in circulation

The Guardian is trying to crowdsource info on Tony Blair’s opaque financial arrangements, which remind this ignoramus of the bit in Martin Amis’ Money where John Self is induced to sign contracts to and with himself:

Windrush Ventures No 3 LP, for example, consists on paper of a partnership between an entity owned by Blair himself and an anonymous off-the-shelf company.

This off-the-shelf company, which appears to have been set up by Alex Harle, Blair's lawyer at the Westminster solicitors Bircham, Dyson Bell, is merely called BDBCO No 819 Ltd.

Set up as a nominee company to act as a trustee or an executor of a will, this entity does not reveal its ownership on records at Companies House. Instead, its shares are listed as held by a second off-the-shelf entity, BDBCO No 822.

This company in turn conceals its true ownership. Its shares are listed as held by the lawyers, acting as nominees.

The FT notes that he’s circulating money round his various trusts to enable each to show a profit. There also seems to be something of an institutional commingling between his commercial ventures and various foundation monies he gets for charitable purposes. Maybe the purpose of the structure is to enable this. The income generation strategy appears to be to get into the middle of things and leverage them in every direction. He seems to have inserted himself into Libyan politics, for instance, in order to say that he has a relationship to the Ghadaffis, which he can then presumably parlay into various commercial contracts with people wanting to use that. It’s unclear to me why these parties would need this. And then there’s this, from the FT:

Mr Blair’s main priority while travelling around the Arabian peninsula and as far as central Asia is to raise money for Palestinian development. But when appropriate, he has taken the opportunity to drum up interest in his charities or introduce his new business venture: Tony Blair Associates.

Ah, the Palestinians. Let's think about the poor, sufferin’ Palestinians for a moment. Well, enough of that. Have you seen my brochure?

Meanwhile, he’s apparently employing eighty staff, has around £12 million in mortgage commitments, is paying half a million a year office rent and is flying round all over the place. The bills for lawyers and accountants must be phenomenal too. A cheque’s also apparently in the post from the UAE. Ho ho. 

The Guardian estimates that Blair could be pulling in $14 million. But £4.6 million of that is apparently an advance on his autobiography. There's a supposedly million dollar advance from some speaker's bureau, plus keynotes and $100,000 a pop, plus charitable donations mentioned in the article totalling roughly five million. Given his outlay, his actual business doesn't appear to be bringing in all that much money.

Well it looks rackety enough, but then complex things often do to the uninitiated. Any thoughts?

Comments

[Richard J]

Someone with some experience in tax structuring writes:

Fuck knows. Personal tax planning isn't really my speciality, but none of it makes much sense on first sight. Why use an LP and an LLP? Why have a 30 April y/e, which has cash flow advantages only for an individual sole trader (or partner in a trading partnership). Why have numerous companies under common control, which knocks their tax bands down? All very weird, if I'm being honest.

The cynic in me notes that the Guardian now knows the difference between a limited partnership and a company, after that whole Tesco libel affair.

[Richard J]

All very weird

Not in an 'anything dodgy' sense of the phrase. Just genuine mystification as to what exactly it's meant to do. Then again, it has the sniff of inheritance tax planning, which is something I've never touched.

[Alex]

This thing of charging one of his companies "management fees" from another - where he's on both sides of the table - looks dodgy. Not only is it how Conrad Black used to do things before his unfortunate jail problem, it's also one way to extract quasi-profit from a non-profit organisation. (Compare to the affairs of Very Big Trade Association, with its various interlocking limited by guarantee companies and US 501(3)c lobby groups that essentially suck its surplus into a Delaware 501(3)c that then pays out quite impressive salaries.)

[Richard J]

This thing of charging one of his companies "management fees" from another - where he's on both sides of the table - looks dodgy. Not only is it how Conrad Black used to do things before his unfortunate jail problem, it's also one way to extract quasi-profit from a non-profit organisation.

Not necessarily - it can be used dodgily, but it's also a legimate way of moving profits round a corporate group - there's transfer pricing concerns, but it's not in itself evidence of wrongdoing. Where Conrad Black was doing was using management charges to move profits from one group of beneficial owners (i.e. the shareholders) to a much smaller group (i.e himself and his mates)...

[Chris Williams]

Legacies . . . Here's a hypothesis: for some reasonably well understood reasons, Leo's arrival made TB retreat mentally into family-centred world, where he prioritised the future well-being of his son over that of the rest of us. Did his dodgy Silvio links increase from that date?

[Laban]

Tax Research Blog

The limited liability partnership is tax transparent. If it had Tony Blair as a member he would pay tax at the UK highest income tax rate. So two companies are put in his place as members, and because of the loophole in the limited partnership accounting regulations this is acceptable: it does not change the fact that the limited partnership will not have to file accounts.

And then the two companies are owned by nominees to hide the Blair involvement – it’s just a pity one set of accounts had to give it away that he was the beneficial owner or we might still be unaware of all this.

So what did Tony want? Just a bit of secrecy and his profits sheltered at corporate tax rates seems the superficial answer.

But hang on – this structure came at some price, and has some cost to run – five figures a year with a first digit of more than one I suspect. So why do that? Because the entity at the top of the pile – Windrush Ventures No 3 Limited Partnership now has what most people want from a secrecy jurisdiction – complete secrecy and lower tax than might otherwise be expected, and all onshore.

So there is an obvious question outstanding still. Just what is it that Tony is so keen to hide that he’ll go to this length and this cost to do so?

[Richard J]

Hmm. I think that seems eminently plausible, once you strip out the usual Richard Murphy spin (notice he contradicts himself about the tax efficiency of the structure in his post - his first statement that it's not tax efficient is the correct one, in my view). It's a strangely elaborate way of going about the goal of getting some privacy about your affairs without going offshore. Typical bloody lawyer-work, if you ask me. They're not the ones who have to do the accounting/tax returns. (Mumble mumble grumble.)

[Tom Scudder]

There are many plausible ways to spell Col. Qadafi's name. Starting with a "Gh" is not one of them.

Please, think of the children!

[jamie]

Well there are so many of them that I decided to revert to the comforting certitudes of my childhood, when it were all green fields round here, the place wasn't full of foreigners and their funny cooking smells and Ghadaffi was spelled GH and bloody well liked it.

[Tom Scudder]

Just bear in mind that that spelling causes actual physical pain to the Arabic-literate among your audience. Which might be a feature as far as I know.

(Quick and dirty guide to spelling The Guide's name: Q or G for the first consonant, single or double-D for the middle, with trailing h optional, single or double f for the final consonant; a / a / (y or i) for the vowels.)

[ajay]

Great. 32 possible correct ways of spelling it and jamie manages one that's actually provably wrong. What are the odds?

I agree, incidentally, that we should be able to spell Ghadarphi however we want, even if it's "wrong", cf. Churchill constantly referring to "narzies".

[jamie]

That's odd because what I did was revert to the spelling that all the British newspapers traditionally used. I'd always assumed that all the different spellings you see more recently was because there wasn't a settled English version of the name and that different newspapers versions were branding exercises (Qadafi - ONLY in the New York Times). So also Hez/Hiz/bollah. So I just went with what I was used to.

Up here, incidentally, the G-stroke-Q man is usually pronounced Gerdaffy when he makes the local news, with the emphasis on the "da"

[alle]

(Quick and dirty guide to spelling The Guide's name: Q or G for the first consonant, single or double-D for the middle, with trailing h optional, single or double f for the final consonant; a / a / (y or i) for the vowels.)

You're forgetting the article: al, al-, Al, Al-, el, el-, El, El-, or even, why not, some variety of ul; also, the various ways of signifying vowel length (a, á, aa). And then there's his first name.

As for his own preference, he once signed a Latin-lettered letter "Gathafi", but judging from his website he seems to have decided on different spellings for different languages, of which the Italian one actually starts with a Gh. So there.

[Phil]

A pedant writes: the Italian one only starts with a Gh because it's got an E as the first vowel, not an A; "Gedaffi" without the H would be pronounced "Jed-". Just saying.

What struck me about that page is that the canonical English spelling apparently doesn't use al, al-, Al, Al-, el, el-, El, El- or even, why not, some variety of ul; in English he's AL Gathafi, like AL Kennedy.