The “POTUS is a liar therefore he needs to be removed from office etc. etc.” meme

OK folks, time for an explanation. I am reading yet more of the usual nonsense about how the POTUS should be charged with treason (this idea has been popular amongst many authoritarians and nativists for a long long time).
When I inquired exactly why he should be charged with that crime, the person on Twitter who was firing off all manner of “hang him high” tweets came back with “because he told me I could keep my doctor under the ACA and now I can’t therefore he lied therefore he should be charged with treason”.
Sheesh. Where to begin.
First of all, lying is not treason. There is a specific definition of treason in most legal jurisdictions, and it requires a level of malfeasance (presenting a clear and present threat to the existence of a country) far in excess of simple lying. I don’t think that there is a cat-in-hells chance of charging a sitting president with treason on the grounds that he lied about the ACA.
Secondly, the statement by President Obama was certainly not true. However, I doubt if it meets the definition of a lie based on the evidence. A lie is a falsehood uttered by somebody who knew that it was false at the time that it was uttered. In order to prove legally that somebody lied, you have to provide proof that a person knew that they were saying something untrue when they originally said it. That is a high bar to clear.
Now if you want to start from the assumption that all politicians are liars, or that the POTUS is a liar, then you can define any mistaken utterance as a lie. However, that does not make it a lie. That is you overlaying your assumptions about behavior on other people’s statements.

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Rumors re forced takeover of Sauber F1 team

There are rumors and speculation that the underlying motive behind the attempts by Giedo van der Garde and his lawyers to claim his seat in the Sauber team at the Australian Grand Prix is that it is part of an attempt to force the Sauber F1 team, either into bankruptcy, or to a point where the team has no choice but to accept an offer for it to be bought, or it will go bankrupt.

The theory behind this is that van der Garde’s father in law is the Dutch businessman Marcel Boekhoorn. He is estimated to be worth $1.5bn. If those estimates are anywhere close to true, he could probably buy the entire Sauber team out of pocket change.

One thing I have learned over the years, from reading biographies and news articles, is that highly successful wealthy business people seldom frivolously invest their own money in projects with a low chance of success. Wherever possible, they try to invest other peoples’ money, and limit their own personal exposure. They know the value of money and what it can do, and they are experts at making it work for them.

It is therefore far from obvious to me why Marcel Boekhoorn (or anybody else for that matter) would want to buy the Sauber F1 team. Based on what has been happening to the team over the last 3 years, it appears that the team is struggling to survive. It’s sponsorship revenues have declined as external sponsors depart. The most recent departure was NEC, which sponsored the team last year. NEC left Sauber at the end of 2014, and is now a sponsor for Force India. The only current visually significant sponsor on the car not brought to the team by drivers is Oerlikon, whose name adorns the top of the dorsum next to the engine air intakes.

Rumors in the F1 journalist community have Felipe Nasr’s sponsors providing around $25m this season, and Marcus Ericsson’s sponsors providing another $15m. Let’s add $10m for Oerlikon, and $10m for other smaller deals. That gives a total sponsorship revenue stream of $60m. Now we have to add revenues from FOM. In 2014 this estimate was published about the revenue distribution in 2013. This showed that Sauber may have been paid over $70m in 2013. However, that number will have reduced significantly this year since the team failed to score a point in 2014. Let’s say it is $40m.

This gives total team income in 2015 as $100m. That sounds a lot, but in reality, according to recent stories, to run a properly functioning team takes at least $125-150m a year. That does not include further investment in people and facilities to move the team up the grid over time.

There is also the matter of what debts Sauber has accumulated over the years. If the team owes money to banks or other financial institutions, it will have to fund interest and principal payments on the debt, which will eat into its free cash flow. The fact that Sauber spent a lot of time and effort  in 2013 and 2014 trying to find investors from Russia, prior to finding it’s current drivers, suggests that they were trying to find external investors to stay solvent. It is almost impossible to know what debts the team currently has.

So if Marcel Boekhoorn was to dip into his pocket and buy the team, his committments would be the money to buy the team itself (believed to be owned 66% by Peter Sauber and 33% by Monisha Kaltenborn), and money to pay off the debts. Then there is the ongoing funding of the team. The economic model of F1 currently requires buyers to stump up seriously big money every month just to keep back of the grid teams afloat, since those smaller teams all get low payouts from FOM. The payouts are skewed heavily towards the historically successful teams.

There is also a severe lack of new sponsors in F1. The sponsor changes in 2015 seem to mainly comprise sponsors changing teams (two examples visible are Rexona moving from Lotus to Williams, and NEC moving from Sauber to Force India). There are no new big-money sponsors visible on most cars, and many of the visible sponsors are either brought by drivers, or are companies owned by the team owners.

If Marcel Boekhoorn is serious about buying any F1 team, he had better have a very good business development plan…

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Giedo Van Der Garde vs. Sauber – Part 6

Well, since my last post the soap opera has raced through at least two more episodes…

Episode 1 – Friday

A contempt of court hearing commences in Court 15 of the Victoria Supreme court building. Counsel for Van Der Garde alleges that the Sauber team, having cancelled Van Der Garde’s contract with the Contract Recognition Board in February, are refusing to re-activate it, despite being informed on March 2nd by the arbitrator that he still had a valid contract. Without a current contract, his application for a Superlicense cannot be completed. For this and other reasons, counsel begins to outline his contention that Sauber is committing contempt of court by preventing Van Der Garde from driving for the team at the race weekend. He outlines what will be their request that the court issue a draconian order for contempt, involving the sequestration of team assets, and the possible committal of Monisha Kaltenborn to jail.

While his lawyers continue the contempt of court hearing, Giedo van der Garde shows up at the racetrack in Melbourne to claim his seat. His paddock pass initially fails to work, but eventually he is let into the paddock. Then, with advisers and camera crews in tow, he arrives at the Sauber garage, He enters, and amidst conflicting reports as to whether he has a seat fitting scheduled, or whether a seat ftitting will even take place, he borrows the race suit of Marcus Ericsson, who is only fractionally shorter than him. The suit is quite clearly a tight fit, but Giedo parades around the paddock in it for a few minutes, before handing it back and resuming civilian garb.

Meanwhile, back in court, the contempt of court hearing enters a recess as the court demands information from the Sauber team (namely, a list of their assets) which can only be supplied by their team manager, who is busy due to…a practice for a race.

Back to the racetrack…the Sauber team does not run at all in Free Practice 1. The drivers get into the cars, and the engines are even briefly started, but nothing further happens, and after 30+ minutes the drivers get back out again, and it becomes apparent that Sauber will not run in this session.

Van Der Garde leaves the circuit, having ensured that he was present and available at the start of FP1 to take his rightful seat in a car.

Sauber does run in free Practice 2, their cars turning a wheel under power for the first time this weekend.

Meanwhile, back at court, the hearing re-commences, but is soon adjourned until Saturday morning, as it is announced by the judge that both parties have entered negotiations for an agreed settlement. The first sign of sanity breaking out?

Episode 2 – Saturday morning 

The hearing re-commences in court, but it is immediately announced that the parties have reached an agreement that means that Giedo van der Garde will not drive or attempt to drive for Sauber in Australia. The parties will continue to negotiate a full and final settlment after the Grand Prix weekend.

So…what does this all mean?

Firstly, contrary to some headlines, there has not been a settlement. All that has happened is that Sauber has, probably by making concessions, persuaded Giedo van der Garde to stop trying to drive for the team in Australia, and he and his lawyers have also withdrawn their application for an order of contempt in the Victoria courts. Van Der Garde still reserves the right to claim his seat in subsequent races (starting with the Malaysian Grand Prix in 2 weeks’ time) and, until there is a full settlement of the dispute over the contract, Sauber is still potentially subject to court orders and (if it fails to comply with them) contempt of court rulings.

The cynic in me says that Sauber, which until Friday morning was playing a game of careful, non-provocative non-compliance with the court order, may have been reminded by FOM that while publicity out of season is fine and dandy, an F1 race weekend is about the show on track, and courtroom soap operas undermine the show on track.

The realist in me concludes that (a) Giedo Van Der Garde and his advisors realized that there was little chance of him driving this weekend, mostly due to the Superlicense issue, and (b) Sauber realized that further non-compliance would inevitably result in an order of contempt, probably resulting in the sequestration of its on-track assets, which would prevent it from joining the FOM transport process to Malaysia. This would then require it to freight its equipment separately to Malaysia at great expense, requiring it to pay money up front that it may not have.

Hence the negotiation and announcement of what is merely a temporary truce. (Rumor in the sport is that Van Der Garde has been paid $3m by Sauber for breach of his contract to drive in Australia).

If common sense persists, we may get a full settlement before Malaysia, which will end the elaborate games of legal Whack-A-Mole that we have seen in Australia. However, if insufficient sense materializes, the process of Van Der Garde obtaining local court orders and then attempting to get into the car could continue. He certainly has the money to pursue this course of action, and he has an aribitration ruling, and Australian appeal court decisions in his favour. Sauber, on the other hand, will soon run out of options, to the point where its cars and equipment could end up impounded in a foreign country, which would effectively end its existence as an operating entity. Its sponsors right now are also probably yelling down phones “sort this damn mess out”.

The main impediments to a settlement, apart from possible intransigence by one or both parties, is that Sauber may not have the money in the short term to pay compensation to Van Der Garde for breach of contract. The team is, by all accounts, very short of cash. To be fair, they are not the only team rumoured to have cash flow issues. Lotus and Force India are also short of cash, to the extent that all three teams have been granted advances from FOM of their 2014 prize money payouts to help them in the short term.

 

 

 

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Giedo Van Der Garde vs. Sauber F1 Team – Part 5

Having read the published judgment, there are no more stunning revelations. Because the arguments in the court were confined to the matter of applicability of the arbitration award in Australia, there are no juicy revelations about driver contracts, finances etc.  The rulings are brief, as explained by the judge, due to lack of time.

What is interesting is that the original arbitration ruling on March 2nd was made under UK law, not Swiss law, which is what I would have expected since the Sauber team is based in Switzerland.

The court was not impressed by the argument that because Giedo van der Garde BV (the contracting entity with Sauber for the driver contract) and Giedo van der Garde are two separate entities, that the ruling does not really apply to Giedo Van Der Garde the person. Well yes. If I heard that argument in front of me in a court, I would be tempted to respond “nice try…and do you think I came down from the hillside with the last rainstorm?”

The ruling pretty comprehensively demolishes all of the other arguments from Sauber. It will be interesting to see what new arguments they come up with in the afternoon appeal hearing.

 

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Giedo Van Der Garde vs. Sauber – Part 4

Leaving primitive schadenfreude aside, it it always awkward to see one party to a legal action getting its posterior kicked in a court room.

We just witnessed that event in the Victoria Court Of Appeals, when the judge read out a short summary ruling. Giedo Van Der Garde prevailed in his attempt to have the Swiss arbitration verdict upheld in Australia. The court dismissed all of the Sauber team’s arguments, swiftly and comprehensively.

The lawyers for Sauber looked half-shocked, half-demoralized. Beyond asking for a copy of the full detail judgment, they said little. The lawyers for Van Der Garde asked for a signed copy to take to Sauber, and then craftily took the opportunity to remind the court that their client was ready and willing to drive, and would be looking forward to traveling to the circuit. They also pointed out that they had emailed Sauber at 7.45pm on Tuesday evening expressing their willingness to work with the team, but had not yet received a reply (HINT TO COURT – We’re not the ones being unco-operative, your honour).

The judge felt it necessary to point out that the court officers were available 24×7 to resolve any issues (HINT TO DEFENDANTS – You had better be co-operative). Van Der Garde’s lawyer then said “I hope we will not be back in front of you under those circumstances, your honour (HINT TO DEFENDANTS – You heard what the judge said. Be co-operative).

Sauber is clearly simply playing for time, for it has been announced that they intend to appeal the ruling this afternoon. Quite what grounds they intend to argue on I am not sure. Their previous arguments concerning non-enforcement were waved away in today’s ruling. From comments made by Monisha Kaltenborn, it seems that they may try to argue on the issue of safety, but I think that is a long shot.

Everything about the presentation of their case convinces me that Sauber never thought that could win in court, and their tactics seem to be designed to play for time and spin out the legal process to the point where they can either avoid having to run Giedo Van Der Garde, or so that they can claim force majeure and not run at all on the Grand Prix weekend.

This is a real soap opera, but with real characters, lots of money and international finance. The only thing missing is sex.

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Giedo van der Garde vs Sauber F1 Team – part 3

The Day In Court is now over. The court has reserved its judgment until Wednesday morning.

Although the court reports are fragmented, and mostly concern tabloidesque claims made by the lawyer representing Sauber, it is clear that Sauber’s defence of their position did not involve arguing that they are not in breach of contract. Instead, the arguments advanced in court by the Sauber lawyer seemed to consist mostly of dire warnings and predictions, and outright falsehoods. The claim that Van Der Garde has no Superlicense is easily disproved, and Van Der Garde’s lawyer disposed of it during his time at the podium by passing his Superlicense documentation to the judge. The claims that Van Der Garde cannot fit the 2015 car, that he does not have a seat, insurance etc. are all flim-flam. As others have pointed out, at one race weekend Sauber put Pedro De La Rosa in the car at something like 15 minutes’ notice. That does tend to undermine arguments like this. Van Der Garde has a race seat from 2014 which will probably fit the new car, unless Sauber destroyed it.

Worst of all was the argument that Giedo Van Der Garde could be at physical danger if he tried to drive the car. Well, duh. Formula 1 is a sport involving drivers strapped into high-speed projectiles hurtling around racetracks. This could be dangerous? After the break – water is wet, and the Sun rises in the East.

The lawyer for Van Der Garde appeared to spend a lot of his time explaining the contractual background to the dispute, but because that is kind of complicated, most of that has yet to appear in reports. The reports so far mostly focussed on the Sauber “we are all doomed if we put Giedo in the car” arguments.

These arguments advanced by Sauber seem to be so inept and lacking in substance that one is forced to ask why they put up such a poor performance. It is almost as if they were going through the motions. I am wondering if there is a hidden agenda at work.

Also notable was the presence in court of Felipe Nasr, Marcus Ericsson, and lawyers representing them. If Sauber had a strong case, there would have been no need for them to be present. The fact that they felt it necessary to be there tells me that they have little confidence in Sauber’s defense. Their threat to sue Sauber if either Nasr or Ericsson is denied a drive is somewhat predictable, but should not be of any interest to the court. They are not parties to the current dispute. If Sauber is found to be required to run Giedo Van Der Garde, then Sauber has to sort out the issue of competing contracts.

I stand by my assertion that Sauber has to sort this mess out before they find themselves on the back foot in a game of legal Whack-A-Mole with Van Der Garde’s lawyers. Right now, F1 is in the headlines for the wrong reasons.

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Giedo van der Garde vs. Sauber (continued)

I have been reading lots of odd and illogical comments about this legal action in the last couple of days. Some more thoughts:

1. For as long as motor racing teams have existed, teams have been screwing drivers, and drivers have been screwing teams. The sport is full of tales of drivers and sponsors whose promised cheques either never arrived, or bounced higher than the local television tower when they did arrive. Often this occurred after the team had already incurred the expense of running a driver, branding etc. etc. for months. Some teams have gone out of business as a result. Equally, teams have taken sponsorship money from sponsors and/or drivers, then failed to honour their side of the bargain. It is up to both parties in deals like this to protect their own interests.

2. Sauber, by all acounts, is precariously financed, and probably needed a lot more money than they had on hand in October 2014 to get through the Winter and design and build their 2015 car. However, a funding crisis isn’t going to fly in court as a defence against a breach of contract lawsuit. The court will look at the facts before them, and are unlikely to be swayed by claims that the team will go out of business if the court finds against it. The attitude will be “well, you shouldn’t have broken contracts. Your problem”.

3. The court action in Australia is not the end game. As I understand it, Giedo van der Garde and his legal team are simply asking the court to rule that the arbitration decision in his favour in Switzerland is enforceable in Australia. If the court rules that it is, then we move to the next stage, where his lawyers will attempt to negotiate a settlement from Sauber. Implicit in the negoitations will be the threat that if Sauber does not comply, they will go to a local court to either force the team to put him in the car at Melbourne, or to demand some other commercial or financial sanction, which could (in extremis) include seizing team assets. If the court rules that the arbitration decision is not enforceable in Australia, this is not necessarily the end of the matter. Giedo van der Garde can still take legal action in Switzerland, which is where Sauber is based, or he can ask another country to rule that the judgment is enforceable in that country. We could be seeing the beginnings of a lengthy game of legal Whack-A-Mole, unless van der Garde does have another F1 option (which can only be Manor/Marussia).

If F1 is at all concerned about its public image, it should be working behind the scenes to broker a resolution to this dispute. The sight of bailiffs marching into the paddock to lock up the Sauber garages at a Grand Prix weekend will not play well in the media worldwide, should that happen.

 

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Giedo Van Der Garde vs. Sauber F1 Team

The news has broken that Giedo Van Der Garde is to take legal action in Australia next week over what he claims is a breach of contract by Sauber, when they replaced him for 2015 by one of Felipe Nasr or Marcus Ericsson, despite him apparently having already signed for the team for 2015.

A Swiss Court of Arbitration has apparently ruled that Van Der Garde did have a valid contract for 2015. It appears that the court action in Australia is a request for enforcement of the arbitrator’s decision in Australia. This would place Van Der Garde in a strong position to possibly enforce the arbitration decision via legal action to impound the team’s cars and other assets when they arrive in Australia for the Grand Prix.

Some thoughts on this:

1. Van Der Garde has already successfully sued another F1 team over contractual matters. He won a court case in 2010 against Force India (they were actually entered as Spyker at the time of the original contract) over F1 testing mileage, and eventually collected compensation from the team. The court judgement is worth a read, since it provides a fascinating window into the behind-the-scenes processes by which drivers get testing roles in F1, and how those arrangements can rapidly unravel.

2. It is not clear what relief is useful for Van Der Garde if the court in Australia rules in his favour. As has been pointed out by Joe Saward on his blog, forcing Sauber to run him in 2015 is not exactly logical or smart for multiple reasons; he will be paying an unwilling team for a drive in a car that he has not even sat in, let alone tested. The only reason that suing the team makes sense is if he made a down-payment for 2015 when he signed his contract, and is still in dispute with the team over the down-payment.

3. If Sauber decides to tough it out and meet Van Der Garde in court, they have to be prepared for the possibility of an adverse ruling. This would throw their entire 2015 sponsorship up in the air from a legal and commercial standpoint, since running Van Der Garde would force them to stand down one of either Felipe Nasr or Marcus Ericsson, which would in turn carry negative contractual and financial implications for the team.

4. F1 team owners and bosses tend to not look good when cross-examined in court cases. Most recently, Eddie Jordan was excoriated by a High Court judge in the UK when Jordan Grand Prix attempted to sue Vodafone over a title sponsorship deal that ended up with Ferrari. The sort of business practices that seem to be the norm in F1 tend to be viewed by many legal jurisdictions as sharp practice at best.

It really will not be good for Sauber as a team to be forced to defend their position in court. I anticipate an out of court resolution, which may cost Sauber money and leave them struggling later in the season. A number of people experienced in matters F1 have commented that Sauber had to sign their current two drivers for 2015 in order to be able to get funds to survive the winter, and they are still in a precarious financial position.

It is possible that Sauber may also face legal action from their other former driver, Adrian Sutil, according to Auto Motor Und Sport.

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The Texas 25% rule

When driving conditions are bad in Texas, the population of drivers can be divided into four categories:

25% of drivers drive as if it is a nice sunny day, and then some of them wonder why they just left the road, violated fundamental laws of physics etc.
25% of drivers set off at incredibly low speed, tiptoeing down the road with their nervous eyes darting around inside their head-on-a-swivel. They get in everybiody’s way and they are a menace because you don’t know what they are going to do next
25% of drivers adjust their driving to the conditions, and make it from point A to point B without getting in an accident or causing collateral damage
25% of drivers stay home

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The Dullness of modern F1 cars

A discussion has started up at James Allen’s blog about why modern f1 cars are deathly dull to look at. Here is my contribution.
The dullness of modern F1 cars is a combination of several factors:

1. Too much empty space on the cars. Teams cannot get sponsors, but they refuse to lower their rate cards. As a result, blank space predominates on many cars
2. Loss of sponsorship from B2C companies. Most sponsors are big-ticket B2B corporations, with very understated logos and images. They are not snazzy and exciting – they are not trying to attract Joe Blow and his family members
3. Perpetuation of a car shape profile that is based around irrelevant aero, and 18 inch rims, which no manufacturer would use on a performance road car.

Ideas for change?
Well, a cost cap with teeth is desperately needed, but it seems that the F1 governance model is broken right now, so that may be as likely as pigs flying. In the meantime, I want to see the axe taken to aero (no front and rear wings, partial wheel fairings, opening of underbody aero rules), a modest increase in horsepower (no, not 1000bhp, who apart from the factory teams can afford to pay for it?), harder tyres on 13 inch rims, and a move to social media the hell out of F1 weekends. Absent significant change in these key areas, F1 is going to continue as a declining sport based on a broken business model.

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