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Grand Prix: Bahrain’s Formula for Profits over Human Rights

Grand Prix Scandal: Bahrain’s Formula for Profits over Human Rights

by Finian Cunningham
April 15, 2012

“A bunch of rich people having fun while others are being killed,” is how one motor-racing fan voiced his disgust over the decision for the Formula One Grand Prix to go ahead in Bahrain next weekend. For the past several weeks, there has been much speculation in the media about whether the sporting event watched by millions around the world would take place in Bahrain given the kingdom’s lethal crackdown on a pro-democracy movement since February 2011.

The decision by the Paris-based Federation Internationale Automobile (FIA) to give the Bahrain Grand Prix the green light has incensed the mainly Shia population of the Persian Gulf kingdom and many racing fans around the world who see it as putting commercial profits above the value of human life. This weekend saw more street demonstrations against the ruling US-backed Al Khalifa monarchy and predictably more state violence. Over the past year, more than 70 people have been killed by Saudi-backed forces propping up the Bahraini monarchy, which is closely aligned with the Saudi rulers.

Thousands have been injured and hundreds languish in jails, most of them sentenced by military courts simply because they attended pro-democracy protests calling for the Sunni royal family to give way to an elected government that would represent the 70 per cent Shia majority population of the Persian Gulf island. The latest victims of state violence include a 15-year-old boy who was critically wounded this weekend after regime forces opened fire on mourners at a funeral for another victim. So how could the FIA possibly permit the staging of the Bahrain Grand Prix given the evident background of violations? The short answer is: money – lots of it. Plus a noxious cocktail of politics and cronyism. The Formula One Grand Prix is an annual event held in 18 countries, including new venues such as Australia, Singapore, Malaysia, and the older classics in Britain, Monaco and Italy.

The latest stage was the Chinese Grand Prix held in Shanghai. Next weekend it moves to Bahrain, which is the fourth date in the annual schedule. The event is driven by three interlinked players: the FIA, Formula One Management, whose chief executive is billionaire British magnate Bernie Ecclestone, and the racing teams. The latter include big names, such as McLaren, Williams, Ferrari and Red Bull. All three parties are tied commercially together by the Concorde Agreement. The commercial fate of every party is dependent on the other and that would explain why there is conspiratorial silence in the face of Bahrain’s appalling violence against civilians and the decision to go ahead with the event. Last year, the event in Bahrain was cancelled after individual drivers, such as Damon Hill and Mark Webber, voiced reluctance to participate because of the crackdown against peaceful demonstrators. This year, there has been no repeat of the “driver rebellion”. Any rumblings of dissent have been on an anonymous basis in some media reports – suggesting that the consortium bosses are running their own internal campaign of repression. The Formula One consortium stands to rake in about $450 million in television rights from its two broadcasters, the BBC and Rupert Murdoch’s BskyB. Even more lucrative is the revenue from more than 100 brand names, which sponsor the event with a total bill of around $900 million.

These brand names, such as Marlboro, Benetton, Credit Suisse, Siemens and Sony, claw back some of that cost through monetized “exposure value” from the millions of TV viewers around the world. According to industry monitor Formula Money, the Bahrain Grand Prix is one of the best money spinners for sponsors. In the last event in 2010, Bahrain generated $90 million – twice the race average – for the 103 brand names posted on the circuit boards – higher exposure value than was gained from the five oldest sport venues of Belgium, Britain, Germany, Italy and Monaco. For the Bahraini rulers, staging the Grand Prix brings its own sort of “exposure value”.

The cancellation of last year’s event is reckoned to have cost the kingdom some $400 million in tourism losses after thousands of mainly wealthy foreign spectators bypassed the island. Over the past year, Bahrain’s national economy has been on the slide with investors and financial companies taking fright over the ongoing violence and seeking safer havens in the Gulf, such as Qatar and Dubai. Perhaps even more important for the Bahraini rulers is to try to revamp its tarnished image as a vicious repressive regime. The staging of the Grand Prix is a desperate attempt by the regime to send out an image that “all is well” on the island. Nabeel Rajab of the Bahrain Centre for Human Rights says: “The race will give the impression that everything is back to normal when everything is not back to normal. People are dying on a daily basis.”

The Al Khalifa regime has hired several British and American PR companies to project a positive spotlight on the kingdom while playing down violations and violence. One of the rulers’ best unofficial PR assets is the former Scotland Yard police chief John Yates who was brought in to oversee the Bahraini police force last December. Yates has been busy recommending to the international media that the Bahrain Grand Prix goes ahead this year. He has belittled the protesters as “youths throwing Molotov cocktails” and said that he personally “felt safer in Bahrain than in London”. What the British police chief did not disclose is that half of all people who have died from excessive tear gas deployed by state security forces have done so under his watch.

Then there is the web of personal relationships between the Formula One fraternity and the Al Khalifa royal family. The current president of the FIA, Jean Todt, was elected in 2009 with the help of Bahraini royal Shaikh Abdullah Bin Isa Al Khalifa (brother of the king) who is the head of the Automobile Federation of Bahrain. Bahrain’s Crown Prince Salman Bin Hamad Al Khalifa, who is the chief executive of the Bahrain International Circuit, is a shareholder in the ART Grand Prix team owned by Nicolas Todt, the son of Jean Todt. Crown Prince Salman is also a close friend of Bernie Ecclestone, the Formula One supremo.

Indeed, when Ecclestone was quoted recently in the media about the race going to Bahrain he said somewhat absurdly: “All the teams are happy to be there. There’s nothing happening. I know people who live there and it’s all very quiet and peaceful.” And he went to mention that one of his sources for information on what is happening in Bahrain is Crown Prince Salman. A crucial linchpin in the Grand Prix money chain is the Bahraini royal family’s sovereign wealth fund, known as Mumtalakat. The fund has investments worth $9 billion in some 35 commercial international companies. One of those companies is McLaren Group, which owns the McLaren Formula One racing team.

The Bahraini sovereign wealth fund first bought a 30 per cent holding in early 2008 but since then it has become the major 50 per cent shareholder, having bought out the car giant Daimler. When the cars screech down the track next weekend at the opening of the Bahrain Formula One Grand Prix, the checkered flag will take on a new meaning: profits, politics and personal cronyism come way ahead of human rights. As the racing fan said: “A bunch of rich people having fun while others are being killed.”

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Finian Cunningham is Global Research’s Middle East and East Africa Correspondent.

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