Blair’s undisclosed business dealings conflict with Quartet role

Adri Nieuwhof, The Electronic Intifada, 29 July 2010

Tony Blair’s term as envoy of the Quartet (US, UK, Russia, UN) has been marked by many photo opportunities but few, if any, accomplishments. Indeed, research shows that Blair’s relationship with one of the world’s richest men poses a clear and significant conflict of interest with his duties as Quartet envoy.

Blair is close friends with Bernard Arnault, the chairman of the luxury goods conglomerate Louis Vuitton Moet Hennessy Group (LVMH), and has refused to publicly disclose whether or not he accepted a paid post as adviser to Arnault, as reported in the media. LVMH has been implicated in benefiting from Israel’s occupation through its subsidiary, the cosmetics retail chain Sephora.

At the end of May, the French-based Coordination des Appels pour une Paix Juste au Proche Orient (CAPJPO) (Coordinated Appeals for a Just Peace in the Middle East) launched legal action against Sephora because of its retailing of products made with stolen Palestinian natural resources in illegal Israeli settlements.

CAPJPO claims that Sephora has maintained an illegal contract with the Israeli cosmetics company Ahava whose products are made in illegal Israeli settlements in the occupied West Bank. The Israeli settlements Mitzpe Shalem and Kaliya co-founded Ahava Dead Sea Laboratories and own 44 percent of the company. In addition, Ahava manufactures its cosmetics in a factory in the Mitzpe Shalem settlement and operates an information center for tourists there.

The mud used in Ahava products is expropriated without Palestinian permission from a site near Kaliya, along the shores of the Dead Sea within the occupied West Bank. However, Ahava labels its skin care products as originating from “The Dead Sea, Israel.”

In July 2004, the International Court of Justice (ICJ) reaffirmed the illegality of Israeli settlement construction in the occupied West Bank. Relying on the ICJ ruling, CAPJPO argues in its complaint that Sephora is supporting Israel’s violations of international law by retailing Ahava products.

Blair’s friendship with Arnault, LVMH’s chairman, dates to his time as UK Prime Minister. Arnault is one of the richest men in France, with an estimated net worth of more than $27.5 billion. Blair’s three eldest children studied in France while he was prime minister, and often stayed at Arnault’s mansion in Paris. Indeed, the Daily Mail reported in February 2007 that Liberal Democrat Member of Parliament Norman Lamb warned Blair “It is very dangerous to take hospitality from very wealthy individuals who may be seeking to wield influence” (“Cheri’s pride graduate girl”). Blair’s friendship with Arnault continued after he stepped down as premier and accepted the position as Quartet envoy.

In January, the Daily Telegraph revealed that Blair was to be appointed as Arnault’s personal advisor. Although the announcement was repeated by Agence France Press, neither Blair nor LVMH have officially confirmed or denied the appointment. When asked for clarification in a written request from The Electronic Intifada, the office of Tony Blair remained silent. The lack of transparency on Blair’s position stands in stark contrast to his portfolio as Quartet envoy which tasks him with teaching Palestinians how to build up transparent government institutions.

Blair also serves as a consultant to companies and countries on the principles of good governance. In a 28 June address to the Institute for Government on the importance of governance in the modern world, Blair reflected on ten lessons he had learned during his time as prime minister. His first lesson was that “Governance is not a debate as sometimes people think of it, as a debate about transparency or accountability. It is a debate about effectiveness and efficiency” (Institute for Government).

Blair’s lack of transparency on his dealings with LVMH appears to be typical of how he operates, with an almost indistinguishable line between his public duties as Quartet envoy and his private profit.

Richard Murphy, an accountant from Tax Research UK, explained to the UK’s Guardian how Blair can keep his wealth a secret. By setting up a complicated structure of 12 different entities Blair has been able to take advantage of obscure loopholes in UK regulations to side-step rules that normally require the publication of accounts.

The complicated legal structures that enable Blair to to keep his finances secret are “simply an administrative vehicle established in order to allow Mr. Blair’s office sensibly to administer his different projects,” Blair’s spokesman told the Guardian (“Mystery of Tony Blair’s money solved,” 17 December 2009).

Transparency has also been a difficult goal for LVMH to achieve. In 2004, the company tried to avoid the bad publicity that its Louis Vuitton division collaborated with the Nazis during the German occupation of France. While writing about the history of Louis Vuitton in honor of its 150th anniversary, author Stephanie Bonvinci requested the company’s war-time documents. She was told that the company documents for the period 1930-1945 were destroyed in a fire.

Undeterred, Bonvinci researched historical archives and talked to surviving family members. She eventually exposed the links of Louis Vuitton with the Vichy regime, led by Marshal Phillipe Petain, that ruled France during the Second World War and openly collaborated with the Nazi occupation. LVMH did not contest the contents of Bonvinci’s book.

Given LVMH’s lack of openness about its wartime history, it is ironic that Blair would have no qualms about working for the company. As Prime Minister Blair’s government instituted the first annual Holocaust Memorial Day in the UK in 2000, something he justified by stating: “I am determined to ensure that the horrendous crimes against humanity committed during the Holocaust are never forgotten” (“Plan for Holocaust Memorial Day,” Press Association, 18 October 1999).

Tony Blair’s political and business roles pose a serious conflict of interest. As the Quartet’s envoy to the Middle East he is no doubt familiar with the 2004 ICJ ruling and the plethora of UN security resolutions pertaining to the occupied Palestinian territories. He also knows that Ahava’s factory and tourist center are built in violation of international law. And yet he refuses to disclose whether or not he has a paid role as advisor to the chairman of a company in business with Israel’s occupation.

Adri Nieuwhof is a consultant and human rights advocate based in Switzerland.

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