Sunday, March 11, 2007

Bloomberg looks closer at Bono

Bono's finances - and in particular the gap between "what I say" and "what I do" - come in for some close inspection by Bloomberg. They dig into the tax regime employed by the U2 empire:

Bono's own dealings haven't always followed the altruistic ideals he espouses, says Richard Murphy, a Downham Market, U.K.- based adviser to the Tax Justice Network, an international lobbying group.

Murphy points to the band's decision to move its music publishing company to the Netherlands from Ireland in June 2006 in order to minimize taxes. The move came six months before Ireland ended an exemption on musicians' royalty income, which is generally untaxed in the Netherlands.

"This is somebody who's exceptionally rich taking the opportunity to shift his tax burden to somebody else, but then asking governments around the world to spend that tax take in the way that he would like,'' Murphy says.

U2's move to the Netherlands is wrong, says Dick Molenaar, senior partner at All Arts Tax Advisers, a Rotterdam-based tax consulting firm for artists and musicians. "Everybody needs to pay his fair share of taxation to the government, and therefore we have roads and education and everything," he says.

During the 1990s, U2 used nonexecutive directors who were resident in an offshore tax haven to limit the amount paid by the four band members -- in addition to Bono, they're lead guitarist The Edge, 45, whose real name is David Evans, bass guitarist Adam Clayton, 46, and drummer Larry Mullen, 45.

Bono has three homes - none of which are entirely pokey - and owns great chunks of 15 companies, real estate, and so on. Would it really leave him in danger of starvation if he didn't bend himself into shapes to minimise the tax he pays? Would it really reduce him to wearing generic sunglasses if U2 paid tax in the nation which educated them, nurtured them and, had they fallen onto hard times, helped them out with social security?

Bloomberg also reveals that amount of his own money that Bono has put into the massively loss-making Project Red: Nothing, of course.

There's a hint that some of the other people who work hard on Red might be tiring of their efforts being eclipsed by Bono's showboating:
Bono's involvement in RED is intermittent, says RED CEO Bobby Shriver, who's a nephew of the late U.S. President John F. Kennedy.

"I'm not trying to toot my own horn, but I was responsible really for the creation of it as a business, to get it to go and make all these things actually happen in the real world," says Shriver, 52, who's based in Santa Monica, California.

The idealist's investment in video games also runs against his public personna - Elevation, his venture capitlaism group, is currently pushing a game Mercenaries 2, which depicts paid-for fighters involved in gun battles in Venezuela:
"We don't think this fits with Bono's image, and we're trying to get him to recognize this fact," says Chuck Kaufman, a Washington-based spokesman for the international Venezuela Solidarity Network, which supports the government of Venezuelan President Hugo Chavez.

Elevation's official response is a textbook example of the moral vacuum you find in modern business:
"It's hard to understand why anybody was upset about this game, because keep in mind the Venezuelans in this game are actually the good guys,'' says Roger McNamee, a managing director and co-founder at Elevation.

Why would anyone be upset at a game which encourages you to kill their fellow nationals, and which plays conveniently to the US right's depiction of Chavez's Venezula as some kind of non-State where anything goes, eh? Can't begin to imagine, Roger.

There's also a surprising little nugget of detail about the U2 Tower, currently rising against the Dublin skyline and many Dubliner's wishes:
In 2002, the Dublin Docklands Development Authority forced U2 to sell the building, located near a concrete factory, for an undisclosed price as part of a city program to bring businesses and new housing into the area, which had declined economically since World War II.

In return to U2 for moving out, the authority promised the band it would provide space for a new recording studio on the top two floors of a 32-story tower it plans to build on the adjacent Britain Quay.

The authority also gave U2 bass guitarist Clayton a seat on the jury that would decide the winner of an international design competition to build the tower.

In 2003, the jury chose joint winners: Dublin-based architectural firms Burdon Dunne and Craig Henry. Felim Dunne, [U2 manager Paul] McGuinness's brother-in-law, is a senior partner at Burdon Dunne.

There's no suggestion that anything untoward happened - Burdon Dunne submitted their design according to the rules, which meant that their application had to be annonymous, so it's impossible that Clayton could have known which was theirs, much less have given it any unfair support. Still, nice that it ended up being kept in the family anyway, isn't it?

[Thanks to Michael Moran for the link]