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America's Cup holders Oracle will start their defence on Sunday minus-two potential points, after being found guilty of cheating by the international jury.
The jury released its penalties today which sees Oracle fine US$250,000 (NZ$321,000), three sailors banned from the entire cup series, and a fourth sailor banned for the first four races.
Half of the fine will go to the Andrew Simpson Foundation, established for the sailor killed in the capsize of the Swedish boat Artemis in May, and the other half will go to a charity to be nominated by the mayor of San Francisco.
New Zealand members of Oracle Matt Mitchell and Andrew Walker are among the banned quartet.
Mitchell is a grinder on the boat and will be sidelined for the first four races, while Walker is one of the team's boat builders.
Australian Bryce Ruthenberg is also on the shore team, involved in rigging, and Dutch sailor Dirk de Ridder's loss will be felt hard as he the wingsail trimmer and regarded as one of the best in the business.
The case against a fifth member of the Oracle teamreferred to as Sailor X, was dismissed and his name remains suppressed.
If the contest is close then Oracle's penalties could extend the finals series to 19 races.
The decisions were finally released today after an investigation was launched on August 4 into changes made to the smaller 45-foot catamarans used in the last two world series.
The jury found the sailors guilty of gross misconduct after adding weights and altering measurements to the AC45s used to win the last two world series titles, which they subsequently forfeited.
The Oracle syndicate was found guilty of bringing the America's Cup into disrepute.
It's a huge embarrassment to Larry Ellison's syndicate and a massive blow to their defence.
Oracle chief executive Sir Russell Coutts, told the jury he was "shocked and disappointed" by the actions. He described it as a "stupid thing to do" with the impact on the team over the past month being "hugely distracting" and "having to spend time on this [resulting in] lost days on the water at a critical time".
Oracle general manager Grant Simmer said that when he was advised of the situation he was "bitterly disappointed".
He said there had been "tremendous damage" to the team and that he had never come across a situation like this in nine previous America's Cup campaigns.
The jury said the "seriousness of the breaches cannot be underestimated".
The chairman of the measurement committee Nick Nicholson, who revealed the extent of the modifications, said: "I felt old, used and stupid ... our trust in the team had been betrayed, trust had been abused. If we can't deal in an atmosphere of a certain amount of trust, we simply cannot do our job."
Oracle's backup skipper Sir Ben Ainslie, a four times Olympic gold medallist and helmsman of one of the yachts (BAR Racing) involved in the scandal told the jury he was "surprised, disappointed, disgusted and angry at what had happened".
The jury didn't accept Oracle's excuses and even revealed there was an email trail around the illegal activities which involved the king posts on two of their boats. The jury was even left feeling there may have been more illegalities undiscovered.
"Most of those involved are experienced professional sailors or boat builders," the jury said.
"The stark reality is a series of breaches occurred over a period of time which clearly demonstrated that their systems were not adequate or robust, as demonstrated by multiple breaches at multiple events.
"It is not just the benefit of hindsight that it is evident that elementary and necessary precautions were not taken to prevent such breaches occurring. The jury failed to discover which individuals were responsible for all the breaches, resulting in concerns there may have been more.
"For example, there was evidence of a bag of lead being inserted into a king post but no evidence of who removed it or what happened to it. There were emails referring to 'fill king posts?' as if there was an intention to fill both king posts on boat BAR, but no evidence as to whether one king post was filled and emptied."
The jury said it didn't want to impose a penalty that was going to affect the outcome of the America's Cup, saying that should be decided on the water, not in the jury room. It said the penalties would have been heavier under different circumstances.
Team New Zealand presented submissions on the charge that Oracle had damaged the reputation of the cup.
They maintained Oracle's actions were designed to improve the performance of their boats.
Team New Zealand were also worried about the impact on their own sponsors while they waited to hear the outcome as the America's Cup "has often seen controversy, but not outright cheating".
Team New Zealand also felt the whole episode had "already damaged the brand and reputation of the America's Cup and sailing as a sport".
The rulings by the jury against the Oracle members read:
Ruthenberg is excluded from further participation in any role in the 34th America's Cup. RRSAC rule 69.1(c) requires the Jury to inform his national authority (Australian Yachting Federation) and the International Sailing Federation, which may impose further penalties. However, in view of his full, frank and early admissions, the jury recommended no further action be taken.
Walker is excluded from further participation in any role in the 34th America's Cup. RRSAC rule 69.1(c) requires the jury to inform his national authority (Yachting New Zealand) and the International Sailing Federation, which bodies may impose further penalties.
De Ridder is excluded from further participation in any role in the 34th America's Cup. RRSAC Rule 69.1(c) requires the Jury to inform his national authority (Koninklijk Nederlands Watersport Verbond) and the International Sailing Federation, which may impose further penalties.
Mitchell is excluded from sailing on a yacht competing in the match for the 34th America's Cup until four races have been completed. RRSAC Rule 69.1(c) requires the jury to inform his national authority (Yachting New Zealand) and the International Sailing Federation, which may impose further penalties. However, the jury will recommend that no further action be taken.
In addition, Kyle Langford was warned. In light of his age and inexperience in an America's Cup environment, the fact that he had no involvement in the work done and his truthfulness during the hearing, together with his sincere efforts to acquaint himself with the class rules since the matter came to light, Kyle Langford is warned to use his best endeavours not to be involved with any activity that may be in breach of a rule in the future. The Jury is not required to make a report to any federation.
- © Fairfax NZ News