Thursday, May 12, 2016

He who pays the piper calls the tune

 North West Norfolk MP Sir Henry Bellingham, who was once a Foreign Office minister and was knighted by Cameron in 2016, announced a new £30,000 per year job as a senior adviser to J. Stern & Co. in the parliamentary Register of Members' Financial Interests earlier this year.

J. Stern was set up to look after the riches of one family – the Sterns, a European banking dynasty – before branching out and offering its services to other super rich folk. According to its website, "J. Stern & Co. was established to meet all investment and estate management needs of the Stern family", and now helps other rich people "manage their wealth as we manage our own".

The former minister's new employer mostly promotes its services as "a private investment firm", helping the rich buy shares and make other investments. But like most other private offices, J. Stern also offers services that suggest keeping cash out of the hands of the tax man – particularly in relation to inheritance. Bellingham's new company offers to "understand and plan wealth", offering staff with experience in "tax products", "private client, family office and trust-related expertise", and knowledge of "trust and estate" issues – all of which suggests ways to minimise tax, perfectly legally of course. Bellingham says he will be "providing legal advice, and advice on corporate governance and strategic direction" for the firm, which is run by Swiss national Jérôme Stern.

In recent years, former Tory MPs Esther McVey and Tony Baldry, and Labour's David Blunkett, all joined similar firms.

McVey was MP for the Wirral until May of 2015, and had also been an employment minister who increased the government's powers to "sanction" unemployed people's benefits – a technique to get people back into work that has been criticised for leaving sometimes already vulnerable people in the lurch. Last November, the Advisory Committee for Business Appointments, which polices the "revolving door" between government and business, announced that McVey had a new job. She would be starting as a "Special Advisor" to the "Floreat Group", a London-based "multi-family private office" – that is, a company that acts as a financial advisor, bank and general helper to a number of super-rich families. Floreat is mostly owned by Hussam and Mutaz Otaibi, two men with a Bahraini background. The firm originally had a strong base in Switzerland, where its purpose was to "manage discreetly all financial and personal matters" of a group of rich families, and pursue investments for them. Floreat was reportedly targeting families from the Middle East and Europe, and hired McVey to work one week per month for "information gathering, performing due diligence and research".

In 2014, Tony Baldry, the veteran MP for Banbury and a former minister under Thatcher, became a director of Werner Capital, a multi-family office that offers financial advice to ultra high-net-worth individuals. As well as "real estate advisory services" on how to buy expensive property in London, Baldry's firm says it specialises in "establishing robust, complex, cross-border corporate governance structures for business and personal assets", which "protect assets from political upheaval, changes in legislation or unwarranted claims". Essentially, Baldry's firm claims it can protect international oligarchs and other magnates from unstable countries from losing their cash.

Labour's David Blunkett showed that serving the super rich isn't a purely Conservative sport. In 2013, Blunkett took a job on the advisory board of Oracle Capital, an "independent multi-family office dedicated to providing personalised services to high-net-worth individuals and their families". Oracle puts particular emphasis on offering advice to Russian and Chinese multimillionaires about how to come to the UK while minimising tax. As a former Home Secretary, Blunkett has particular expertise in the super rich emigrating to the UK. The former Labour minister took the job while he was a serving MP, and according to parliamentary records made £19,000 a year, at a rate of about £500 per hour. Blunkett stood down in the 2015 election, but still sits on Oracle's board.

Members of Parliament are supposed to be public servants, but many endeavor to be the servant of two masters.

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