2009, leaving the FIA frontline spotlight to the likes of his two most trusted confidants – Keith Woods, the Director of the FIA Foundation, and Alan Donnelly, Leader of the Labour Party in the European Parliament from 1998 to 2000, and a former Chairman of the European Parliament All-Party Committee on Road Safety and Mobility, who is described as Mosley’s ‘right-hand man’.

  And those who know Mosley well – Ecclestone among them – do not expect him to retire in October 2009. While Ecclestone is sustained by the power of money, Mosley is motivated by the power his position in the industry grants him, which gains him access to political players and the contacts in Brussels who enable him to negotiate at a high level, without which his professional life would lose purpose and meaning.