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Red Bull’s Budget Cap Breach – the full timeline

F1’s most contentious off-track incident during 2022 was arguably Red Bull’s budget cap breach. Here RacingNews365 Editorial Director Dieter Rencken runs through the timeline of the matter, which ran for almost five months.

Monday June 6, Paris The FIA announces it has entered into an Accepted Breach Agreement with Williams after the team committed a procedural (i.e., timing or reporting) breach of the 2021 Financial Regulations. A cap of $145m was imposed on all teams (excluding accommodation, marketing, hospitality, travel costs and top three executive salaries) to control costs. The reporting deadline is 31 March for the previous year. No details are released about the transgression, save the team is fined $25,000 and ordered to pay costs of the process. Thursday 30 September, Singapore 16:00 Rumours emerge that two teams, including a top three team, committed transgressions of the 2021 Financial Regulations. Mercedes and Ferrari hit out at the alleged transgressors, creating suspicions that Red Bull and one unnamed - later mooted as being Aston Martin – are the transgressors. Outlandish overspends of up $10m are claimed by some Italian and German media outlets. 18:00 Red Bull and Aston Martin both deny culpability, claiming to have filed support documentation well under the cap, but offer no further comment. They demand an investigation into the source of the leaks. Friday 1 October, Singapore The governing body slams "unwarranted speculation" and denies its personnel leaked the information. It promises to publish its budget cap findings that week; subsequently these are delayed.

Budget cap breaches are announced

Monday, 10 October, Paris 09:00 The FIA confirms Red Bull overspent by an unspecified amount albeit under 5% - a so-called ‘minor breach’ - and committed paperwork irregularities, while Aston Martin is found in procedural breach. The governing body undertakes to reveal details after consultative processes with the respective teams. These will commence before the United States Grand Prix (20-23 October), then continue as required. Team boss Christian Horner again demands an enquiry into the Singapore leaks. Suspicions fall on the FIA’s (Interim) Secretary for Sport Shaila-Ann Rao, formerly Mercedes F1 Legal Counsel and Special Adviser, and said to still have an open door to the team. The FIA denies the allegations. Monday 17 October, Woking McLaren CEO Zak Brown addresses a letter to the FIA in which the American accuses teams who overspent of "cheating." In the letter - seen by RacingNews365.com - he writes: "One team was guilty of a minor overspend breach plus a procedural breach, and two further teams were also in procedural breach. "The overspend breach, and possibly the procedural breaches, constitute cheating by offering significant advantages across the technical, sporting, and financial regulations." Significantly, the letter is copied to those six teams who received clearance certificates, but not to Red Bull Racing, Aston Martin nor Williams…

The United States Grand Prix weekend

Thursday 20 October, Austin 14:00 Seven-time world champion Lewis Hamilton - who narrowly lost the 2021 championship to Red Bull's Max Verstappen previously suggested $1m could make 0.30 seconds of lap time difference to car performance - wades into the controversy during the FIA Driver Press Conference. "I think the sport needs to do something about this," he says. "Otherwise if it’s quite relaxed, if they’re relaxed with these rules, then all the teams will just go over. "Spending millions more and then only having a slap on the wrist is obviously not going to be great for the sport. [F1] might as well not have a cost cap [in that case]." 16:00 Upon arrival in Austin for the USGP, Red Bull decline to comment save for protesting its innocence and stressing its original submissions were approximately $4m under the cap. It emerges that overspends on staff catering, failure to correctly claim engineering rebates, incorrect allocations of severance pay and sick leave combined to push the team $5.8m over the cap, resulting in a swing of $1.8m. Aston Martin refuses to comment save for an admission by Team Principal Mike Krack that: "We are in discussions with the FIA. "I think it will be something that we try to conclude in the next days; we had some discussions over the weekend as well with them and I'm quite confident we get it solved." Saturday 22 October, Austin 10:00 Horner, Brown and Williams team boss Jost Capito attend the FIA’s Saturday Press Conference. Last-named claims his team’s breach arose due to a supplier not timeously filing paperwork prior to the 31st March 2022 deadline. Horner reveals that Red Bull's submissions ran to 75,000 individual line items, all of which needed to be checked internally and by the FIA’s Head of Cost Cap Administration Frederico Lodi and his team. Horner hits back at Brown, saying of his letter: "For a fellow competitor to be accusing you of cheating, to accuse you of fraudulent activity, is shocking. "It’s absolutely shocking that another competitor, without the facts, without any knowledge of the details, can make that kind of accusation. We've been on trial because of public accusations since Singapore. "Numbers have been put out in the media that are miles out of reality, and the damage that does to the brand, to our partners, to our drivers, to our workforce, in an age where mental health is prevalent, we're seeing significant issues within our workforce." Brown defends the letter, saying: "If a team spends more than the cap, they're going to get an advantage. The cap is a rule, no different than technical rules in the sport. We're not taking a view whether they did or didn't. "My letter was: if someone has [been in breach], then here are the things that we think should be addressed. No different than if a ride height is incorrect, or a flexi wing, or whatever the case may be," he explains. "However, the trio agree the 5% window for ‘minor overspend breaches’ - which trigger ABAs to save teams appearing before the Cost Cap Adjudication Committee, effectively the High Court for financial matters - is too high given that ‘minor breaches’ could range up to $7.25m on a $145m cap. 12:00 Talks between the FIA and Red Bull are scheduled for noon, with shuttling of key personnel between Red Bull’s hospitality and the FIA’s offices situated in the control tower in evidence. Meetings are held between senior FIA officials including President Mohammed Ben Sulayem, Lodi and Rao, and Red Bull senior management. The presence of technical chief Adrian Newey at these meetings suggests sporting or technical penalties in addition to a fine. 14:00 It emerges that Red Bull co-founder Dietrich Mateschitz, not seen in public for a year, succumbed to a long illness at his home in Austria. Talks are postponed out of respect to the man who was arguably this century’s biggest motorsport benefactor, being not only a double F1 team owner and Austria’s Grand Prix promoter, but sponsor of numerous teams competing in international two- and four-wheel series.

Penalties are revealed for breaches

Tuesday 25 October Talks resume via teleconferencing - Red Bull executives are congregated in Cancun, Austria and Milton Keynes (UK); Aston Martin’s are in Silverstone (UK) and Mexico City while FIA officials are spread across Paris, Mexico and Geneva. Sources advise RacingNews365.com that both teams are prepared to enter into ABAs with the governing body. Talk is of a heavy fine for Aston Martin, with Red Bull likely facing heavier fines plus aerodynamic restrictions. Wednesday 26 October ABAs and applicable sanctions are formally agreed but need to be ratified by FIA President Ben Sulayem with support from the FIA WMSC. Mateschitz’s passing complicates Red Bull’s reporting structures but a deal is done; Aston Martin Chairman and CEO Martin Whitmarsh accept their breach and sanction. Thursday 27 October Red Bull calls a press conference for 11am Mexican time on Friday after the FIA grants permission to use the room usually reserved for official gatherings. Friday 28 October 9:00 The FIA releases details of Red Bull’s breach, finding the team overspent in four main areas amounting to a total of $5.8m, which after the $4m under-submission created an overspend as follows: Internal costs incorrectly booked for severance payments and sick leave Overspend on catering costs which should have been split into F1 departments and other Incorrect allocation of development and excess parts Tax rebates for research and development, also outside the cap if correctly accounted for Clerical errors pertaining to charges booked to Red Bull Powertrains (which is outside the cap) However, the FIA found that certain errors were incurred due to differing interpretations of the regulations. Crucially, it found the team "had not acted in bad faith or in a dishonest or fraudulent manner, nor wilfully concealed information from the Cost Cap Administration or gained or sought to gain any advantage from inaccurate exclusions or adjustments of certain costs." After adjustments for interpretations Red Bull incurred an overspend of $400,000, or 0.37% of the cap. However, the team is fined $7m and has its aerodynamic testing allowance reduced by 10% for a period of 12 months, effective immediately. The team is also ordered to pay the assessed costs of the ABA process. 10:00 Details of Aston Martin’s breach are released: Despite finding the team underspent (by $2m) it is found in procedural breach due to understatements for research and development tax credits (as per Red Bull). As with Red Bull, the FIA also found no evidence that the team "acted in bad faith or in a dishonest or a fraudulent manner, nor had it wilfully concealed information from the Cost Cap Administration or gained or sought to gain any advantage from inaccurate exclusions or adjustments of certain costs." The team is fined $450,000 plus costs of the ABA process. 11:00 Red Bull calls a media conference during which Horner clarifies Red Bull’s position and explains the background to the breach. He calls the penalties "draconian" and claims aerodynamic restrictions could amount to a loss of half-a-second in lap time, but says Red Bull accepts the sanctions albeit not as an admission of guilt – but due to interpretative differences with what are immature regulations. He also reveals that on Japanese Grand Prix Sunday, immediately after Verstappen clinched his second title, he received a call from Rao advising him of the breach. She is said to have congratulated him on the team’s success, then suggested: "Do not to celebrate too hard as you were found in breach…" Horner continues: "Had we dragged it through the administration process, then gone to appeal that could have taken months. "Beyond that, the International Court of Appeal could have taken [more time]. We could have been looking at a 12-month period to have this situation closed. "The amount of speculation, commenting and sniping that has been going on in the paddock, we felt it was in everybody's interests - in our interests, the FIA's interests, in Formula 1's interests - to say we close the book. "We close the book here, today. We accept the penalties begrudgingly, but we accept them," he concludes. Note: As per FIA convention, all values expressed in US$.

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