Fear and Loathing in Switzerland

If the adage "rely on your first impression" is to be believed, Ernesto Bertarelli's Swiss-based challenge will be the Eddie Haskell of the next America's Cup Regatta.

Thus far, the Butterworth-Coutt's managed effort has acted like a tornado in a trailer park, leaving destruction, conflict, and dissension in its wake.  After striking a secret deal with Bertarelli while on the Team New Zealand payroll, they undertook a behind-the-scene effort to strip-mine the Defender of its talent under the guise of preparing to assume management of the Defense.

Butterworth and Coutts wasted little time in trying to pit challengers against each other when teams, such as Prada, refused to actively support the exemption of the Swiss challenge's sponsoring club from qualification and other requirements applicable to all other challengers.  When the Royal New Zealand Yacht Squadron did not immediately accept the Swiss' challenge Coutts and Butterworth shrilly protested and argued their case in the press, even though aware that their legal advisors had told them in 1997 that a challenge from Switzerland was inherently unqualified.

Finally, and currently, America's Cup precedent and rules notwithstanding, the Swiss seek a ruling that virtually all America's Cup nationality restrictions be abandoned by eliminating any requirement that a sailor or designer have even a remote contact with an employing team.  Quite a full plate for this newly formed cabal whose contacts with Switzerland are confined to the Rolex watches they sport.

Why all the ruckus?  Perhaps it is a vestigial recollection of the power once wielded while arbitrarily managing the last Cup regatta, while at the helm of the New Zealand defense.  The arrogance accorded by unilaterally exercising unlimited rule-making authority is no doubt a tough drug to kick.  On the other hand, the Swiss contentiousness may be an effort to reassure Mr. Bertarelli that he did not err in allowing Coutts and Butterworth unlimited discretion to manage the campaign; reassurance badly needed in light of the multiple miscalculations, errors in rules interpretations, and mishandled decisions during their first six months on the job.

Then again, the answer might be the much more simple motive of greed, the sin that got these misguided Kiwis to defect for greener pastures in the first place.  A deal with Coutts and Butterworth allowing them to keep what wasn't spent on the challenge campaign, coupled with their complete budgetary authority, probably seemed real sweet until they were confronted with something they had overlooked or misjudged:  That foreign design and sailing team members would need to bona fide residency and be physically present in Switzerland, something that wasn't part of the plan.

One wonders how in the world (no pun intended) anyone ever concluded that a credible Swiss Challenge, relying on non-nationals, could be built given the need to simultaneously qualify under the Protocol's "permanent residence" requirements.  Since it could be safely assumed that adopted design and crew nationals would be carefully scrutinized for nationality qualification, the casual manner in which compliance had previously been dealt with was not prudent and could result in more than the hand-slaps the Arbitration Panel issued when nationality rule violations were previously found.  Instead, because the Protocol had been beefed-up to require disqualification for infringement of nationality rules, mercenaries would now need to reside in some far-off adopted nation, in contrast to the lip-service with which those rules had been traditionally treated.

Mssers. Butterworth and Coutts, still bewitched with the power they once wielded, apparently thought themselves exempt from the need to actually establish crew and design team residency in Switzerland with all the attendant cost, expense, logistics, and inconvenience of such a substantial relocation.  Instead, their plan was to establish mail box addresses and rent some apartments, but the crew would remain and reside in New Zealand (except while training in the Mediterranean during the northern summers).  This would save a ton of money, funds that would flow to Coutts and Butterworth's bottom-line if not spent, while allowing the year-round ocean sailing program needed for a syndicate to be competitive.

That was the plan until the team's New Zealand legal advisors took a closer look at what the Protocol required and the consequence of non-compliance with nationality requirements, the due diligence that should have been undertaken to verify what was needed to establish permanent Swiss residency while simultaneously allowing the crew to train in ocean conditions emulative of the Hauraki Gulf.  Contrary to their assumptions, they were advised that the Protocol's exemption for residence while in New Zealand was not a substitute for the need to first establish and thereafter maintain permanent residence in Switzerland.  Only after Swiss residency was vested could they return to New Zealand, but only for the purpose of sailing, following which they must return to Switzerland.  As if that unanticipated expense was not enough, Coutts and Butterworth were also advised that, to establish bona fide residence, it would be necessary for the families of these foreigners to also reside with them in Switzerland.  So much for saving money.

The next shock was received when the Swiss rules advisors determined that the team's plan to establish a base for training during the summer in the Mediterranean was not feasible because of the simultaneous need for their physical presence in Switzerland beginning March 1, 2001, to establish residency.  There was no way the sailing team could physically reside in Switzerland (which doesn't border on the Med) and at the same time sail the week-long stretches required to hone crew skills and test designs.  The same problem confronted the designers, almost all of who are mercenaries needing to qualify as Swiss residents.  Design performance observation in the Med would be impossible while at the same time undertaking to establish a new permanent place of residence.  All of which left one choice for the Swiss since it was too late to find another country or club to compete for:  sailing on the serene and peaceful waters of Lake Geneva.

Which brings us back to the pending Swiss petition to castrate the America's Cup of its nationality appendage, the unique element that makes the event so contentiously interesting.  The Swiss petition is not motivated by any purported desire to strengthen the event or clarify ambiguity as claimed.  The simple and raw motive is to eliminate the cost to Billy and Russell of financially supporting the New Zealand village they must export and relocate to Switzerland in order to comply with the very Protocol they each had a very large part in drafting.  What was so fair, unambiguous, and acceptable when they were aboard the Black Boat has become suddenly vague, burdensome, and irrelevant once the operative color became green.  Isn't it amazing the influence money has over one's perceptions of fair play?

Now that reality has set in, Coutts and Butterworth are probably coming to realize the futility of trying to win the next America's Cup, or becoming rich by challenging from a land-locked nation with a mercenary crew of New Zealanders.  As the team packs up their Auckland base for Lake Geneva, and families get organized for a move half way around the world, they must wonder what in the heck Butterworth and Coutts were thinking when they secretly visited Switzerland a year ago to meet with Bertarelli.  Maybe they were just too busy thinking about how they would be spending their new loot.

Best advice to these guys:  Next time you consider jumping ship make sure the one you're jumping to can float!