St Bono the hypocrite?

By PAUL SCOTT

Last updated at 23:04 11 August 2006


Bono

Cosying up to jailed tycoons and paying as little tax as possible. How U2's frontman built a £1billion business empire ... while bullying the rest of us to make poverty history.

For the band of super rich moneymen and corporate suits, the highlight of an impossibly glitzy birthday party being staged at the San Francisco zoo was an impromptu guitar jam session. After members of the assembled throng had strummed tunelessly through a series of Beatles numbers, the room fell silent as one guest - bedecked with his trademark oversized sunglasses - began to serenade the evening's multi-millionaire host with a song he had written specially for the occasion.

For Bono, one of the biggest rock stars in the world, it was not a typical gig, particularly as one member of the soiree's improvised backing band was a one-time jailed financier embroiled in an infamous shares scandal.

But then the U2 frontman and self-styled saviour of the Third World has been keeping some decidedly unusual company these days.

Witness, for example, his decision this week to buy a major share in Forbes magazine, that bible of capitalism and scourge of the liberal Left.

None of which is very rock 'n' roll, and all rather at odds, one would think, with his image as campaigning activist and anti-poverty hero - especially given his recent highly controversial decision to relocate U2's business empire to Holland to avoid paying tax.

It is not surprising that the formerly feted star is finding himself increasingly under attack - even from his own fans - amid accusations of hypocrisy.

So just what has happened to Saint Bono? His transformation, according to those who know him, is all part of the 46-year-old star's plan to move away from performing and into the worlds of high finance and politics.

For behind Bono's working-class, man-of-the people facade lies someone whose love of money is matched only by his obsession with making even more of it.

To that end, the Irish-born singer has quietly established a private equity fund to invest more than £1billion in a series of money-making ventures.

He set up Elevation Partners, named after a U2 song, last year with five former senior figures from the world of business, including the former chief financial officer of Apple Computers.

Experts predict the venture could double Bono's personal fortune of £400 million in the next ten years.

He has a property portfolio that includes a villa in the South of France and a lavish Italian-style palazzo overlooking the sea near Dublin, not to mention the £15 million penthouse on Manhattan's Upper West side he bought from Apple boss Steve Jobs.

The apartment, which takes up two floors of the 27-storey north tower of the ultra-exclusive San Remo building, is listed as one of New York's top 40 properties and boasts 12ft nickel and bronze doors and floor-to-ceiling windows costing £40,000 each.

The building, which is also home to Steven Spielberg, is so select that its management committee once blackballed Madonna's attempts to move in.

Having said that, those who have visited describe Bono's apartment, with its avant-garde stone walls and floors, as 'charmless and stark'.

Despite its huge sun terrace with stunning views of Central Park, one visitor commented: 'It has absolutely no warmth.'

Meanwhile, on top of his own lavish property in the upmarket Killiney district of Dublin - which he shares with his wife of 24 years, Ali, and their children, daughters Jordan, 17, and Eve, 15, and sons Elijah, seven, and six-year- old John Abraham - the shrewd star paid £3million two years ago for his neighbour's house and linked the two with a corridor.

Bono, whose real name is Paul Hewson, also counts a familysized Maserati among his fleet of luxury cars and is known for his taste for fine food. He is also a noted wine connoisseur, who will regularly spend thousands on a single bottle at his favourite New York restaurants.

He and the three other members of U2, Adam Clayton, Larry Mullen and guitarist David 'The Edge' Evans, have also invested in Vertigo 3, an Airbus A320, to fly them around in style on their current world tour.

On board is the singer's own fulltime priest and personal spiritual advisor, Father Jack, who travels everywhere with him.

All this from someone who, with Bob Geldof, was the prime mover behind last year's Live8 concerts and personally lobbied Western leaders to secure a $50billion aid package for the world's poorest countries.

Of course, no one can begrudge Bono the wealth he has made. What does leave him open to those accusations of hypocrisy is U2's decision, announced this week, to move part of its multi-million pound operation (the band is the world's most profitable, earning £141million last year) from Ireland to Amsterdam after the Irish government announced it was reforming its famously lenient tax laws for artists.

But then the group - and particularly its charismatic leader - are well known in the industry for their astute business sense.

Their empire, run by financial arm Principle Management, is made up of myriad interlinked companies designed to minimise the amount of tax the band members pay. Unlike most musicians, the bandmates still control the lucrative rights to all their own music.

Bono, meanwhile, has sought tirelessly to make contacts in the world of venture capital. One of these is Roger McNamee, with whom he now runs Elevation Partners.

McNamee, a long-haired, geeky 50-year-old part-time musician who drives a humble Toyota Camry, is famed as one of the smartest dealmakers in California's 'Silicon Valley' with a personal fortune estimated to be more than $100million.

He is said to have spotted the singer's head for business and his potential for helping the fledgling company open doors into entertainment and the media.

Elevation has already invested more than £200million in merging two computer games firms and last year made a bid for Eidos, the makers of Lara Croft: Tomb Raider.

All high-powered stuff - and sources in America told the Mail this week that the star is now interested in buying a stake in the large U.S. newspaper group Knight Ridder to add to his well-publicised bid for BMG Publishing, which owns the song rights to Coldplay and Christina Aguilera.

But it is his 40 per cent buy-out of Forbes, which cost close to £160million, that has catapulted Bono into the big league of corporate finance.

The 89-year- old magazine, described as 'the ultimate mouthpiece of capitalism', is known for its lists of everything from the 100 richest people to the most expensive homes (in the current edition, U2 come in at number four in the roll call of the world's richest celebrities).

Former U.S. presidential candidate Steve Forbes, who is editor-in-chief and whose family stands to make a huge profit from the deal, let slip this week that Bono was already an avid reader of the magazine - news that will hardly help his right-on credentials.

Nor will that jamming session with a scandal-hit businessman who was a fellow guest at the San Francisco party thrown for Roger McNamee's birthday two months ago.

Former New York investment banker Frank Quattrone, 50, who like McNamee is a would-be rocker, was jailed two years ago for his part in an alleged cover-up during a government investigation into the sale of millions of dollars of shares.

The former Credit Suisse banker, who earned upwards of £75million a year, was given an 18-month sentence, but appealed against it and in March his conviction was overturned. Later this month he will learn whether he must face a retrial.

It is Bono's involvement with such people that has raised alarm bells at his record company Interscope, who fear it could damage his everyman reputation. Their concerns come at the same time as rumours that he is considering scaling back his music career and moving into politics - as well as tensions with his bandmates over his constant round of jet-hopping diplomacy.

One Interscope executive told the Mail: "Bono is about as cool as a person gets. That's why his fans absolutely adore him.

"Though he has had to become involved in the worlds of politics and finance because of his charity work and his career, he has always somehow managed to remain above it.

"He has been acutely aware that if his image becomes more about his money than his talent, he will be very damaged in the eyes of the people who buy his records.

"That's why I just can't understand him buying into Forbes. It is just wrong for his image and, on the surface, sends out a terrible message that U2 are just like the

"That and all the details of the band's tax breaks becoming public is really worrying because I think it could turn people against them - which would be a disaster because Bono has done some truly wonderful things, not only in music but with his campaigning."

"There's no doubt that Bono and Elevation plan to be big players," U.S. financial journalist Matt Marshall told the Mail.

"I know Roger McNamee very well and he is one of the most astute people in Silicon Valley.

"But don't think Bono is just there for his name. I was speaking recently to a senior executive from Hewlett Packard who has done business with Bono and she told me he is the real deal and incredibly focused."

All of which will no doubt help him add to his already massive bank balance. But will it also result in Saint Bono losing his halo?

 

Here's what readers have had to say so far. Why not add your thoughts below?

       

Respect to Bono, he has made his money by being part of the worlds most popular band for over 20 years. The same 5 guys (band plus manager) have stayed together throughout and share their wealth equally. He has never been scandalized by drugs and groupies, spending his life with his childhood sweetheart. Give him credit for being brave enough to stick by his genuine Christian faith. He knows that the currency of celebrity is absurd and he is using it to get to the corridors of power. I am glad he does, others in is position would stay on the beach. As readers have said, no one volunteers to pay more tax. His involvement in Africa is traced back to his (private at the time) work with his wife in 1985 after Live Aid in Ethiopia. To Bono's critics I say this, what have YOU done to help alleviate chronic poverty in the World? However, I agree the Forbes deal may impact on the less well informed opinion of him, but Bono never feared being unpopular.

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So what if he moved his operation to Holland? We all minimize our taxes whenever we can. Besides, why should U2 fans finance the Irish government, anyway?

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It doesnt really matter. Look at Oprah, who is already billed at worth over a billion, she helps out once and a while, but still runs with all the causes. As well, they are not ready to give up the fortunes yet, but maybe someday they will make a large donation like Warren Buffett.

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