To have an easier time controlling the Squallo, enable the "Slow motion" code. The speed will be decreased, but the handling of the Squallo remains the same. Since the speed is less, the handling would seem better, allowing you to complete the mission without problems. Also, after complete it for the first time, every consecutive time after that, fog will appear that gets worse with each attempt. Enable the "Normal weather" code to make it disappear.

Enable the "Car floats on water", "Increase your vehicle's top speed" and "Better driving skills" codes. Drive a fast car into the water behind your boat, but not so far as you will drown when you get out or back in. Then, start the race with a boat. Jump out of your boat and run back to your car. You can complete the race a lot faster because you will not jump around on the waves and can turn easily.