The Guardian reports this morning:
The founder of a large hedge fund, who was once criticised as a "hard and calculating man" by a judge, was one of the Tories' biggest donors in the general election.
Jon Wood, who established the SRM Global hedge fund after a successful career as an investment banker at UBS, gave £500,000 to the Tories on 4 May – two days before the election. This made him the second most generous Tory donor during the election – JCB Research gave £803,000 – according to figures released today by the Electoral Commission.
The Conservatives, who faced embarrassment last week when the former tax exile David Rowland resigned as the party's next treasurer, were bracing themselves for a fresh round of damaging headlines when Wood was named today for the first time as a donor.
Wood's hedge fund was initially established in the tax haven of Monaco, but Wood's spokesman said last night the fund was registered to the FSA a year ago, and given formal approval in the UK earlier this year. The spokesman said Wood has been personally domiciled in the UK for tax purposes for well over a year, allowing Wood to be registered a voter in Britain and free to make political donations.
He was criticised by a judge when he launched an unsuccessful £100m lawsuit, known as the Gadget Shop case, against the entrepreneurs Sir Tom Hunter and Chris Gorman. Ruling against Wood, the judge described him as "unreliable" and "evasive" as a witness, and a "very hard and calculating man".
The last one is hardly surprising: I’d have associated that characteristic with most hedge fund managers.
And before anyone gets too excited I will add that the Guardian also reports:
Labour secured seven of the top 10 donations, four of which were from the unions. Unite, Unison and the GMB and Usdaw provided £4.7m between them. Lakshmi Mittal, the steel magnate, and Nigel Doughty, the founder of the private equity firm Doughty Hanson, each donated £1m to Labour.
Now I happen to think that unions act as agents for their members in this so that their donations are non-issues. But I do have problems with Mittal, and have publicly recorded it. Bias is not an issue here.
The use of secrecy jurisdictions is an issue and the Tories seem dedicated to falling over this banana skin. It is not by chance, and it not the sole consequence of hard work by the Tax Justice Network, myself, Christian Aid and others that secrecy jurisdictions have a poor reputation in the public eye. The reality is that secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
People may not put it that way themselves – it took me some time to come up with that definition. But they do know that secrecy jurisdictions – or tax havens as they might call them – facilitate what they think to be cheating. Some of that cheating is legal. No doubt all the Tory donors undertook entirely legal activity. I am not suggesting anything otherwise. But it is, in popular perception, cheating nonetheless even if entirely legal. Artifice may be legal, but artifice it still is. Artifice is what secrecy jurisdictions sell – because by definition offshore does not take place where it is recorded.
People don’t like offshore.
People don’t want offshore associated with public office.
People think trust is undermined when offshore is associated with public office.
People think this for good reason. Trust is undermined by the opacity of offshore. Democracy is undermined as a result. And democracy is also undermined by tax not being paid in the right place at the right time, even if it’s legal not to do so.
So the dependence of the Tories on funding associated with offshore – and Labour’s too come to that – is harmful.
Which is why the existing rules on funding are not good enough, the amount of money parties can spend must be restricted and state funding of parties must be allowed – with small top up donations on top being encouraged – which would include union payments if made as agent for their members.