Sports News: 05/20/08

Of all the copy shops in all of England, Trudy Coughlan had the rotten luck of walking into Document Image Processing.

It was June 2007 in sleepy Surrey County, and Coughlan, a statuesque blonde, sauntered through the door of the shop holding a sheaf of 780 pages. Scan them onto two CDs, she told the clerk, a forgettable middle-aged guy in a forgettable office park in the middle of nowhere. Nothing strange about the order, unless you happened to be a Formula One fan and happened to take a close look at the material: schematic drawings, technical reports, pictures, and financial information — enough insider dope to design a Formula One race car. Each page was emblazoned with one of the most famous logos in the world: the prancing black horse of Ferrari.

Surrey is McLaren country, just down the road from what locals call the Spaceship, the futuristic, top-secret, half underground headquarters of the McLaren Formula One racing team. But as it happened, the copy clerk was a rabid Ferrari fan — among the legion who worshipped Ferrari's star F1 driver Michael Schumacher and agonized over the fact that the Ferrari team was lagging behind top-ranked McLaren that summer.

"Trudy Coughlan," the woman said when he asked her name.

When she left, the clerk Googled.

First he Googled Trudy Coughlan and discovered she was the wife of Michael Coughlan, chief designer of ... McLaren's Formula One racing team.

Then he Googled Ferrari until he found the name and email address of the company's Formula One sporting director, Stefano Domenicali, in Maranello, Italy.

"Dear Mr. Domenicali," the clerk typed. He proceeded to spill the strange tale of the woman with the stack of what appeared to be top-secret Ferrari documents.

The next morning, as Domenicali sifted through his inbox, he came to the missive from Surrey. He immediately forwarded it to Ferrari security.

A few days later, Trudy Coughlan picked up the two CDs, along with the 780 pages of documents. Following her husband's instructions, she destroyed the papers in a home shredder and burned the remains in their back garden.

Thus began the biggest scandal ever to rock the world of Formula One racing.

Formula One is a deafeningly loud, extraordinarily expensive, rock-star-meets-the-road spectacle. It's a multinational pastime in Europe, where hundreds of thousands of fans pay up to $1,000 a ticket to watch 22 drivers from 11 teams go around complex circuits at 200 miles per hour. In a series of 18 races (or Grand Prix) in Monaco, Turkey, Japan, Brazil, Bahrain, and elsewhere, the drivers compete for points based on their place at the finish of each race. At the end of every March-to-November season, the circuit's highest point earners are crowned in two ways: by team (the Constructors' Championship) and by driver (the Drivers' Championship).

While the drivers with multimillion-dollar contracts command the attention and acclaim, the real competitors in Formula One are the cars themselves: ultralight, mid-engine, open-cockpit marvels of precision engineering, power, and speed. "The difference in raw driving ability between the fastest and the slowest driver is unlikely to be more than one second per lap," says Autosport writer Mark Hughes. "The difference between the fastest and slowest car is perhaps three or even four seconds per lap. So the fastest driver in the slowest car would still be nowhere, whereas the slowest driver in the fastest car would be quite successful."

The McLaren MP4-22 Mercedes (foreground) edging out the Ferrari F2007 (rear)
Photo: LAT Photographic

Unlike Nascar, which keeps the field evenly matched by restricting what race teams can do to their cars, Formula One is all about fine-tuning the vehicles. There are a few general regulations (called the formula), which dictate things like the number of cylinders an engine can have and the car's maximum length. Everything else can be tweaked. The top teams — which have thousands of employees — can blow more than $400 million a year trying to make their cars go a few milliseconds faster.

Formula One cars are made from more than 6,000 components, almost all of them custom-made. Every aspect is aerodynamically designed, from the body to the driver's helmet, and the cars can go from 0 to 100 mph then come to a complete stop, all in less than five seconds. Like jets, the cars rely on wings, or spoilers, in the front and back. But while an aircraft's wings provide lift, an F1 vehicle's spoilers, along with its sloping upper body shape and intricate underbody surfaces, do just the opposite: They create downforce, giving the vehicle wicked-fast cornering speeds and massive amounts of braking power. The downforce is so strong that the cars could theoretically drive upside down on the roof of the tunnel at Monte Carlo, Hughes says. Meanwhile, almost every other aspect of an F1 car — the arrow-shaped body, the low-slung suspension — is designed to reduce drag and maximize straight-line propulsion.

Of course, savvy engineering isn't the only way to get an edge in this fiercely competitive world. It also helps to know what your rivals are up to. F1 teams routinely sneak peeks at one another's cars, mostly in tacitly condoned ways: hiring photographers at the opening of each season to document competitor's cars, watching news feeds of vehicles being lifted by cranes for transport to estimate weight distribution, exchanging gossip and secrets with insiders from other teams. Such light espionage has long been part of the game. And if a team goes too far? Usually nobody cares. When two former Ferrari employees were found guilty in spring 2007 of corporate espionage (passing a limited amount of Ferrari design information to the perennial also-ran Toyota Formula One team), they got only a suspended sentence from the Italian court and not even a handslap by Formula One's governing body.

But when news got out last summer that McLaren, the number-one-ranked team, had hundreds of pages of Ferrari technical documents, the cheating wasn't dismissed so easily. Instead, the story landed on the front pages of newspapers across Europe, and the two F1 teams involved launched an offtrack battle as competitive as anything that happens on the racecourse. At the center were two characters far from the spotlight of superstar drivers and superpowered cars. Up from McLaren's design department and Ferrari's mechanics bay came Michael Coughlan and Nigel Stepney.

Ferrari's home is Maranello, population 15,000, in the Emilia-Romagna region of northern Italy. This is where both the company's F1 and road cars are designed, built, tested, and shipped. To drive into Maranello is to drive into Ferrari's big red pulsating heart. Most everyone here works for Ferrari or is related to someone who does. The streets, restaurants, and bars are filled with mechanics, drivers, support staff, executives, and wide-eyed fans, many dressed in Ferrari red, all proclaiming their allegiance to the most dominant team in Formula One history. At lunch, the faithful pack in at Montana, a restaurant whose walls are crammed with so much Ferrari memorabilia, it's considered an unofficial Ferrari museum. In the background, patrons can hear the constant rumble of race cars roaring around Ferrari's test track a quarter mile away.

As the head of Ferrari's 30 F1 mechanics, Nigel Stepney walked through Maranello like a king. Big and burly, with neatly cropped hair and goatee, he had been an integral part of Ferrari's "dream team" for 15 years, helping them capture five consecutive world championships from 2000 to 2004. The British-born Stepney brought order to the chaos that was Ferrari's nearly all-Italian F1 pit when he joined in 1993. "The pit stops were disorganized before he got there, and he worked well with technical director Ross Brawn in bringing structure and discipline," says someone who knows Ferrari well. "Nigel was exactly what Ferrari needed: someone who could whip the team into shape."

By 2006 Stepney, who had earnings estimated to be upwards of $1 million a year, held enormous clout, deciding which mechanics went on the road — earning them a bump in salary — and which stayed home. He was one of the many intensely competitive, highly strung men who mark their lives by the F1 season, so dedicated to the team that he didn't complain when, at one race, Michael Schumacher roared out of the pit and slammed into him, breaking his ankle. Stepney bled red.

Then, at the end of 2006, Stepney's world, along with the greatest team in Ferrari history, fell apart. First came the news that Schumacher would retire at the end of the season. Then highly respected Ross Brawn announced that he was going on sabbatical. Stepney, who had been Brawn's right hand and a key member of the Brawn-Schumacher inner circle, reportedly hoped that he might get the technical director's job, with its multimillion-dollar salary and infinite esteem.

But Stepney wasn't an engineer. He was a mechanic without a college degree. The Ferrari brass chose as technical director Mario Almondo, an Italian promoted from human resources. Almondo had previously served as Ferrari's head of industrial development of racing, but Stepney still didn't think Almondo had the technical savvy to lead the team's overall car development. Ferrari insiders say Stepney was furious with the choice — so much so that he went public with his grievances.

"I'm looking at spending a year away from Ferrari," he told Autosport in February 2007. "I'm not currently happy within the team. I really want to move forward with my career, and that's something that's not happening right now."

The players, clockwise from top left: McLaren CEO Ron Dennis, McLaren chief designer Michael Coughlan, former Ferrari chief mechanic Nigel Stepney, and FIA head Max Mosley
Photos: AP, Sutton Images, LAT Photographic, LAT Photographic,

Speaking out against the house of Ferrari can be punishable by immediate dismissal. Alain Prost, a four-time Formula One world champion, learned this the hard way in 1991 when he essentially said that his Ferrari was driving like a truck. He was fired midseason. Strangely, though, when Stepney spoke out, the Ferrari brass didn't fire him or even publicly comment on his betrayal. And when, out of pique, Stepney asked for a factory-based job, which wouldn't require him to go on the road with the team, his request was granted.

But according to Stepney, that ended up being even worse than getting fired. "Ferrari is unique in Italy; if you go against it, it's like going against the Vatican," Stepney would later tell London's Independent newspaper. "I began to feel like I was some sort of traitor because I no longer wanted to travel. People became scared to talk to me ... the situation was unbearable."

In May 2007, Ferrari caught Stepney seeming to do the unthinkable: attempting to sabotage Ferrari's F1 cars. Suspicions were aroused when mechanics found powder around the refueling tank for a car being readied for the Monaco Grand Prix. They feared someone might have put something in the tank, and Ferrari officials called the police. Stepney was subsequently searched and, sure enough, powder was found in his pockets.

His pants were confiscated, resulting in an absurd scene at police headquarters. "There is a carabinieri marshal in uniform and a Ferrari engineer in his underwear," wrote the newspaper Corriere della Sera. "It is May 18 and the missing pants are those belonging to Nigel Stepney, former coordinator of the mechanics in Maranello."

An F1 gas tank is an intricate, multichambered system designed to ensure that the car never runs out of fuel before its pit stop. Should someone slip powder into this highly pressurized and precise mechanism, it would be catastrophic. Yet there was Stepney, literally with his pants down. Police lab tests soon showed that the powder in his pockets matched the powder found in and around the refueling tank. Closed-circuit TVs also showed Stepney milling about the tank just before the powder was discovered. Police raided Stepney's home and discovered yet more powder matching the residue found in the Ferrari refueling tank and Stepney's pockets. Denying all, Stepney claimed to be the victim of a "dirty tricks campaign" by Ferrari in retaliation for his speaking against the company.

Then, a few weeks later, Domenicali received the email from Surrey, and Ferrari officials realized that the powder might have been the lesser crime.

Ferrari filed a civil lawsuit, and police raided Stepney's home a second time. After analyzing Stepney's laptop, investigators discovered that, at some point, he had printed out the soul of the 2007 Ferrari F1 car: 780 pages that, as court documents would later reveal, constituted "technical documents for designing, engineering, building, checking, testing, developing, and running a Formula One racing car." These included schematic drawings, technical reports, photographs, budget sheets, planning materials, and more. As one Ferrari team member who insisted on anonymity told me, the papers were enough to give an opposing F1 team intimate knowledge of how Ferrari's cars performed. "When you are playing poker, it is important that you know you have an ace. But it is even more important that you know the other guy has two aces. Therefore, you know what you have to do. That is why the consequences of this theft will last for years."

Soon it became clear that Stepney had not only taken some of Ferrari's deepest secrets, he had likely leaked them directly to Ferrari's archrival McLaren, which that spring and summer was dominating F1.

Ron Dennis, McLaren's chair, CEO, and part-owner, carries a Ferrari chip on his shoulder as big as Italy. "I think Ron's always seen Ferrari as the main competition, like the enemy," says John Barnard, who became McLaren's technical director when he, Dennis, and another partner took over the organization in 1980. "I think he's always tried to figure out how Ferrari created so much aura. Why does the name mean so much? Why is the prancing horse one of the most recognized symbols in the world along with Coca-Cola?"

The rivalry goes back to the days of Ferrari founder Enzo Ferrari, who in the 1950s called upstart British teams like McLaren garagisti — garage teams. How galling that label must have been for Dennis, who dropped out of school at 16 to go to work in a garage in Surrey, eventually making his way into F1. Even then Ferrari was a dominant team in the sport and had been since F1 was founded. Ferrari's drivers were heroes, its records unmatched. And when Dennis, Barnard, and another partner acquired McLaren to finally challenge this superiority, some say, Ferrari found new and creative ways to win: "They used their political clout to get the rules changed to try and eliminate some of the advantage that the British teams were getting because of superior aerodynamics," says Barnard, who served as technical director at Ferrari and Benetton after leaving McLaren.

But Dennis persevered. In 1983 he partnered with a Saudi-born French entrepreneur named Mansour Ojjeh, who put up the cash for McLaren to completely rework its engine. The next year the team won both the Drivers' and Constructors' world championship titles — McLaren had arrived. By 2004, Dennis had opened the $600 million McLaren Technology Centre — a space-age cathedral of motor racing designed by Lord Norman Foster and christened by no less than the Queen of England — and filled it with multimillion-dollar cars and superstar drivers. He also started a lucrative partnership with DaimlerChrysler to create the Mercedes-Benz SLR McLaren, one of the world's most expensive road cars. Today McLaren is thought to be worth more than $1 billion.

All of it is the result of Dennis' legendary focus on perfection. His fanaticism is so intense that to make sure he never sees a burned-out light in his team's gargantuan Technology Centre, Dennis hired a man whose sole job is to change out bulbs. To keep the Spaceship free of cooking smells, he installed an expensive air pressure system in the staff cafeteria. And to be certain that he never drives over a dirty rock at home, he regularly has the gravel in his considerably long driveway gathered up and washed.

In 2007, as Dennis reached 60, everything in his life seemed to be, well, perfect. He had a fortune estimated at $500 million, made in part by selling half of his original 30 percent stake in McLaren. He traveled to and from races in a $30 million Challenger 604 jet. His family life, which included a 21-year marriage and three children, seemed flawless. Best of all, his F1 team, his life's mission, had reconfigured its car, landed two star drivers — Fernando Alonso and Lewis Hamilton — and was trouncing the competition. By June, McLaren was number one, ahead of BMW-Sauber and, even more important, ahead of Ferrari.

But despite his obsession with perfection, despite his desire to get everything just right, Dennis made one mistake that would undo it all: hiring Michael Coughlan.

In 2002, Coughlan showed up to a job interview at fanatical, formal, straight-laced McLaren in a jacket, jeans, and no socks. A fun-loving career designer, Coughlan's Formula One journey was filled with stints in several different design departments. Nevertheless, he seemed to have the credentials, talent, and drive. Dennis made him chief designer.

"Mike is enormously self-confident, and nothing appears to faze him," writes Steve Matchett in his book The Mechanic's Tale. "He's a big, tall chap and radiates great presence. He can walk into a pub a complete stranger and within minutes the landlord and the four locals at the bar will be chatting with him like they've known him for years."

Coughlan had worked at Ferrari with Stepney, and to learn more about Coughlan (both men declined to participate in this story), I visited John Barnard, who had been their boss for part of that time. Barnard and Coughlan worked together in a satellite design office in England, out of which Barnard later ran his own design company. Stepney worked in Italy. Barnard showed me the cubicle where Coughlan would spend days hunched over a drawing board sketching a faster, sleeker F1 car — something that could take him out of the shadows and into the limelight, possibly getting him promoted all the way to technical director.

Coughlan and Stepney were close, especially on the road, Barnard says. They had worked together since the early 1980s, first at Lotus, then at Benetton, then at Ferrari. "They got along quite well," Barnard says. "They both like to joke, go out and have a drink, and both of them could party pretty hard ... tough, durable characters brought up in racing from their teens."

So it seems natural that when Stepney was feeling betrayed by Ferrari, he reached out to his old pal Coughlan. By then, Coughlan had been chief designer at McLaren for five years. He was responsible for the drawing office, producing renderings and computer models of the company's Formula One car. It was a position with major responsibility and sweet pay: reportedly around $600,000 a year.

During his first call to Coughlan at the beginning of March 2007, Stepney vented his frustration about Ferrari's new technical director. Coughlan listened intently. He was even more intrigued when, later that month, in three emails, Stepney expressed concerns "that certain features of [Ferrari's] car did not comply with the FIA Formula One technical regulations. These details related to a floor device" — a spring mechanism that moves the floor for improved aerodynamic performance when the car reaches a certain speed — and a rear wing flap separator that, in Stepney's view, was illegal.

For Coughlan, the insider information Stepney was offering could be priceless in a quest for a better job, either with his current employer, McLaren, or with someone else. Better yet, Stepney wasn't merely talking, he had proof: details of the floor device. He emailed the schematics to Coughlan, who showed the drawings to a key member of McLaren's executive committee without saying where he'd gotten them. After the renderings of the potentially illegal floor device made the rounds, McLaren's engineering director finally decided to forward them to the regulatory body of Formula One, the Fédération Internationale de l'Automobile. But while the FIA determined that the floor device did indeed fall outside Formula One's permissible design regulations, it didn't initiate any action against Ferrari. "As far as we are aware, Ferrari ran their cars with this illegal device at the Australian Grand Prix, which they won," Dennis later complained to the media.

As details of Stepney's deepening rift with Ferrari emerged in F1 gossip circles, Coughlan went to see his superior, Jonathan Neale. He would later say that he had become wary of Stepney by this time, but Ferrari insiders contend that Coughlan was trying to use Stepney's information to leverage his way to a better job at McLaren. After hearing Coughlan's story, though, Neale was sufficiently concerned that he told Coughlan, and later McLaren's IT department, that the company should block any further emails from Stepney. Coughlan says he suggested to Neale that he meet with Stepney and "ask him to stop communicating to me." (Investigators would later ask: What's wrong with just making a telephone call?) When arranging this meeting, however, Coughlan apparently used the opportunity to solicit a further piece of insider information about Ferrari's braking system, which Stepney provided.

In April, Coughlan flew to Barcelona, where Stepney was vacationing, ostensibly to ask Stepney to stop sending him insider information on Ferrari's car.

"After I arrived at Barcelona airport, he took me to a restaurant in the marina," Coughlan said in an affidavit. "Whilst we were having a coffee, Mr. Stepney produced, unsolicited, a diagram of a brake balance assembly used by Ferrari." Then lunch arrived. When they were finished, Coughlan asked Stepney to drive him to the airport. They got into the car, but before putting it in gear, Stepney pulled out the mother lode: a stack of 780 pages of Ferrari documents.

Take a look at this, Stepney said.

"My engineering curiosity got the better of me, and I foolishly took the documents from him," Coughlan said in his affidavit. "I casually flicked through them over the course of the 25-minutes-or-so journey it took for Mr. Stepney to drive me to the airport. I kept hold of the documents and took them home with me."

Coughlan's engineering curiosity apparently intensified. Soon after their meeting in Spain, he and Stepney met for dinner in England, where Stepney gave his old friend what he said were drawings of Ferrari's brake disc. To whom Coughlan showed these documents, and how deeply they burrowed into the perfect McLaren world Ron Dennis had built, would later become the subject of much debate. For now, one thing was clear: Mike Coughlan and Nigel Stepney had information that each might be able to parlay into a new job, perhaps even a posting as technical director for a Formula One team.

Coughlan once again met with Neale for breakfast "to discuss my future with McLaren and the concerns I had," Coughlan said. At the end of the breakfast, Coughlan showed Neale "two or so digital color images from the material that Mr. Stepney had given to me." It was only for a couple of seconds, but long enough for Neale to react with, essentially, What the hell are you doing with that? And Get rid of it, quick.

But Coughlan didn't ditch his trove. Instead, on June 1 he and Stepney met with the CEO of Honda's F1 team at Heathrow Airport, for Stepney "to discuss a possible career opportunity for him at Honda," Coughlan said, adding that he tagged along to see what Honda might have available for him. What were they asking for? "Silly money," one insider says. "Coughlan would be chief designer, and Stepney would be technical director, or vice versa. But they would effectively be the two chief people at Honda. Probably that move was destroyed by the fact that Nigel went in there just asking for silly, silly money."

Before either could strike a deal with a new company, however, Stepney was accused of attempting to sabotage a Ferrari car. Then Trudy Coughlan stepped into the copy shop in Surrey, and the scandal exploded into the Formula One world.

In early July 2007, the bucolic silence of Coughlan's Surrey estate — known as the Barn — was broken by an army of investigators, lawyers, and computer specialists armed with a civil search warrant. They interrogated the Coughlans and searched their house, looking for the two CDs of Ferrari documents, as well as computers, mobile phones, USB devices, BlackBerrys, phone storage cards, and other devices.

McLaren suspended Coughlan, and Ferrari released news that Stepney had been fired. On July 4, the FIA announced it had begun an investigation. The scandal made international headlines, and the two spies, Stepney and Coughlan, became household names in what came to be called Stepney-gate or, in Italy, the Spy Story.

Instead of slinking away, Stepney went on the offensive. He held a conference call with a group of British journalists. "I have no idea how Mike Coughlan got the documents, and I have no idea what exactly he is supposed to have," he said. "I categorically deny that I copied them or that I sent them to Mike Coughlan."

"I admit it looks blatantly obvious," he added. "But something is happening inside Ferrari." He had the papers legitimately, he insisted, because he needed them for his work in the racing simulator. Stepney claimed that after the discovery of the papers and the powder, he was spied upon, harassed, and followed. He went so far as to claim that his life and the lives of his family members were in danger. "There have been high-speed chases," he claimed. "I had no option but to get out of Italy."

He insisted that Ferrari was trying to discredit him because he knew all of Ferrari's secrets. "Ferrari is terrified that what I have in my mind is valuable," he insisted. "I guess I know where the bodies are buried from the last 10 years, and there were a lot of controversies in that time." He still hasn't revealed which bodies he was talking about or where they were buried. Though when I was trying to get him to answer questions for this article, he did email me to say, "You'll have to read the book." It might be a long wait: As of this writing, he is still supposedly searching for a publisher.

At the British Grand Prix in Silverstone, England on July 8, Ferrari driver Kimi Räikkönen won, and McLaren's drivers came in second and third. Thanks to the points they earned, McLaren was now leading the Formula One Constructors' Championship with 128 points. Ferrari was in second place with 103 points. The growing scandal, however, overshadowed McLaren's well-deserved celebration.

"I live and breathe this team; there is no way anything incorrect would ever happen to our team," Dennis told the media at a party after the race. What should have been a glorious event turned into a glum one. Even the caterers seemed to conspire against him, serving a wine labeled Spy Valley.

Shortly after he returned to Surrey, Dennis' Spaceship came under siege. FIA investigators and computer experts scoured the place, interviewing 20 engineers, accessing 22 personal computers of McLaren team members, and retrieving 1.4 terabytes of data stored on the central computer system of McLaren Racing. Ever the perfectionist, Dennis had his team comply completely with the investigators, hoping to prove that McLaren was innocent and that the Ferrari information had only been accepted by a rogue employee out to land a better job.

On July 26, the World Motor Sport Council of the FIA ruled that the McLaren team was in breach of the International Sporting Code. However, the FIA also said that the stolen information appeared to be limited to Coughlan and didn't penalize the entire team. But Ferrari refused to let the matter die; they prevailed on the Italian motorsports authority to file an appeal. Dennis was incensed. "The World Championship should be contested on the track, not in courts or in the press," he wrote to the president of the Italian motorsports authority. And why, Dennis and others would later ask, should McLaren be punished for the actions of a single employee while Ferrari, whose employee passed along the information, went untouched?

By the Hungarian Grand Prix in the first week of August, Dennis was starting to feel better. His team was still in first place, after all, and the Coughlan mess was beginning to pass.

Then, during the qualifying round, McLaren's upstart star Lewis Hamilton refused to let the team's world-champion driver Fernando Alonso pass him. Alonso retaliated by blocking Hamilton in the pit lane to hurt the rookie's time. Alonso was immediately penalized — instead of beginning the grand prix in pole position, he would have to start from sixth place. At a press conference that afternoon, Alonso and Hamilton launched into a public argument over what had happened.

The next day, before the grand prix started, Alonso marched into McLaren's mobile conference center and vented his rage at Dennis. The Spaniard insinuated he had information that would be disastrous for McLaren, and he would release it to the FIA unless Dennis made things right. It was Dennis' worst nightmare: What Alonso was saying meant that not only had Stepney's documents gone beyond Coughlan, they had been passed so deep within his team that even the drivers had access to them.

"Stop!" Dennis says he told Alonso after the driver made "specific reference to emails from a McLaren engineer."

After Alonso left, Dennis asked his chief of staff, Martin Whitmarsh, if any of what Alonso had said could be true. "We have been too thorough in talking to the engineers," Whitmarsh assured him. "He cannot have been telling the truth."

Dennis couldn't leave it at that. His meticulous nature wouldn't allow it. So he called FIA president Max Mosley. Dennis and Mosley were hardly friends — Mosley had subtly suggested that Dennis was "not the sharpest knife in the box" at a press conference in 2004. Still, Dennis picked up the phone and essentially ratted McLaren out. "I was upset and angry, but mainly upset," he would later say at a meeting with the FIA. "Max calmed me down ... If he felt there is any real validity in what Fernando had said, he would contact me prior to taking any action."

Nearly a month later, without warning Dennis, Mosley sent a letter to McLaren's three top drivers, demanding that they turn over any confidential Ferrari technical information they might have.

"We don't call him Mad Max for nothing," says Paul Stoddart, an Australian millionaire, airline mogul, and former owner of the Minardi racing team. Mosley is the son of Oswald Mosley, late leader of the British Union of Fascists, who married Max Mosley's mother, the famous Diana Mitford, in 1936. The wedding took place at the home of Nazi propagandist Joseph Goebbels, with Adolf Hitler attending as a guest of honor.

On September 13, 2007, the lawyers and principals on both teams were called to the FIA's Paris headquarters for an "extraordinary meeting," as the FIA put it. For the first time, all the evidence poured forth. Not only did the FIA have records of 288 SMS messages and 35 phone calls between Coughlan and Stepney, it also had a series of damning emails — discussions of the stolen papers and the Ferrari "mole" from no less insiders than McLaren's own drivers.

From McLaren test driver Pedro de la Rosa to Coughlan on March 21, 2007: "Hi, Mike, do you know the Red Car's Weight Distribution? It would be important for us to know so that we could try it in the simulator. Thanks in advance, Pedro. p.s. I will be in the simulator tomorrow."

De la Rosa later confirmed that Coughlan replied by text message with precise details of the Ferrari's weight distribution.

De la Rosa later sent an email to Alonso describing Ferrari's weight distribution, to which Alonso replied on the same day with an email that included a section headed "Ferrari": "Its weight distribution surprises me; I don't know if it's 100% reliable, but at least it draws attention."

Soon after, De la Rosa emailed Alonso, passing on information from Coughlan about the CO₂ Ferrari used in its tires, ending with, "We'll have to try it, it's easy!" Alonso replied that it is "very important" that McLaren give the gas a test.

De la Rosa emailed Coughlan on April 12: "Hi Mike, I hope you are well. Can you explain, as much as you can, about Ferrari's braking system ... Are they adjusting from inside the cockpit?" Coughlan replied two days later with a technical description.

And an email from one senior McLaren engineer to another: "Is the Ferrari wheelbase an accurate figure? Did it come from photos or our mole?"

Most damning of all was this email from De la Rosa to Alonso: "All the information from Ferrari is very reliable. It comes from Nigel Stepney, their former chief mechanic — I don't know what post he holds now. He's the same person who told us in Australia that [Ferrari driver] Kimi [Reäikkönen] was stopping in lap 18. He's very friendly with Mike Coughlan, our Chief Designer, and told him that."

This new information led the FIA to conclude that Ferrari insider information and documents had, in fact, found their way to several McLaren engineers and drivers. Not only did the engineers know that confidential Ferrari information had come from a Ferrari mole; they were prepared to use it to McLaren's advantage, if they hadn't already done so.

Mosley delivered the harsh verdict: McLaren would be stripped of all manufacturers' points (team points) for the '07 season. This meant the Constructor's Championship, which McLaren had been leading, was now lost. Then came the fine: $100 million, the biggest in the history of Formula One. Finally, and most embarrassingly for McLaren, a technical delegation would be dispatched to inspect McLaren's 2008 cars to determine whether any Ferrari information had been incorporated into the vehicles.

"I do not fear the task at all," Dennis stoically insisted of the inspection. "I care only about the McLaren name."

What did McLaren actually get from Stepney? It's debatable. Of course, McLaren received inside information about Ferrari's pit stop strategy, finances, personnel, and other elements that might have given the team a few seconds' advantage on the track. "If you can second-guess their pit stop strategy, without them knowing yours, you're at an obvious advantage," F1 writer Hughes says.

The aerodynamic map of the car would enable McLaren to show "what drag and downforce Ferrari was getting for given ride height and wings," Hughes says. Downforce and drag are always at odds in Formula One, one delivering better handling, the other increasing speed. Knowing how an opponent has managed this issue, Hughes points out, can help you determine how to adjust your own car and can be vital to knowing where the other team is going to be weak.

Another questionable area is tires and tire gas. In 2007, all teams were required to use Bridgestone tires. Ferrari had long ridden on Bridgestones, but McLaren was used to Michelins. Knowing how Ferrari dealt with these tires would certainly be helpful to McLaren. Until that point, McLaren had been filling its tires with nitrogen. But McLaren at least considered filling its tires with CO₂ , just as Ferrari was doing.

But much of the data — like wheelbase measurements and weight distribution — had been deduced long ago by the subtle spying all teams do. Was the new information enough to get a unique advantage? Maybe, but many experts find it unlikely. The truth is, Ferrari almost certainly got more from the exchange than McLaren did: a way to trounce McLaren in public and through the FIA.

"FIA stands for Ferrari International Assistance," quips Stoddart, the former Minardi owner. Mosley, he says, came down hard on Dennis for the kinds of activities that nearly all of the teams have engaged in at one point or another. "To say the punishment fits the crime? The crime hasn't been proven in any reputable court of law. It hasn't been tried." He then recites for me a laundry list of FIA biases in favor of Ferrari and against McLaren, and the fate of those who dare challenge Ferrari.

The last race of the 2007 season was the Brazilian Grand Prix on October 21 in Se3o Paulo. It would determine the Drivers' Championship. McLaren was leading the event, and the team was prepared to extract some degree of solace for the bloody season it was leaving behind. McLaren's young superstar, Lewis Hamilton, had a four-point lead over teammate Alonso and was seven points ahead of Ferrari's Reäikkönen, whom Ferrari had poached from McLaren the previous year with a record-setting, three-year, $150 million contract. All Hamilton had to do was finish in fifth place or better and the Drivers' Championship would be his and McLaren's.

But the prancing horse would not go down. A gearbox problem slowed Hamilton, who fell to seventh place. Alonso got trapped on Hamilton's left and finished third. When the checkered flag fell, it was Re4ikkoenen in first, giving Big Red the Drivers' Championship by a single point. The streets of Maranello, where giant screens showing the race were erected in the town square, went nuts. "It was the most important victory in Ferrari history," says Enzo Ferrari biographer Leo Turrini. "It was like a revenge when you need to be repaid after you suffer an injustice."

But 2008 brings a new season. As of this writing — three races in — BMW is leading the Constructors' Championship with 30 points, Ferrari is second with 29, and McLaren is third with 28.

Eager to stay above reproach, McLaren told the FIA that it would avoid using anything that even looked like it came from Ferrari, including quickshift (a type of gearbox), fast fill (a fueling technique), and CO2 as a tire gas. Ferrari president Luca Cordero di Montezemolo was hardly forgiving. "Whoever wins the title will do so either with a little bit of Ferrari or with a proper Ferrari," he said. "Because the new McLaren is a silver Ferrari."

Stepney, who recently became director of race technologies for onboard camera company Gigawave, could still face criminal charges for the alleged doping of the F1 cars (he still denies all charges). Coughlan, who was officially fired from McLaren in March 2008, hasn't found a new position and is facing civil charges.

For his part, Mosley finds himself embroiled in a scandal of his own. International headlines exploded in early April, when the British newspaper News of the World posted a video of him in an underground S&M "torture dungeon" in the Chelsea district of London. The FIA head, according to the paper, was conducting a bizarre five-hour "Nazi-style" orgy with five prostitutes, reenacting a concentration camp scene and spanking at least one women with a leather strap while counting out the strokes in German. (Mosley denies there was a Nazi theme and has filed a lawsuit against the paper.)

The apparent disgrace of Mosley might offer Ron Dennis some comfort. But Dennis' meticulously constructed life has all but fallen apart. The team he spent more than 25 years building has been besmirched, tagged as a bunch of cheaters. There was even talk of his leaving McLaren. And in early 2008, Dennis and his wife announced their separation.

"Ron Dennis aims to be the best there is," John Barnard says. "To have the best team, the smartest team, the cleanest garage. Everything that he can change by spending more than the other guys, he will do. But with all of that, he still didn't win the championship last year. Ferrari got him again. Ferrari took the championship off of McLaren. Then, on top of that, Ferrari managed to create a political situation, which ended up costing McLaren 50 million quid [$100 million]. They've scored two out of two!"

The final insult is that the whistle-blower came not from Ferrari's headquarters in Maranello but from a Ferrari fan in McLaren's own backyard. What is it about Ferrari? Dennis is still no closer to answering this question.

I recently drove from McLaren's futuristic headquarters, which rises from the fields outside Woking, to a low-slung office building that houses a copy shop where, sources had assured me, Trudy Coughlan had taken the infamous documents. I rang the buzzer but got no answer. After a few minutes, a middle-aged man in a well-worn navy blue sweater hustled out. I mentioned the name of the informant from the court documents, and he answered, "Yes, that's me."

When I told him that I wanted to hear about his role in the F1 scandal, he blanched. "I get that all the time," he said, backpedaling. "But it's not me."

He added that he wished it had been him being hailed as a hero in Maranello by no less than Ferrari president Luca Cordero di Montezemolo, who dedicated the team's 2007 victory to "our fans who believe in the fairness of sport and to this English gentleman" who outed the stolen documents. "Without him," Montezemolo told Ferrari fans after one race, "it would have never been possible to shine the light onto one of the worst pages in the history of motor sport."

The more I grilled him, the more the guy in the sweater clammed up. Finally he walked away, faithful, like all red-blooded Ferrari fans, to the team's history, victories, and most of all, its secrets.

Mark Seal (markseal1@aol.com) is working on a book about the life and murder of Kenyan filmmaker Joan Root, to be published by Random House in 2009.

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