Clouds darken above ALMS racer Scott Tucker

An investigative report characterizes Level 5 Motorsports owner/driver Scott Tucker as a payday-loan magnate 
whose businesses have been essentially untouchable because of the affiliation with Native American tribes.

Professional race-car driver and team owner Scott Tucker, who, according to his Web site, has trademarked his own name--Scott Tucker™--does not like to lose.

He didn't lose at the May 12 American Le Mans Series race at Mazda Raceway Laguna Seca, where Tucker took a win in the LMP2 class, even though the No. 055 HPD ARX-03b that Tucker started in the race crashed and was sidelined for more than 30 minutes for extensive repairs, including a new rear axle.

Fortunately for Tucker, he also entered the No. 95 HPD ARX-03b, for which he was also listed as a driver, and that car won its class. So Scott Tucker won, and he also officially finished third in the No. 055 after it was repaired. He also won that same weekend in two Cooper Tires Prototype Lites races and competed in both IMSA Porsche GT3 Cup races, making for five races in one weekend, including the six-hour ALMS enduro.

But Tucker, 50, has been racing under a cloud since Sept. 26, 2011. That's when the Center for Public Integrity--which describes itself as “one of the country's oldest and largest nonpartisan, nonprofit investigative news organizations”--published a story online called, “Payday Lending Bankrolls Auto Racer's Fortune,” a joint investigation of the Center's iWatch News and CBS News, which also aired a TV story on Tucker.

The cloud became darker in April this year, when the Federal Trade Commission announced that it was going after AMG Services, a company Tucker supposedly controls. The FTC asked a judge to stop the payday-loan practice and order the company to pay back borrowers who were overcharged. 

According to iWatch, Tucker and his race team, Level 5 Motorsports, are named in the proceedings.

A bone of contention is that the FTC and other investigations say that Tucker and other payday-loan companies have affiliated with Native American tribes--called “rent-a-tribes” by critics--and use the tribes' sovereign immunity to avoid scrutiny. According to the FTC, Tucker has spent $40 million in payday-loan revenue on his racing.

If this has slowed Tucker on the track or off, it doesn't show. His schedule this year includes all of the ALMS races, as well as races in the Prototype Lites, the IMSA GT3 Cup Championship and the World Endurance Championship. Tucker has also raced in Grand-Am and in the Ferrari Challenge.

He is also the three-time defending national champion of the Sports Car Club of America Runoffs, winning last year in the STO class in his twin-turbo Porsche 996. Not many competitors in the SCCA amateur runoffs also race in the 24 Hours of Le Mans and the 12 Hours of Sebring, but Tucker apparently has never met a series he doesn't like.

Tucker, who started racing in 2006, also hired the best talent money can buy. Co-drivers in various series for his Wisconsin-based Level 5 team have included his ALMS teammates at Laguna--Christophe Bouchut, Franck Montagny and Luis Díaz--and big names such as Sébastien Bourdais and Ryan Hunter-Reay, plus Andy Wallace, Lucas Luhr, João Barbosa, Raphael Matos, Emmanuel Collard and Sascha Maassen. His Level 5 crew and equipment are regarded as top-notch.

Though a giddy 2010 Wall Street Journal profile of Tucker and his racing described him as “a wealthy private investor from Leawood, Kan.,” who made his money as “an investor in real estate, hotels, restaurants, Internet companies, loan companies and car dealerships,” the subsequent investigative reports characterized Tucker as a payday-loan magnate whose businesses have been essentially untouchable because of the affiliation with Native American tribes.

Scott Tucker, left, and Luis Diaz drive for Level 5 Motorsports in the American 
Le Mans Series.

Online payday-loan sites make short-term loans at high interest rates, which, in theory, are to tide borrowers over until their next payday. The problem, the critics claim, is that companies such as those they associated with Tucker charge interest rates that can exceed legal limits. The iWatch series noted one agreement that had an annual percentage rate of 644.12 percent. 

Proponents of payday lending say that the loans are designed to be short-term, and it is only when the loan is “renewed” every two weeks or so that the interest rates become astronomical. Pay the loans on time, and the interest rates are quite high--understandable because of the lack of security the loan companies have--but not exorbitant.

Because of the tribes' “sovereign immunity,” financial details of their affiliated payday-loan businesses are difficult to come by, not just for the media but for the state and federal governments. The iWatch story, the first in a series, began with this: “High-interest payday lenders are teaming up with Native Americans to shield their online businesses from lawsuits and consumer-lending regulations by claiming tribal-nation sovereignty.”

Though there are multiple payday-loan businesses--and at least one Web site that seeks to match deep-pocketed investors with willing tribes--the iWatch series focused on Tucker, who declined to be interviewed for the stories despite attempts to get quotes from him at races. At Mazda Raceway Laguna Seca in May, Tucker was surrounded by security for parts of the weekend. Multiple states have investigated Tucker's business interests (payday loans are, in fact, illegal in some states), but those investigations have been ineffective. The FTC's interest, though, may be a different story.

As for Tucker, his public-relations representative last week indicated he might be willing to participate in this story, but that was as far it went. However, Tucker did do a short question-and-answer session with Autoweek (see below) after the iWatch stories and CBS broadcast aired.

Meanwhile, a fellow sports-car competitor who says he is a friend of Tucker's but does not want to be identified, defended his colleague.

“Scott is a clean racer, employs a lot of people and pays them well and has done a lot more for racing than racing has done for him. Those who resent him are probably jealous; he's a rich guy who races at the top level. He minds his own business, and we should mind ours.”

Scott Tucker

Scott Tucker interview:

Autoweek: How long have you been racing, and in how many series?

Scott Tucker: I have been racing since 2006. I started a little later in life than most drivers, but I jumped in with both feet and started driving any car, any series I could. I have raced in almost every series in North America as well as a few in Europe. I had my first real taste of success in the Ferrari Challenge Series and now have more wins in that series than any other driver. I have three consecutive SCCA National Championships and I have earned a podium finish at the 24 Hours of Daytona in the Grand-Am Rolex Sports Car Series, IMSA GT3 Cup and Cooper Tires Prototype Lites Championship, but, I took the whole racing program to another level when we joined the American Le Mans Series in 2010.

We won the LMPC Championship that year and I was named their rookie of the year, along with class wins at both Sebring and Petit Le Mans. In 2011, along with the ALMS we competed in the Intercontinental Le Mans Cup with a podium finish at the 24 Hours of Lemans and class wins at Sebring and Petit Le Mans. We won the ALMS LMP2 drivers' championship and teams' championship.

AW: What drew you to motorsports?

ST: I have always been interested in cars and motorsports, but it was never at a high level. I never had the personal time to commit to it when I was young enough to really make a career out of it. In 2006, I decided I was going to give it a try. My first few years were very tough. I worked very hard and was able to start seeing some personal growth in my driving and success on track. That initial success made me even hungrier and propelled me to work even harder. I feel like I am at a point now in my racing career where I am efficient with my time, and that I choose to only focus on the things that are the best for myself personally and the team to achieve our goals.

AW: What does the Level 5 name mean?

ST: Level 5's name came from a business management book I read called Good to Great by Jim Collins. It is a management book that really captured some concepts I believe in. Essentially, it is about building an organization of talented people who are all committed to improving individually and as a group, called Level 5 candidates. That is the sort of mentality that we want to install at all levels of our organization. We've got a strong team and we want to empower them to contribute to the success and enjoy what goes along with that. When I formed Level 5, this was not only our team charter, but also personally for me as a driver.

AW: You employ a lot of people at Level 5.

ST: We started Level 5 when the economic downturn had hit the hardest. Still, we were able to employ some great people at a time when unfortunately they were losing their other jobs. I am very proud to say Level 5 Motorsports employs many full time motorsport professionals, a whole lot more who help us on a part-time basis. Level 5's employment has provided security and benefits for them and their families when several teams in the industry were laying people off and cutting benefits for wives and children.

When we set out to build our racing organization, the goal was to create a team comprised of the best people and the best equipment. There is no doubt that we have attracted some of the best people in racing. We would like to think our program is one of the best in the world--in any form of racing--but what really makes it great is not the dollars invested but the people who contribute day in and day out to making the organization what it is. And you can't buy that.

AW: So far, Level 5 has been strictly sports cars. Any open wheel or stock-car intentions?

ST: No, not personally at this time, but I do sponsor a few young kids that easily have the potential to be successful in these types of motorsport.

AW: Are you a “car guy,” or is your interest strictly racing?

ST: I am a total car guy. I have loved cars or anything with wheels since I was a young boy and played with my first Hot Wheels car.

AW: What do you drive daily on the rare occasions when you are home?

ST: I am a big fan of many makes and models, way too many to mention. [Note: In a 2010 Wall Street Journal story, Tucker was driving a Ferrari F430.]

AW: Can you explain the sponsor connections on your cars, such as Microsoft Office?

ST: We have a great marketing firm that has put together some unique marketing programs around the team. All of our partners have gotten involved because the Level 5 organization allows them to access a very powerful promotional engine.

AW: What personal and professional impact has the publicity about your business interests had on you and your family—and, for that matter, do you have a family?

ST: As a successful entrepreneur and race-car driver, I suppose I am an attractive target. I intend to continue pursuing my business interests and my racing career in spite of these attacks. As a matter of safety and privacy, I prefer not to reveal anything other than I have a terrific wife and two loving daughters.

AW: How do you characterize the CBS broadcast and the ongoing reports by iWatch?

ST: I was disappointed by the slanted story that has been circulated.

AW: How has the racing community treated you since then?

ST: My friends in the racing industry have been very gracious and I am tremendously grateful for their support.

AW: Native American tribes do business with hundreds of companies. Why do you feel you were singled out?

ST: I have no control over people's misperceptions, and I really don't understand their motivations. I can only assume that my success as an entrepreneur and race-car driver made me an attractive target.