Its members are Windrush Ventures Limited and Windrush Ventures No. 1 Limited (they certainly exercised their imaginations when naming this lot).
KPMG audited it, which leaves me overflowing with confidence.
It turned over £6.8 million and made a profit of £350,000 from December 2007 to April 2009. We know from the accounts of Windrush Ventures Limited that just £12,000 of this was due to Windrush Ventures Limited to April 2008 but in the period from, presumably, December 2007 to April 2008 (when the limited company accounts were made up) some £1,463,000 was paid to Windrush Ventures for management services to Windrush Ventures No. 2 LLP. That’s about £365,000 a month. If that continued to April 2009 another £4.4 million or so of the income of the LLP would have gone to the Limited company in this way. That’s most of its reported expenses. It would be interesting to know why tax relief might be granted on this sum, and what transfer pricing enquiry it might give rise to (and yes, transfer pricing rules do apply internally in the UK) but I leave that aside for now.
Tony Blair is the controlling party of the whole structure. This is despite the fact that the recorded owner of the one share in issue in both Windrush Ventures Limited and Windrush Ventures No. 1 Limited is a nominee company – Bircham and Co. Nominees Limited. We have to assume they act for Tony Blair.
Windrush Ventures No. 1 Limited simply seems to hold a 50% interest in Windrush Ventures No. 2 LLP – from which it received £12,000 profit in the period to 30 April 2008. It seems to have no other activity.
Windrush Ventures Limited does have a trade, and an odd balance sheet which seems inflated by both large long term debts and liabilities for the size of probable activity it is undertaking, but from which no firm conclusions can be drawn as abbreviated accounts have been filed.
Murphy’s conclusion was,
First, there is an obvious desire for secrecy in this structure and a willingness to pay for it. The use of nominees to own the companies at the bottom of the pile is a start. Add to that the fact it is hard to find Blair in the set-up even though he owns it. Is it tax efficient? Not particularly. True, the profits all end up in UK limited companies – and the number of them means that the use of the small companies rate might be restricted – increasing the tax bill in the year to 30 April 2009 in all likelihood.
He also thinks Blair has been able to do this because of a loophole in the regulations for limited partnerships when they were updated – ironically by the then Chancellor Gordon Brown under Labour in 2000. The regulations said: ‘The partnership regulations will apply to most limited partnerships that have limited companies as their general partners and are registered under the Limited Partnerships Act 1907, as these partnerships must have their principal place of business in Great Britain on registration.’
Murphy comments in his blog,
Note the key point in the last paragraph: if the general partner is a limited company then the limited partnership must file accounts. And that is also true if the general partner is an unlimited company or Scottish partnership with members who are limited companies. But someone, somewhere, clearly forgot to update the regulation for the creation of UK limited liability partnerships in 2000. And some lawyer somewhere has noticed this. The result is the whole structure that has been created for Tony Blair.
Blair himself was known by colleagues to be a pretty good employment and tax lawyer, but there is no evidence, and it is extremely unlikely, given Gordon Brown’s reputation for probity, that this loophole was created by Gordon Brown to help Blair in the future. The only official justification came from a written statement by Matthew Doyle, then political director of the Office of Tony Blair, to the Guardian: ‘Why we set it up … was in order to allow Mr Blair’s office sensibly to administer his different projects, in accordance with relevant regulations and company law in the UK. He has an operation that has over 80 people working for it around the world. This was done on the basis of advice.’ It employs considerably more now.
However, a similar conclusion to Richard Murphy’s has come from a tax lawyer who pointed out that this structure is used by private-equity companies. The same structure allows them to manage their investments from overseas in the UK without paying additional tax, and also means they do not have to pay corporation tax on all the companies, as do most UK-based corporations. They benefit from the lowering of capital-gains tax by successive governments. And, if they pay out dividends, they get taxed at a lower rate. This structure has become more common as private-equity and alternative financing structures have been developed in the UK.
Blair’s new secretive companies also follow the rapidly developing offshore world of capitalism, outlined by business journalist Nicholas Shaxson in his book Treasure Islands,11 where secretive firms based in high-tax countries, such as the UK, load huge administrative expenses to avoid tax without proper transparency, while often operating through trusts and tax havens and offshore banks.
Indeed our researches produced a rather interesting offshore riddle. Firerush and Windrush were set up in Gibraltar in 2010 on the same day. They were created by accountants Baker Tilly and run from a nameplate office in Gibraltar with the main shareholders being BT (Baker Tilly) Nominees and BT (Baker Tilly) Corporate Services Ltd.
Tony Blair’s office says this has nothing to do with him. It is a remarkable coincidence that someone has chosen to use the same names Blair has chosen for his companies in an offshore country.
Blair keeps control over the companies he does own in the hands of people he has trusted for years. One is Jonathan Powell, Tony Blair’s chief of staff during the Iraq War, who was appointed senior adviser to TBA and also works for JP Morgan, which, as we have seen, pays Blair. He also, interestingly, took exams so that he has the necessary qualifications from the FCA to look over Blair’s interests in Firerush.
Official accounts show that a company set up by Blair to manage his business affairs paid just £315,000 in tax in 2011 on an income of more than £12 million. In that time, he employed 26 staff and paid them total wages of almost £2.3 million. The documents also reveal that, in the two years to 31 March 2013, Blair’s management company had a total turnover of nearly £15 million and paid tax of about £653,000.12
According to these accounts, in 2013 he was sitting on a cash pile of £13 million after paying out large sums to cover his overseas visits – often in a leased private jet and with very expensive hotel bills.
TBA clients are of course confidential. From public sources, these include:
Louis Vuitton Moet Hennessy, the iconic luxury handbag, luggage manufacturer, and cognac and champagne company, which employed Euan Blair at one stage;
Zurich Insurance, thought to bring in £0.5 million a year;
JP Morgan, thought to bring in £2 million a year – or $4 million according to the FT;
Emir of Kuwait, thought to have paid £27 million for consultancy advice;
Abu Dhabi government, thought to bring in £1 million a year;
Government of Kazakhstan, which, according to the Kazakh press, pays £8 million a year for economic and governance advice;
UI Energy, a Korean oil company, for which Blair admitted he had done some consultancy work but declined to publish the details, despite being pressed by the Advisory Committee on Business Appointments (the watchdog body) to do so;13
International Sanitary Supply Association, for which Blair addressed a conference for a £50,000 fee;14
Wataniya, the Palestinian phone company owned by Qtel, itself a client of JP Morgan.
Blair has also made substantial sums of money from speeches in China and now advises the Mongolian government under a two-year consultancy agreement.15 He also got involved in the row over the Glencore and Xstrata merger. His recent role as peacemaker is said to have won him £620,000.16 At a meeting in Claridge’s in 2012, the Mail reported that he acted ‘as a mediator in negotiations between Glencore mining boss Ivan Glasenberg and Qatari Prime Minister Sheikh Hamad bin Jassim bin Jaber al-Thani.�
� Finally, in 2012 Blair’s Government Advisory Practice (GAP) pulled in a contract with the state government of São Paulo in Brazil, worth almost £4 million a year.17
So how much money does Tony Blair make from all this? Some of the money (we do not know how much) is said to be routed towards his charitable activities. Cherie Blair also makes profit from her own business and law practice. And the charities, in particular the Blair Faith Foundation, also have their own secret donors, as we shall see. He also has to pay some 200 employees now, a figure he’s set his sights on growing to 500 over the coming years.
Depending on whom you believe, he is now worth around £60 million or possibly more.
Sources close to Blair have told us that the model for his growing organisation is the equally secretive US global management consultancy McKinsey. ‘There was a great New Labour love affair with McKinsey when Blair was Prime Minister,’ says one senior banking source close to Blair. ‘There are lot of McKinsey alumni on the government advisory side of Blair’s business, and always have been.’
The vast company, which advises world governments and business leaders, refuses to name the people it does business with, or discuss its multibillion-pound deals.
Staff lists of the ex-PM’s Africa Governance Initiative (AGI) – the charity he set up in 2008 – as well as Tony Blair Associates, the umbrella operation for his GAP, read like a Who’s Who of former McKinsey executives. They include German-born Dr Stephan Kriesel, the GAP head; Joe Capp, who runs Blair’s South American organisation; and Nnaemeka Okafor, who is the AGI’s head in Nigeria. Kriesel appears to enjoy his role. His Facebook page, which is open to public viewing, shows him in various locations, often wearing flamboyant clothing, including a bright white suit and gold turban, or else photographed on a camel wearing Arab dress.
Blair, who has links to McKinsey going back to his time in office, has also copied the US firm’s policy of hiring bright young graduates from Oxbridge, Harvard, Princeton and the Massachusetts Institute of Technology, instead of relying on experienced business managers.
McKinsey had a lot of input into the Blair business model, too, according to TBA insiders. Blair says that when you come to power for the first time, even though you’re called Prime Minister, you don’t have a lot of levers in your office, and you pull them only when things happen. He found this when he first came into office. So he created one in Downing Street, and now exports his model, according to one of the people who have helped him create the TBA business, ‘forming the policy unit, the delivery unit and the way you monitor what each department is doing so that it actually is responsive to the centre – this kind of structured methodology was created, I think there was lots of McKinsey input into that.’
Increasingly, Tony Blair Associates’ UK headquarters – in a Georgian townhouse in London’s Grosvenor Square, for which he pays £550,000 a year in rent – resembles the seat of power of a president or prime minister. The headquarters – the base for his three directors of Windrush Ventures – employs 35 people on an average salary of £86,000 a year, almost £1 million more than in 2012.
The company’s highest-paid director receives £273,000 – up from £200,000 the previous year, according to the accounts submitted to Companies House for 2012–13. This director is thought to be either Catherine Rimmer, Blair’s chief of staff and a former Downing Street aide, or David Lyon, a former Barclays investment banker who was recruited by Blair in 2012 to ‘grow and develop’ his business activities. The other two directors share £307,000 between them – nearly double the £175,000 paid in 2012.
The most accurate assessment of the wealth generation of Blair’s companies’ can be shown in this table.
Payment schedule
Windrush 30 April 2008
£000 30 April 2009
£000 31 March 2010
£000 30 April 2011
£000 31 March 2012
£000
A: Income of No. 2 LLP from No. 3 LP 6,436 5,152 9,837 10,588
B: Profit Share of No. 3 LP to No. 2 LLP 350 437 646 2,954
C: Remuneration from No. 2 LLP to Windrush Ventures Limited 1,463 6,436 5,152 9,837 10,588
Profit Share of No. 2 LLP
D: to Windrush Ventures Limited 12 163 218 426 1,177
E: to No. 1 Ltd 12 163 218 223 1,777
Firerush
A: Income of No. 2 LLP from No. 3 LP 438 802 1,603
B: Profit Share of No. 3 LP to No. 2 LLP – – –
C: Remuneration from No. 2 LLP to Firerush Ventures Limited 438 802 1,603
D: Profit Share of No. 2 LLP – – –
E: to Firerush Limited – – –
F: to No. 1 Ltd – – –
Altogether, this suggests that, up to 2012, Blair’s companies – not the Blairs themselves – generated some £40.7 million. If you add figures up to 2013, the money generated by Blair’s companies increased by another £13 million taking it to nearly £54 million.18 What is clear from these figures is that Blair’s financial empire is growing by the day, and the money he is making – whether for his charities or his family – continues to rise. He may not be in the league of Bill Clinton yet but he certainly aspires to be. Indeed, he is said to have told one of the people guarding him that he would love to be worth as much as the former American President.
His finances in the decade ahead could make him one of the most powerful global figures – advising companies and governments, from China to large swathes of Africa, Eastern and Central Europe and the Middle East. Whether he will be doing any good in the world, given the many brutal dictators whose image he is burnishing, is another matter.
Notes
1 http://www.tonyblairoffice.org
2 The Sunday Times, 22 February 2009: http://www.thesundaytimes.co.uk/
sto/Test/politics/article151975.ece
3 Ken Silverstein, The Secret World of Oil (Verso Books, 2014)
4 The Guardian, 1 December 2009: http://www.guardian.co.uk/politics/2009/
dec/01/mystery-tony-blair-finances
5 New Republic, 4 October 2012: http://www.tnr.com/article/politics/magazine
/107248/buckraking-around-the-world-tony-blair
6 Sunday Telegraph, 13 January 2013: http://www.telegraph.co.uk/news/politics
/tony-blair/9797837/Tony-Blair-widens-
his-web-via-the-stock-markets.html
7 Ibid.
8 Daily Telegraph, 13 January 2013: http://www.telegraph.co.uk/news/politics/
tony-blair/9797837/Tony-Blair-widens-his-
web-via-the-stock-markets.html
9 The Guardian, 24 September 2011: http://www.theguardian.com/politics/2011/
sep/24/tony-blair-mark-labovitch-resignation
10 www.taxresearch.org.uk/Blog/, 1 December 2009: http://www.taxresearch.org.uk/Blog/2009/12/01/
what-has-blair-got-to-hide-because-thats-
the-riddle-at-the-heart-of-the-conundrum/#
sthash.7H6qLB6Y.dpuf
11 Nicholas Shaxson, Treasure Islands: Tax Havens and the Men who Stole the World (Vintage, 2012)
12 Accounts from Windrush Ventures, 2013
13 The Guardian, 17 March 2010: http://www.theguardian.com/politics/2010/
mar/17/tony-blair-cash-south-korea-oil
14 www.oneindia.com, 8 November 2010: http://news.oneindia.in/2010/11/08/
toiletroll-talk-fetches-tony-blair-50kpounds.html
15 Daily Telegraph, 9 June 2013: http://www.telegraph.co.uk/news/politics/
tony-blair/10108005/Tony-Blair-strikes-
gold-in-Mongolia.html
16 Daily Mail, 9 September 2012: http://www.dailymail.co.uk/news/
article-2200655/The-million-dollar-man-How-
Tony-Blair-wafted-Claridges-secure-massive-
pay-day-just-hours-work.html
17 Daily Telegraph, 18 November 2012: http://www.telegraph.co.uk/news/
politics/tony-blair/9685253/Tony-Blair-
strikes-business-deals-in-Brazil-and-Colombia.html
&n
bsp; 18 Daily Telegraph, 4 January 2014: http://www.telegraph.co.uk/news/politics/
tony-blair/10551183/Tony-Blairs-fortune-
boosted-13m-by-bumper-year.html
CHAPTER THREE
EUROPE: BLAIR’S FAILED AMBITIONS
‘The EU might not be able to afford Tony Blair.’
– FORMER FOREIGN SECRETARY DAVID MILIBAND.
Tony Blair hoped to be the first president of the European Council. It would have crowned a luminous political career to have taken a big international job just two years after stepping down as Prime Minister, and it seemed entirely achievable. From 2007, when he ceased to be Prime Minister, almost until the appointment was made in 2009, it looked almost as though the job was his for the asking.
Blair had been British Prime Minister for ten years. He had huge international prestige, despite Iraq. As Prime Minister he had been a dominant force in European politics. He had a prestigious international job as Middle East envoy. He had the enthusiastic support of an admirer in the Élysée Palace, French President Nicolas Sarkozy, who, according to the Brussels correspondent of Liberation, Jean Quatremer, ‘has never hidden his admiration for the Anglo-Saxon model in general and for Tony Blair in particular’.1
And so he should have done. Almost Blair’s last act as Prime Minister was to broadcast in French to the French people, congratulating them and Sarkozy on the latter’s election as President. He admired Sarkozy, ‘que je considére un ami’ (‘whom I consider a friend’). Interestingly, these words were left out of the English version, which he recorded at the same time; considering Sarkozy a friend might not have gone down a storm in the Labour Party. (Blair’s French, incidentally, is quite good, but not as good as it’s cracked up to be. After resigning as PM he risked an interview in French. He’s fairly fluent and understands what’s said to him, but his accent is dreadful, and, when he’s not sure of a word, he has the Englishman’s tendency to use the English word and give it a French intonation. The French for leadership is not ‘lidairsheep’.)
Blair Inc--The Man Behind the Mask Page 8