Lawyers’ Turn to Make Waves in America’s Cup

Has Seattle’s OneWorld Challenge been sailing with design secrets stolen from America’s Cup defender Team New Zealand?

Is Sean Reeves a hero or a villain?

Who stole the Italian lawyer’s laptop?

Perhaps all will be revealed over the weekend and the remaining challengers can get on with the Louis Vuitton Cup challenger trials at Auckland to determine who gets a chance to take the Cup away from the Kiwis in February.

Or, perhaps not. The scenario has the international intrigue of a John Le Carre spy novel wrapped into a Tom Clancy techno-thriller. There’s even a “smoking gun.”

The challenger semifinals are scheduled to start Sunday -- Monday in New Zealand -- with San Francisco’s Oracle BMW and Switzerland’s Alinghi to meet in one best-of-seven series.

The Italian Prada’s opponent is uncertain. OneWorld, backed by billionaires Craig McCaw (cell phones) and Paul Allen (Microsoft), qualified with a 4-0 rout of Team Dennis Conner in the quarterfinals repechage round, but the America’s Cup arbitration panel will meet Friday or Saturday to consider questions about that team’s behavior submitted by the New York Yacht Club, on behalf of Team DC, and the Yacht Club Punta Ala, on behalf of Prada.

NYYC Commodore David Elwell said: “These are allegations that have been out there, and we, along with Yacht Club Punta Ala, feel for the benefit of the event that they absolutely need to be cleared up. I hope that they are cleared up satisfactorily and OneWorld goes on to win the America’s Cup and they can go home with a wonderful feeling that they’ve done a great job and they’ve done it the way the rules state. We at the New York Yacht Club had no expectation that we were going to be sailing OneWorld [in the repechage]. It came as a surprise to us, and it made the decision very, very difficult.”

So, nothing personal -- but the timing is interesting.

The joint submission was made a few days after Team New Zealand had turned over to the challengers an affidavit recorded nine months earlier in which Reeves presumably detailed his role in the dispute. The former Team NZ lawyer defected to OneWorld, along with lead designer Laurie Davidson and several sailors, then had a falling out with the Seattle team and allegedly tried to peddle design secrets to Team Dennis Conner and San Francisco’s Oracle BMW -- allegations supported by other affidavits.

Releasing the Reeves affidavit at this time would create chaos among the challengers. Gee, did that cross the Kiwis’ minds?

Now, with the semifinals scheduled to start a day or two after the arbitration panel meets, only three of the survivors are certain: Alinghi and Oracle BMW, who remain blissfully above the row, and Prada, which will meet OneWorld or its replacement.

Team Dennis Conner also filed a protest with the event’s International Jury that OneWorld had violated Racing Rule 2, which concerns “fair sailing.” But rather than risk arriving at a decision that would contradict a subsequent decision by the arbitration panel, the subordinate jury deferred its action.

The arbitration panel is composed of five prominent international jurists with sailing backgrounds -- two New Zealanders, one Swiss, one Italian and an Australian chairman.

There is an assumption that if OneWorld is kicked out, Team Dennis Conner will take its place.

Not necessarily. Sweden’s Victory Challenge, a 4-0 loser to Prada in the repechage, had a better won-lost record than Team DC, 7-9 to 6-10, through the two round-robins that determined quarterfinal matchups.

But Monday the Swedes announced they were packing up to go home. Even the Swedes’ departure, however, won’t guarantee Team DC a spot. If OneWorld is dumped, the arbitration panel could order a sail-off among the remaining quarterfinalists -- Team DC, Britain’s GBR and France’s Le Defi Areva -- or, in the most expeditious solution, have a three-boat semifinal.

There is doubt whether Reeves will testify or if the arbitration panel will have to rule on the face value of his affidavit.

Elwell said, “We do believe that Sean Reeves will be there to testify. There have been some efforts to prevent that from happening.”

Some observers suspect the “efforts” are preceded by U.S. dollar signs. OneWorld also has pointed out that Reeves is under a gag order in its proceedings in U.S. federal court.

OneWorld skipper Peter Gilmour, who has seen other bitter quarrels in his five America’s Cups, said: “I’m more disappointed than anything. I’m just very surprised by the New York Yacht Club, Team Dennis Conner and Yacht Club Punta Ala, the Prada team, with their approach here.

“They clearly have not respected the efforts that we went to last year, in putting the application in front of the arbitration panel and presenting a very detailed and thorough internal investigation. What was seen at the time was a lot of very small combinations of small rule infractions that had occurred.”

The “application” was a confession that OneWorld had the information, but there was no evidence to prove it had been used. Rivals now think there is.

Meanwhile, the plot thickened last weekend when Alessandra Pandarese, the principal legal advisor to Prada Challenge 2003 and secretary-general of Challenger of Record Management (CORM), reported the overnight theft of her laptop computer from the premises of her supporting law firm in Auckland.

Pandarese is one of an armada of lawyers who will be center stage by this weekend.

One prominent one is Richard Scruggs, the successful anti-tobacco lawyer from Mississippi who is a supporter of Team DC. Although he may be only in the wings, he smells another smoking gun. Scruggs accused OneWorld’s lawyers of trying to use U.S. courts to keep evidence from the arbitration panel. He urged OneWorld to withdraw from the series so as “not to taint the dignity of this event.”

As in the previous America’s Cup, Scruggs has had his private motor yacht, the 120-foot Emerald K, berthed in front of Team DC’s compound at the head of syndicate row.

How does the America’s Cup keep getting itself into these messes? One problem is that it has no continuing central authority -- no Bud Selig, David Stern or Paul Tagliabue. That isn’t all bad but, at times, it seems more like the Anarchy Cup.