Blair Inc--The Man Behind the Mask

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Blair Inc--The Man Behind the Mask Page 10

by Francis Beckett


  No prizes at all for guessing who the former Prime Minister thinks might do the job.

  The second, delivered on 28 November 2012, is a call for Britain to stay in Europe, play her full part in the Union and help to overcome the euro crisis, ending with this:

  Europe is a destiny we will never embrace easily. But it is an absolutely essential part of our nation remaining a world power, politically and economically. It would be a monumental error of statesmanship to turn our back on it and fall away from a crucial position of power and influence in the 21st Century.

  Almost unnoticed in Britain, he criticised David Cameron’s threat to leave the EU if his old enemy Jean-Claude Juncker was appointed President of the Commission, and he did so in terms that sound as though they were carefully calculated to appeal to Angela Merkel: ‘It would be more convincing if he spoke of what is good for Europe, and not only of what is good for Great Britain.’

  But it did no good. No one suggested Blair’s name for the job, and eventually he told Le Monde, ‘I am not a candidate for any post, formal or informal, in the EU. It is just a subject about which I care passionately.’6

  Blair is a hero to many Americans and Kuwaitis, but this does not help him to gain trust in EU countries. That is why so much of Tony Blair Associates’ business is among Middle Eastern sheikhs. But he does do some business in the EU, though its governments have not employed him. On 28 January 2008, while still pressing for the EU presidency, he signed a six-figure contract with Swiss insurer Zurich to help with its climate initiative and advise chief executive officer James Schiro on general political trends and developments.

  The company said at the time that Blair was to advise on the best way to adapt its policies for businesses to take account of climate change, as well as providing Schiro with ‘general guidance on developments and trends in the international political environment.’7 No one was willing to say how much Blair was getting, but the company did not deny that it was in six figures. Schiro left the company the following year to go to Goldman Sachs.8

  Then, after the EU presidency campaign had failed, a six-figure contract for the luxury-goods firm Louis Vuitton Moët Hennessey (LVMH) came along. Blair owed this to a contact he made during his premiership, when he became close friends with France’s richest man and LVMH’s head, Bernard Arnault, the richest person in France and one of the richest twenty people in the world. The two became such good friends that Blair’s children were invited to do work experience with Arnault while their father was still in office, and stayed at Arnault’s Paris residence.

  It started with an invitation for Arnault to Chequers, the Prime Minister’s official country house in Buckinghamshire. Soon afterwards, in the summer of 2004, Blair’s son Nicky did work experience at LVMH’s Krug vineyard in the Champagne region of France, and a year later Blair’s other son Euan did work experience at a French radio station owned by Arnault, and lived in a luxury apartment paid for by him.

  In February 2007, when Blair was still PM, his daughter Kathryn stayed in Arnault’s Parisian mansion while undertaking a three-month language course at the Sorbonne. In September 2007, soon after Blair had left Downing Street, the Blairs stayed aboard Arnault’s yacht, Amadeus, in the Mediterranean. Arnault accompanied the Blairs when they had an audience with the Pope at the Vatican. So did Blair’s former chief of staff Jonathan Powell, his closest aide during the Downing Street years. Powell’s brother Lord Powell is chairman of the LVMH offshoot LVMH Services Ltd.9

  As we’ve seen, Powell followed Blair out of office to become a senior adviser in Tony Blair Associates. He was the only person with Blair when he visited the Emir of Kuwait on behalf of the Quartet, and picked up his most lucrative contract.

  Bernard Jean Étienne Arnault, according to the Forbes World Billionaires List in 2012, was the fourth richest person in the world, with a net worth variously estimated at between $24.1 billion and $41 billion.

  He is known for his collection of contemporary art and privately owns a $35 million oasis in the Bahamas. The 133-acre estate features several hilltop villas, pristine beaches, tennis courts and a marina. He owns a villa in the island of St Tropez, and jointly owns a 150-year-old castle surrounded by a 41-hectare vineyard, Chateau Cheval Blanc, in the furthest corner of northwest Saint-Emilion in Bordeaux.

  Arnault supported Sarkozy in his successful presidential election bid in 2007, but one year later the new president attacked tax havens, earning Arnault’s severe displeasure. He is criticised in France for parking money in Belgium, away from the French tax man.10

  He sparked an uproar by seeking Belgian citizenship, just as President François Hollande planned to impose a 75 per cent tax on incomes of more than 1 million euros. Belgian income and inheritance taxes are significantly lower than in France, and unlike France, Belgium does not impose a tax on personal wealth.

  On 10 April 2013, Arnault announced he had decided to abandon his application for Belgian citizenship, saying he did not want the move to be misinterpreted as a measure of tax evasion at a time when France faced economic and social challenges.

  Notes

  1 www.bruxelles.blogs.liberation.fr, 22 October 2009: http://bruxelles.blogs.liberation.fr/

  coulisses/2009/10/conseil-europ%C3%A9en-

  comment-blair-a-fait-pschiiiiiiiiit.html

  2 The Times, 10 July 2014.

  3 The Economist, 22 October 2009: http://www.economist.com/blogs/charlemagne

  /2009/10/tony_blair_s_eu_hopes_go_pschi

  4 Süddeutsche Zeitung, 17 May 2010: http://www.sueddeutsche.de/politik/

  einigung-auf-neues-spitzenduo-

  europas-kleiner-nenner-1.133484

  5 www.bruxelles.blogs.liberation.fr, 22 October 2009: http://bruxelles.blogs.liberation.fr/coulisses

  /2009/10/conseil-europ%C3%A9en-comment-

  blair-a-fait-pschiiiiiiiiit.html

  6 Le Monde, 3 June 2014

  7 Financial Times, 29 January 2008: http://www.ft.com/cms/s/0/9ccda392-

  cdea-11dc-9e4e-000077b07658.html#axzz3PdeFazIc

  8 www.bloomberg.com, 28 January 2008: http://www.bloomberg.com/apps/news?pid=

  newsarchive&sid=atrJFZT2p9Kc&refer=uk

  9 Daily Telegraph, 9 January 2010: http://www.telegraph.co.uk/

  news/politics/6950815/Tony-Blairs-new-

  job-with-luxury-goods-firm.html

  10 http://www.bornrich.com/bernard-arnault.html

  CHAPTER FOUR

  ADVISER TO OIL-RICH SHEIKHS

  ‘Part of the discussion might be about the Quartet; part of it might be about making a relationship with the Faith Foundation; part of it might be about business, something for JP Morgan. I think Tony himself probably thinks, “Do you remember the very early quote, that everyone knows I’m a straight kind of guy?”’

  – FORMER FINANCIAL ADVISER TO TONY BLAIR, SPEAKING TO AUTHORS.

  When Tony Blair led a government, he had an army of diplomats, known as the Foreign Office, to keep him posted about the state of world events, about politicians who carried clout, about future trends and risks. Her Majesty’s diplomats are famous for their contacts and their analyses.

  When Blair left government, he sought to build a global consultancy not unlike the government he had left. He turned himself into an international outsourcing company, doing at an international level something very similar to what companies such as Capita and Serco do at the domestic level. He looked to persuade governments that functions traditionally carried out by civil servants could with advantage be outsourced to him.

  To do this, he sought the assistance of those in the private sector who could give him insight into the world. Just as Capita recruits former local-authority education administrators, many of these Blair thought he could use were former diplomats; and a surprising number worked, and indeed work, for one of two secretive consultancies. One is the private-investigative and due-diligence consultancy bearing the name Hakluyt. The second is the now defunct American agency called Monitor, a US financia
l consultancy founded by the management guru Michael Porter; its name crops up frequently in the Blair story. Those connected to these outfits are familiar with the murkier parts of Whitehall, the Pentagon or the State Department.

  Former Blair employees now working for Hakluyt include Nick Banner, a former diplomat who worked for Tony Blair Associates; Varun Chandra, a financial expert who assisted Blair to set up his asset-management business, which was stillborn; and Jonathan Powell, Blair’s former chief of staff who is also described as a senior adviser to the spooks.

  Cherie Blair and her law firm Omnia Strategy are also wedded to the private due-diligence sector for their international knowledge-gathering operations, and Tony Blair Associates has made much use of the US consultancy McKinsey.

  Many international advisers to Blair have been sourced from Monitor, which collapsed amid financial mismanagement in 2012. These include Abdullah Al Asousi, a former TBA adviser in Kuwait; Naser Almutairi, who acts as Blair’s government consultant in Kuwait; and Khaled Jafar. The Monitor Group employed the retired British spy Sir Mark Allen, who had advised Blair on his dealings with Libya’s Muammar Gaddafi.

  The reasons for Monitor’s failure are interesting to us, because they are an indication of the sort of business strategy the former Prime Minister admires. Forbes magazine explained its philosophy and why it fell:

  In the theoretical landscape that Porter invented, all strategy worthy of the name involves avoiding competition and seeking out above-average profits protected by structural barriers. Strategy is all about figuring out how to secure excess profits without having to make a better product or deliver a better service.

  It is a way of making more money than the merits of the product or service would suggest, or what those plain folks uncharitable to the ways of 20th Century business might see as something akin to cheating. However for several decades, many companies were ready to set aside ethical or social concerns and pay large consulting fees trying to find the safe and highly profitable havens that Porter’s theory promised …

  [Porter’s] framework for the discipline of strategy isn’t just an epistemological black hole: in its essence, it’s antisocial, because it preserves excess profits, and it’s bad for business, because it doesn’t work. It accomplishes the unlikely feat of goading business leaders to do wrong both to their shareholders and to their fellow human beings …1

  The importance to Blair of having his alumni in these agencies is that they serve as extensions of his network. Having worked for him, either in government or for TBA, they can be called on by him. They in turn will open to him a network of influential people.

  When governments call on Blair, they want not only the man but his contacts. It works both ways, of course, so, when Hakluyt or any other consultancy needs a political door opened, it can call on Blair.

  This partly explains the eye-watering amounts corporates and wealthy individuals will pay for Blair’s mystique, wrapped round, as it is, his promise of power and access. The fact that Blair does little more than pick up a phone to a contact he has acquired through a consultancy composed of warmed-up executives never reaches the ears of the deep-pocket who wants a call made or a back scratched.

  Here’s how it could work. A government wants to sell a product to a NATO power, is looking for contacts in that country’s government and calls Blair. Blair in turn contacts Nick Banner at Hakluyt. Banner (an old Foreign Office hand who has advised Blair on foreign affairs) in turn picks up the phone to Javier Solana, a former secretary general at NATO. Solana happens to sit on the advisory board of Pelorus Research, part of Hakluyt. Solana knows someone in the relevant country’s defence ministry and advises the minister that the CEO of the company with the product will give him or her a call.

  The Pelorus board is stuffed with former executives from India, Turkey, Japan, the US and the UK, each with their wealth of connections. If the deal goes through, each party in the chain receives a fee, depending on the time it puts in and the level of authority it holds. If it does not go through, parties remember who helped and how, for the next time they are needed.

  Hakluyt makes secrecy its virtue. Its website contains no more than the four addresses of its offices in London, Singapore, New York and Tokyo. The London office is predictably in the West End, at 34 Upper Brook Street, W1K 7QS. The respectability of Hakluyt is little more than paper-thin. Details of its activities that leak out give the lie to the blue-chip consultancy, for the firm has been found spying on Greenpeace (Shell and BP have both admitted they hired the firm) and they worked for Enron, the fraudulent energy company.

  KINSHIP WITH KUWAIT

  These connections make Tony Blair more valuable than just any old run-of-the-mill former prime minister. The government of Kuwait values him highly. In January 2009, when Blair was in Kuwait as Middle East envoy for the Quartet, he met with the Emir and his advisers. But the former PM did not have anyone with him from the Quartet secretariat. Instead, he was accompanied by the new senior adviser at Tony Blair Associates, Jonathan Powell, although Blair was there on behalf of the Quartet and Powell, as we saw in Chapter 1, does not work for the Quartet but for Blair’s consultancy.

  Shortly afterwards, TBA won a contract with the Kuwaiti regime to undertake an analysis of the Kuwaiti economy. It helped, certainly, that in Kuwait he was dealing with an old friend. Blair has enjoyed a longstanding relationship with the Emir of Kuwait. As Prime Minister, he held talks with Sheikh al-Sabah in May 2003, just weeks after Saddam Hussein was deposed in Iraq. Sheikh al-Sabah is eternally grateful for Blair’s role in bringing about the Iraq War and Saddam’s downfall.

  Political analyst and economist Nasser Al Abolly, a leading Kuwaiti campaigner for democratic reform, spoke to Peter Oborne for a Channel 4 documentary – a risky thing to do in a country like Kuwait, where criticising the autocratic Emir is illegal. Al Abolly said he had heard from good sources that Blair had been paid 12 million dinars – about £27 million. Oborne asked, ‘How do you know he got paid that money?’ Al Abolly replied, ‘There is always talk about any money spent through the secret funds, circulating in Kuwait through people who are close to the Emir or through those who are involved in confidential transactions.’

  Blair’s office said that the figure agreed ‘at that time’ was very significantly less than £27 million, but declined to disclose the lifetime value of the contract. That lifetime value may, of course, be significantly more than was paid for the report itself – as we will see, Blair has staff embedded in the Kuwaiti government.

  Oborne asked, ‘Would £27 million have been good value for TBA’s report?’ Al Abolly replied, ‘Of course not.’

  Whether the report really was worth £27 million or not is hard to judge, because nobody’s allowed to see it. But Al Abolly not only considers it exorbitant: he also told Oborne that much of Blair’s eventual report was not original and it had come up with many of the same recommendations as earlier reports on the future of Kuwait – an observation echoed by other Kuwaiti politicians.

  Kuwait is thought to have commissioned an earlier report on much the same subject from the consultants McKinsey. It is not known whether Blair’s team had access to that report.

  According to Peter Oborne, writing in the Daily Telegraph on 23 September 2011,

  Mr Blair’s visit to the Emir of Kuwait, part of a wider Middle Eastern tour, was made on January 26, 2009. He was introduced to the Emir – who is said to feel a profound sense of gratitude to the former British Prime Minister because of his role in deposing Kuwait’s greatest enemy, Saddam Hussein.

  Shortly afterwards, the Emir handed Tony Blair Associates a lucrative consultancy deal to provide advice on the future of the Kuwaiti economy. Nobody knows how much this deal – which was kept secret for two years – is worth. Because the TBA contract was handled by the Emir’s personal office, it is exempt from scrutiny by Kuwait’s normally rigorous financial regulatory body.2

  The five-year plan is part of the government’s ‘Vision Ku
wait 2035’. The report proposes reforms to the oil, trade and finance sectors, business environment, and health and education systems. Sheikh Nasser Sabah Al-Ahmad has said the report prepared by Blair’s team ‘analyses the major issues facing the country and presents detailed proposals’ for addressing them.

  What came out of the Blair report? We don’t, of course, know, because we don’t know what was in the Blair report. But 798 construction projects worth 4.8 billion dinars were subsequently planned. The five-year plan was based on 330 policies that would be supported by 45 new laws. Five public sectors – housing, electricity, ports, warehouses and health insurance – would be privatised. The new plan will pump billions into prestige megaprojects such as the $77 billion City of Silk Bridge.

  The City of Silk is a proposed urban area on the other side of Kuwait Bay from Kuwait City, designed to include a duty-free area beside a new airport, a large business centre, conference areas, environmental areas, athletic areas and areas that concentrate on media, health, education and industry, as well as tourist attractions, hotels, spas and public gardens.

  The oil sector will also benefit from projects such as a new $14.5 billion oil refinery that was previously held up in parliament. There will also be a massive skyscraper, planned to top out at 1,001 metres in order to reflect the Arabian folk tale collection One Thousand and One Nights. The complex will be linked to Kuwait City by a 23.5-kilometre bridge across Kuwait Bay.

  As a result of the contract, TBA has staff permanently based inside the office of the Kuwaiti Prime Minister. One of these has been Haneen Al-Ghabra, a Kuwaiti woman who was the Prime Minister’s communications manager. She was recruited by TBA in 2010. ‘I am responsible for ensuring message consistency at both a governmental level and for the Prime Minister himself,’ Al-Ghabra said. ‘Our department is responsible for branding, media relations, public perception and strategic communications.’3

 

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