Larry Ellison's Oracle Racing Accused Of Spying To Gain America's Cup Advantage

America's Cup Frontrunner Faces Shocking Accusation
Oracle Team USA Spithill competes in front of Artemis Racing Red of Sweden during the fleet finals of the America's Cup World Series sailing event in San Francisco, Sunday, Oct. 7, 2012. (AP Photo/George Nikitin)
Oracle Team USA Spithill competes in front of Artemis Racing Red of Sweden during the fleet finals of the America's Cup World Series sailing event in San Francisco, Sunday, Oct. 7, 2012. (AP Photo/George Nikitin)

Larry Ellison's America's Cup sailing team has been accused by its Italian competitor of spying, a practice as old as the 161-year-old America's Cup trophy that's the prize on the San Francisco Bay this summer.

Luna Rossa, the Italian team, contends in its formal protest to an international jury of sailing experts that Oracle Team USA sent a spy in an inflatable boat to take pictures of its 72-foot catamaran during training runs last month on the Hauraki Gulf in New Zealand.

Oracle broke an America's Cup protocol, Luna Rossa contends, by coming too close. Oracle admits it sent a man to observe -- just as its competitors sent spies to the San Francisco Bay to watch Oracle's boat before it capsized and broke apart in October -- but claims it broke no rules.

Welcome to the intrigue and gamesmanship of the America's Cup.

"It's part of the nature of this competition," said Dyer Jones, an America's Cup historian and CEO of the America's Cup Hall of Fame. "You get in the other guy's head."

Ellison, the billionaire who founded Oracle, has a lot at stake in winning this America's Cup. If he loses, the victor takes the cup back to its home harbor, and San Francisco -- where Ellison keeps a home overlooking the bay -- will lose the prestige and the millions of dollars that would come with future America's Cup races here.

When Ellison won the cup in 2010, he earned the right to choose the location of the 2013 series and to set the kind of boats to race -- 72-foot catamarans. Despite broad similarities required among the boats, design tweaks can mean the difference between winning and losing.

Ergo the spies.

Or observers, if you will.

In 1983, Australia II won the cup -- taking it away from American shores for the first time in the cup's 130-year history. The victory was largely credited to the boat's mysterious, cutting-edge "winged keel" that the crew shrouded each time it pulled the boat out of the water.

The team painted the keel with an optical illusion to disguise its true shape underwater, but a Canadian diver tried anyway to nab photographs before being hauled out himself. Rumors circulated of a mini-submarine lurking offshore.

Sometimes, though, spying is more intimidation than information gathering. In 1992, Bill Koch, the Florida millionaire financing the America3 team, admitted he outfitted bouys with bugging devices and parked a van on a bluff filled with electronic monitoring equipment as much to psych out his opponents as anything else.

The America's Cup governing body cracked down after that, banning helicopter and satellite surveillance and the use of eavesdropping devices. Teams were forbidden from tuning into another team's radio frequencies or hacking into their computers.

The rules also prohibit competitors from "navigating" within 200 meters of an opponent's boat "for the purpose of observing" -- the rule now at issue between Luna Rossa and Oracle.

A longtime observer of the Cup races and antics anticipates Oracle will have a novel defense: "We're not navigating. We're stopped. The boat happened to be sailing past us and we took photos as it passed."

Sized up against the history of espionage in the America's Cup, Oracle's alleged transgression is "pretty small fry," said Richard Gladwell, an editor at the Sail-World website based in Aukland, New Zealand.

Spies -- or observers -- have been frequently seen for months in the Hauraki Gulf, where both Luna Rossa and Emirates Team New Zealand are training, and around the San Francisco Bay, where Oracle and Sweden's Artemis Racing have been practicing. (Oracle's 72-footer has been under repair since its October capsize.)

Sometimes, crews on chase boats following their training boat will engage in witty repartee with the spy boats (some of the sailors are buddies from past sailing campaigns) and even toss them bottles of water. Or they may send a different message, staging a high-speed drive-by to send a roostertail of water to douse the spies and their cameras.

"All is fair in love and war. That is what it boils down to," said Tim Jeffery, spokesman for the America's Cup Event Authority.

"The teams are in the business of beating each other in order to win the America's Cup. The teams don't always wait for the start of Race 1 before locking horns."

America's Cup Capsize

Contact Julia Prodis Sulek at 408-279-3409 or follow her on Twitter @juliasulek. ___

(c)2012 the San Jose Mercury News (San Jose, Calif.)

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