This is letter was obtained by Hydro-News from an anonymous source and is published in its entirety without bias and limited editing, only for legal reasons.
<H1 Letter 7-18-14 Final Final Revised.docx>
H1 Chairman and Board:
The 2014 Diamond Cup is officially canceled. We would like to enlighten this board on our opinion as to the five reasons why we believe that this has come about.
1. Sam Cole started an email campaign in January of 2014 in which he notified people outside of the owners of Diamond Cup Unlimited, LLC that the Company was in arrears and that he was demanding payment. A local individual named XXXXXX was one of the recipients of Mr. Cole’s emails. Word got to us from XXXXXX, in January that Sam Cole was personally interested in owning the rights to the Diamond Cup. XXXXXX subsequently notified an employee of a local boat dealership, which is owned by the owner of the local newspaper (the Coeur d’Alene Press), of the personal financial dealings between H1 and the Diamond Cup (since XXXXXX had received the financial information from Sam Cole without the authorization of Diamond Cup Unlimited). The information was soon thereafter printed in the Coeur d' Alene Press in February, along with several damaging quotes directly from Sam Cole regarding our private business dealings with H1.
We had spent every single day from the end of the race to that point in time trying to secure sponsorship or a loan to take care of the H1 debt. Of course, after the Coeur d' Alene Press article, local resources were reluctant to support the race, and so we started looking harder outside of the area. Cole and XXXXXX continued, we believe, to “feed” the local paper with damaging proprietary and personal financial information so as to inhibit and impede our ability to raise outside financing.
2. We are aware that Sam Cole made contact with potential major sponsorship sources in an attempt to gain support for his alternate group of race organizers. Among those contacted was Craig Brosenne of the Hagadone Corporation. According to Brosenne, Cole advised him of his intention to take over the race and asked if the Brosenne’s employer (the Hagadone Corporation) was interested in coming on board. Brosenne told us in a face-to-face meeting that the Hagadone group had declined the offer.
3. In the wake of the e-mail campaign, we received notification from a representative of the Inland Northwest Bank (INB) of Spokane, Washington, the banking institution responsible for the banking activities of Diamond Cup LLC, that Sam Cole had contacted his office in what we believe to be an effort to procure the suspension of ticket sales for the 2014 Labor Day event. He advised the banker that tickets should not be sold for the 2014 race because of the Diamond Cup LLC’s financial situation. Cole made such contacts, we believe, with actual knowledge that he was interfering with our business relationship with both INB and TicketsWest, the event’s ticket provider.
4. Sam Cole, who is the Chairman of H1, has not provided anything but headaches for a new race organization. He offered very little in guidelines, absolutely no financing, and unlike other national racing organizations, he offered little media attention and no sponsorships. We know that we are not the only struggling venue, so either the interest in hydroplanes has dropped significantly or the leadership has failed significantly. We are wondering if Sam Cole openly discussed the financial shortcomings of the San Diego or the Sacramento races in their daily newspaper. We have our doubts, and we continue to question how maligning us was going to help get our bills paid (aside from what appear to be improper business practices in sharing such information without our consent).
5. We take ownership of the financial shortcomings for the first Diamond Cup race in 45 years, but with the problems we were having, we expected to be supported by the Hydroplane community and H1 in particular, instead of the constant public criticism and negativity that we have never recovered from.
We have retained all the structural permits required to carry the Diamond Cup forward to 2014, but in part because of the funding struggles and the Sheriff’s singular effort to refuse to accept an application for a Marine Event permit in conformity with his statutory obligations, we could not deliver a race this year. Regardless of what XXXXXX may have told you, we have not been offered a buyout. The Diamond Cup could be for sale, but anyone choosing to go around us will find that we have the 3 year Idaho Department of Lands permit, the Idaho Parks and Rec. permit, and the Idaho Transportation permit, all of which are necessary for this race to occur.
Additionally, we had secured funding subject to the issuance of all permits, We are reviewing our options regarding the legality of the Sheriff's financial and other demands that he set forth as conditions for the issuance of the Marine Event permit.
We have worked tirelessly on the 2014 Diamond Cup at the expense of our own finances, families, and mental well- being. If effort was the only thing required, this event would be happening twice this year.
Diamond Cup Unlimited, LLC