AC34 Team Oracle Caught Cheating…Again

This is the third incident, as far as I can tell. The first incident, spying on competitor designs, resulted in a penalty for Oracle. The second incident was when Oracle tried to use the Artemis incident to force competitors to change their design, and was rebuffed. Now Oracle is accused of yet another design-related incident.

Skipper Max Sirena of Italy’s Luna Rossa is the latest America’s Cup competitor to accuse defending champion Oracle Team USA of cheating in what potentially could be one of the biggest scandals in the regatta’s 162-year history

As I’ve said before it’s obvious Oracle’s design is inferior. Team New Zealand has out-innovated the American team and Oracle is cheating to try and catch up.

There is irony in these incidents. The Oracle captain recently said in an interview that their design changes were done, they were focused on sailing. In fact, he emphasized that making design changes at this late date could interfere with his ability to focus and become a better sailor; arguing that design change could actually have a trade-off or hurt their chances.

There also is a question of what Team Oracle management is going to do about being caught cheating on design, yet again. Here’s how their CEO has responded:

“I don’t think it’s right that if a few people break a rule on a team of 130 people, that the whole team gets branded as cheats,” Coutts said in his first public comments in the week since Oracle announced that it was forfeiting its overall championships from the first two seasons of the ACWS after the violations were discovered.


Coutts used the latest performance enhancement drug scandal in Major League Baseball as an analogy, saying that if certain players were suspended, “does that mean the whole team are cheaters? I don’t think that’s right to draw that conclusion.”

That is an interesting ethical question for the CEO to pose. I would rather hear him say “I take responsibility for the actions of my team” or “I am in charge and this is unacceptable, this will not be tolerated and will not happen again.”

Instead, we hear that Team America is going to play victim to their own team? In risk management terms, that should be a giant red flag. This is precisely why the U.S. government moved forward the Sarbanes-Oxley regulation. Too many CEOs had claimed they had no idea about fraud under their watch and objected to “the whole team” being branded cheaters.

It is possible that some rogue member of the team was acting independently. That seems unlikely given that it is not an isolated incident. It also seems unlikely, given the response from the CEO is to play victim and tell other teams to stop pointing fingers.

I don’t think it’s right that other teams should use this as an orchestrated PR campaign to slander another team when there’s a jury process going on and the facts haven’t been established.

Strange perspective. Cheating doesn’t require PR orchestration. Fraud doesn’t require PR orchestration. When it’s discovered, when an investigation begins, the expectation and the norm is negative press. It would require orchestration to do the opposite, for competitors to be complimentary and supportive; to say “don’t judge” or “don’t blame management, everyone has bad apples”.

More to the point when the CEO of UCLA tried to say that patient privacy breaches were the result of isolated staff it turned out to be exactly the opposite. A sting operation by Farah Fawcett and her Doctor proved that management wasn’t taking responsibility. Widespread and systemic security failures continued despite firing “isolated staff”. Eventually outside investigators were brought in and not long after the state of California passed two new laws to hold executive management accountable.

The sad fact is Team Oracle management is not talking about how they abhor cheating or how they will stake their reputation on a fair game. They are most likely trying to cheat their way through a design failure. They’ve tried spying, they’ve tried blocking the other designs, and now they’re accused of making unauthorized changes.

After decades of Americans trying to hold top management accountable for the actions of their entire team, it is the statements by the CEO of Team Oracle that are making America look bad.

Coutts admitted last week that someone with the syndicate illegally placed weights in the bows of three 45-foot catamarans without the knowledge of the skippers or management. One of the boats was loaned to Olympic star Ben Ainslie, who is sailing with Oracle Team USA this summer in hopes of launching a British challenge for the 35th America’s Cup.

Coutts said then that it was “a ridiculous mistake” because the weights “didn’t affect the performance.” Oracle forfeited its results from the four ACWS regattas in question, and its two overall season championships.

Someone made a mistake. Don’t blame the team. There was no real need to cheat. These are not phrases that engender trust. Quite the opposite, they lead to distrust of management.

Coutts’ risk approach does not sound far from what the utility industry once used to skirt regulations — hire a “designated felon” to the team. A CEO could claim she/he was “without the knowledge” of violations and basically pay someone else to go to jail or take the fall on their behalf.

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