Not long ago, Bono’s trendy anti-poverty lobby group, One, launched a blistering public attack on secretive foreign tax havens that allow very rich people to squirrel away their wealth.
At a press conference in Brussels, where MEPs were debating new anti money-laundering laws, it sternly declared that tax havens were preventing ‘massive sums’ from being spent on the all-important ‘fight against extreme poverty, disease, and hunger’.
‘Anonymous shell companies and trusts [are] often being used to siphon much-needed funds out of developed and developing countries alike,’ added a spokesman for Bono’s organisation, claiming that they’re costing the Third World the staggering sum of ‘a trillion dollars each year’.
Calling for anonymous trusts and companies to be abolished, the spokesman said: ‘Knowing who really owns and controls these entities would go a long way to follow the money and root out corruption.’
Wise words, one might think. And ones that will certainly have struck a chord with the multi-millionaire Irish pop star who founded One in 2004, with support from friends such as Bill Gates and Bob Geldof, to campaign on behalf of the dispossessed.
For yesterday, it emerged that 57-year-old Bono is actually something of an expert on strangely named shell companies which are secretly set up in tax havens in order to help very rich people avoid tax.
Indeed, this globe-trotting voice of conscience happens to have been a director and major shareholder in one — which was yesterday revealed to be the subject of a formal investigation by tax authorities.
The organisation goes by the name of Nude Estates and, according to the so-called ‘Paradise Papers’, it was incorporated in Malta roughly ten years ago in order to help him invest in the Lithuanian property market.
The 3,600 square metre facility, which contains a pizza restaurant, a tanning studio and a variety of budget clothes stores, calls itself ‘a modern, cosy shopping centre that shapes the taste of visitors and satisfies their needs’.
It was owned by Nude Estates until 2012, whereupon ownership was transferred from the company registered in Malta (where corporation tax is just five per cent) to another secretive firm, Nude Estates 1.
This organisation, which also counted Bono as a director and shareholder, was based in Guernsey, where tax on company profits is a handy zero per cent.
According to the leaked papers, the Ausra shopping mall’s various holding companies were reportedly able to avoid paying tax from 2010 until 2016, despite declaring profits in five of those six years, apparently by stating they had incurred a large loss at the start of the six-year period, which could then be offset against future earnings.
What the tax authorities will make of this remains to be seen. After the arrangement was reported yesterday, a spokesman for the Lithuanian finance ministry announced that its tax inspectorate was now ‘performing control procedures’ on the shopping centre’s affairs.
At this stage, it should be stressed Bono has not been accused of breaking any laws.
The size of his stake in the offshore firm remains unknown and a spokesman described him as ‘a passive, minority investor’ in Nude Estates, adding: ‘Malta is a well-established holding-company jurisdiction within the EU.’
That, however, is in many ways beside the point. For while they may be perfectly legal, Bono’s offshore tax gymnastics nonetheless represent the very epitome of celebrity hypocrisy. Here, after all, is a hugely famous pop star who has repeatedly used his public profile to campaign for secretive offshore tax havens to be abolished, on the grounds that they are supposedly preventing ‘massive sums’ from being spent on good causes in the Third World.
Yet now, it emerges that the sanctimonious singer — who owns vast homes in Dublin and Manhattan, along with a villa on the French Riviera — is, in private, a very enthusiastic client of at least two such tax havens, which he uses to make potentially lucrative personal investments.
Nor is this the first time that the organisation of Bono’s private finances have been found to be surprisingly at odds with his public pronouncements.
In 2006, after the Irish government decided to cap the tax breaks that U2 had benefited from for years, the band, who met as schoolboys at a Dublin comprehensive in the Seventies, famously decided to move one of the most lucrative portions of their business empire offshore.
The company U2 Ltd, which handles their publishing royalties, was duly transferred to the Netherlands. According to The Sunday Times Rich List, which puts the band’s joint net worth at the staggering sum of more than half a billion pounds, their royalty income ‘has been largely tax free’ ever since.
All of which seems more than a little rum: Bono has, after all, devoted the past 20 years to an earnest campaign to ‘make poverty history’ by lobbying Western governments to spend an ever increasing portion of taxpayers’ money on overseas aid.
Yet here he was taking elaborate steps to reduce the amount those same governments could raise from him.
During the campaign, he has criticised big companies in Africa which ‘aren’t returning the wealth to the people in any kind of fair measure’ and which are failing to be transparent about their tax affairs.
But he does not appear to believe that such standards ought to apply to him.
‘Bono’s attitude is particularly hypocritical in light of his anti-poverty posturing,’ is how the campaign group Fair Tax Mark has put it. ‘Poor countries lose far more money from tax avoidance than they get in aid every year.’
With a degree of arrogance, Bono has described such critics as members of the ‘cranky Left’, arguing that being ‘good at philanthropy’ doesn’t mean you should also be ‘stupid in business’ by paying more tax than is strictly necessary.
Those unable to afford a small army of lawyers and accountants, or to maintain a multi-national property empire, might see things differently, however.
‘There’s an obvious credibility issue here,’ is how Alex Cobham at the Tax Justice Network lobby group puts it.
‘It would be very straightforward for him to say: “I have principles about this kind of thing, so in future will only do business in a certain way.” But for whatever reason, he has resisted that.’
Perhaps Bono’s elastic attitude to his tax affairs is a product of the rarefied circles in which he these days moves, jetting around the planet, usually via climate- destroying private jet, to lobby starstruck politicians and business leaders to cancel Third World debt.
It’s a personal crusade that brought him close friendships with a virtual Who’s Who of world leaders, from Tony Blair and George W. Bush, who he cosied up to in the aftermath of the Gulf War, to Hillary Clinton, Nelson Mandela, and former UN Secretary General Ban Ki-moon, whose organisation Bono has addressed on several occasions.
He ONCE gave a stern lecture at Davos with David Cameron on the evils of tax avoidance.
Meanwhile, the industrious Bono has also developed lucrative contacts among Silicon Valley’s billionaire entrepreneurs.
He is a partner in a venture capital firm called Elevation, which is said to have made more than a billion dollars from an early investment in Facebook, a company which last year paid just £5 million in UK corporation tax on revenues of almost £850 million, and which was in 2016 revealed to be paying taxes on its global profits at a rate of just 3.6 per cent.
Elevation has also received substantial backing from tax-avoiding new-media firms such as Dropbox and Yelp.
During the same period, Bono has built a close business relationship with Apple Inc, which itself was shown in the Paradise Papers to use tax havens to minimise its liabilities, and which released one of U2’s albums free to customers.
To the occasional annoyance of fans, Bono’s endless political hectoring has become a central pillar of U2’s public performances. According to a well-worn (if unconfirmed) anecdote, he once even chose to begin a gig in Glasgow by standing silently on stage, clapping his hands every few seconds, and eventually announcing: ‘Every time I clap my hands, a little child dies.’
After a brief pause, a voice in the crowd responded: ‘Then stop f**king clapping!’
This weary riposte lays bare a simple fact: that even Bono’s most ardent fans are tired of being lectured to by this most shameless of celebrity hypocrites.