Patent Hypocrisy

Patent Hypocrisy

ONE way to deflect scorn from a favoured European tax scam is to point the finger elsewhere. Sunnier stops on the hot money merry-go-round, for example.

And so it is with the ONE Campaign, who last month launched a tongue-in-cheek attack on offshore tropical tax havens. Timed to coincide with the Open Government Partnership Summit held in London, the campaign singled out “phantom firms” on sandy shores and the damage they wreak upon developing economies.

The campaign website ‘Stash The Cash’1 carries a mock video sales pitch which explains how dealers in “drugs, women or guns” can launder their ill-gotten gains with the help of anonymous shell companies. “And here’s the best news,” enthuses a geezer in a Hawaiian shirt, “It’s 100% legal!”

The ONE Campaign is the brain-child of Paul Hewson – otherwise known as Bono. His band U2 have famously exploited the differences in tax and intellectual property law across a number of EU member-states to ensure they pay only the bare minimum tax on global profits. Song rights are owned by a Dutch-registered letterbox company, to which U2 group companies must pay hefty royalty fees for their use.2 This allows artificial losses to be booked in high tax jurisdictions, and profits shifted into low- to no-tax Holland.

The omission of distinctly European accounting abuse of this sort from Bono’s campaigning may or may not have something to do with the infamous “Double Irish Dutch Sandwich” – a tax avoidance rouse used by companies such as Facebook, whose COO serves on the board of, er, the ONE Campaign.3

Bono is also the co-founder of the for-profit HIV/AIDS “charity” Product Red, which is described as a ‘division’ of the ONE Campaign.4 RED is a “private sector initiative” which works in partnership with “the world’s most iconic brands”. These include Starbucks and Apple, both of whom are users of the Double Irish Dutch Sandwich. Indeed, Apple are reported to have “pioneered” its use.

Although “100% legal”, cross-border “tax planning” deprives developed nations of the very funds Bono has campaigned for governments to send over as aid to their developing counterparts. Pharmaceuticals giant Pfizer are another firm that are reported to use the Double Irish Dutch Sandwich. Indeed, these are the sorts of corporate structures which underpin Big Pharma’s stranglehold over medicine patents, undermining international efforts to get affordable medication to the citizens of developing nations. A recent documentary, Fire in the Blood,  tells the harrowing story of the HIV/AIDS epidemic in 1990s South Africa. It is dedicated to the 10 million or more people who died preventable deaths in Africa and developing nations because low-cost, life-saving medication was denied to them. Special scorn is reserved for Pfizer, whose patented antiviral treatment sold for $15,000 a year in South Africa, beyond the means of millions of HIV/AIDS suffers.5

But then such trifles leave the modern big-ticket tax dodger unfazed: “U2 is in total harmony with our government’s philosophy,” Bono told The Observer this September. “Tax competitiveness has taken our country out of poverty.”6 Well that’s alright then!