One World 30"

It may be called OneWorld, but the latest America’s Cup challenge launched in Seattle yesterday could be better recognized as New Zealand Two,” was the report in the New Zealand Herald on June 22nd, 2000. Was this an exaggeration? Not really, considering that the challenge launched under the banner of the Seattle Yacht Club by telcom magnate Craig McCaw counted at that moment no less than 15 New Zealanders among whom 13 had come from the 1995 and 2000 America’s Cup winner, Team New Zealand (TNZ).

"To say ‘we had the information but did not use it and did not gain an advantage’ is the equivalent of saying ‘I smoked but did not inhale.’"

Among the 15 transfers, there were not only six sailors but also the designer Laurie Davidson who had actively participated in the victorious 1995 and 2000 Team New Zealand campaigns. In addition, fluid dynamics specialist Richard Karn, the engineers Ian Mitchell, Wayne Smith, Neil Wilkinson, Mike Spanhake and the boatbuilder Peter Sowman (the last two from the 1995 campaign) had also left for the American team. Finally, the Kiwi who negotiated the transfers, Sean St. Leger Reeves, was also in the OneWorld Challenge (OWC). Previously a TNZ lawyer and rule advisor he was now the operations manager of OneWorld.

That could have been the end of the story – with Team New Zealand suffering an intellectual migration – but it was nothing that hadn’t happened before, to other teams. It wouldn’t be long however before a scandal would erupt that would dominate Cup headlines for nearly two years. In October 2002, the media reported that a former TNZ member, who was now a disgruntled OneWorld employee, had tried to sell the designs of the future OneWorld boats to Chris Dickson at Oracle BMW Racing for $2.5 million. Later reports said that this same spy had also approached David Barnes of GBR Challenge and Bill Trenkle with Team Dennis Conner.

It was soon revealed that the spy in question was none other than Sean Reeves. After declining to accept a pay cut from OneWorld, which had run into some financial difficulty, Reeves left the team in April/May 2001 for a one-time payment of $600 000. Apparently he had left with more than just money; indeed he had taken design drawings as well. When McCaw discovered this apparent treachery in the autumn of 2001, he took the affair to the United States District Court of Seattle, claiming Reeves had violated his confidentiality agreement with OneWorld, by offering design information to other teams.

This already big story then exploded on February 10th, 2002! Team New Zealand went to the Seattle Court to claim that OneWorld Challenge had violated the 31st America’s Cup protocol by accepting information revealed by people it had recruited from other syndicates (in previous Cups). How had TNZ discovered this? Through Sean Reeves!

In defending himself against the OneWorld lawsuit, Reeves accused the people he had recruited to the Seattle team of bringing with them drawings of the 1995 and 2000 Team New Zealand boats. Reeves was even brash enough to be quoted saying: “Now that it’s happened, I’m fearful for Team NZ’s ability to keep the Cup.”

The allegations eventually came before the America’s Cup Arbitration Panel, which was asked to decide on the eligibility of the OneWorld Challenge to continue, and what penalty, if any, would be appropriate.

In this context, the OneWorld people were found to have had information but said it wasn’t used in coming up with their new designs. Team New Zealand’s lawyer Russell Green had a sharp retort: “To say ‘we had the information but did not use it and did not gain an advantage’ is the equivalent of saying ‘I smoked but did not inhale.’”

OneWorld spokesman Gary Wright answered: “You can’t stop someone bringing some things with them in their mind. If a designer designs a fast boat, it’s hard to make him forget that design.”

In mid-June 2002, the OneWorld plot thickened when a copy of an email sent in October 2000 was revealed. It was from the OneWorld mast builder to the management of the Seattle team: “The work we have done…has been essentially copying TNZ designs based on input from ex-TNZ team members…”

OneWorld had had in its possession a disk and a computer containing the New Zealand designs
If this wasn’t enough to keep the story in the headlines, it was soon made public that Sean Reeves had sent a package to Team New Zealand containing not only the diverted designs of NZL-57 and of NZL-60 from the 2000 Cup, but also those of the future OneWorld yachts. TNZ lawyer Russell Green confirmed: “We received the package unsolicited, and…we immediately delivered it, unopened, to an independent professional and later instructed its transfer to the registrar of the America’s Cup Arbitration Panel.”

Eight months after syndicate head Craig McCaw decided to go before the America’s Cup Arbitration Panel (ACAP), the decision fell on Friday, August 16th, 2002. The five members of the Panel, Sirs David Tompkins and John Faire, as well as Professors Henry Peter, Donald Manausse and Michael Foster learned that secrets had been taken by renegades of other syndicates and given to the OneWorld Challenge (OWC).

Thus, OneWorld was able to:

- Have copies of the measurement certificates of the TNZ 2000-generation yachts, NZL-57 and NZL-60 through its principal designer, and ex-TNZ designer Laurie Davidson,
- Have copies of the carbon-fibre certificates for the TNZ yachts through structural engineer Wayne Smith,
- Have sail design information from Prada through Mike Spanhake,
- Have design drawings from the America True campaign through Phil Kaiko,
- Have photographs of TNZ models during tank testing through Laurie Davidson,
- Have cockpit details of NZL-60 through designer Ian Mitchell.

Seen together in a list, the volume of information and the advantage it could confer was clear. Here was a magnificent and enviable base of information and research, a head start that meant the new team wouldn’t have to spend time or money on some basic design research.

In rendering its decision, the Arbitration Panel ruled: A one point penalty would be imposed on OneWorld Challenge at the conclusion of the second Round Robin of the Louis Vuitton Cup. In addition, the team would have to pay the expenses of the Arbitration Panel. Many observers felt the penalty was insufficient. But the Panel said, “The material wrongly in their possession was not utilised by OneWorld for design purpose.” The Arbitration Panel noted that it was OneWorld itself that brought the case to the attention of the Panel, and thus consideration was given for the ‘confession’. “The ACAP has found that OneWorld did in fact breach the Protocol as OneWorld had confessed to in its filing.”

In contrast, the Sean Reeves issue lingered. On September 23rd, 2002, the United States Federal District Court of Seattle condemned him for breaking the confidentiality clause that bound him to OneWorld. Further, it found him to have revealed confidential information not belonging to him. Bob Ratcliffe, the spokesman for OneWorld said, “We’re glad to have it behind us, now we can concentrate on sailing.” But the team wasn’t out of the woods yet…

At the conclusion of the 2002-03 Louis Vuitton Cup quarterfinals repechage, sailed November 26 - 29, 2002, OneWorld Challenge USA-65 eliminated Team Dennis Conner Stars and Stripes USA-77 4-0. But previously, on November 21st, Team Dennis Conner and Prada Challenge had asked the ACAP to look further into Sean Reeves’ assertions and also into the fact that OneWorld had had in its possession a disk and a computer containing the New Zealand designs. Ratcliffe called the move, “a desperate measure by desperate people.”

But on December 9th, the ACAP ruled against OneWorld yet again. The team was to be penalised by one point in the Louis Vuitton Cup semi-finals, and one point in the Louis Vuitton Cup finals (if it advanced). The same one point penalty would apply should it reach the America’s Cup Match. The Arbitration Panel ruled that the severity of this penalty reflected the fact that OneWorld had failed to disclose that it was in possession of this material.

OneWorld Challenge USA-65 won its semi-final over Luna Rossa ITA-80 between 10 – 17 December, 2002, by 4 wins to 1 on the water (the score would read 3-2 after application of the penalty). Oracle BMW Racing USA-76 later eliminated OneWorld in the semi-final repechage, by a 4-0 score.

Meanwhile, Team Dennis Conner removed its protest. This seemingly endless and spectacular affair of espionage, hung like a cloud over the 31st America’s Cup. The epilogue of the "Reevesgate" scandal came on December 8th, 2005: The New Zealand Court of Appeals rejected Sean Reeves’ appeal against the earlier Court of Seattle decision. Reeves was ordered to pay OneWorld US$1 053 497.