by Harry Browne
As with any tax break, those who renewed it annually and those who benefited from it could make a case for the artists’ tax exemption, even as it hugely assisted a handful of super-rich artists, for bringing various ancillary benefits to the state – such as the prospect that you might meet Elvis Costello at a party or see Irvine Welsh in the supermarket. It certainly had the effect of encouraging artistic production in the country, if that can be counted as a benefit. ‘However,’ a journalist wrote, ‘the exemption for artistic income was costing the state tens of millions of euros in forgone tax.’62 Just thirty artists accounted for nearly 60 per cent of what was theoretically lost.63 It must be said that this was small beer compared to what was sacrificed for various non-artistic corporate tax breaks, and what was ‘forgone’ with the low rate of tax on corporate profits that had attracted so many multinational corporations to Ireland. Artists were a convenient scapegoat for Ireland’s tax-haven status, which in reality had little enough to do with the arts. But throughout the period of the Celtic Tiger, perhaps because in the celebrity magazines artists were so visible among Ireland’s conspicuously rich consumers, the artists’ tax exemption came under populist pressure. Bono’s name figured frequently in the discussion, its defenders forced to defend him, as in this newspaper report from a parliamentary committee hearing: ‘An artist like U2 lead singer Bono is “priceless” and, if he left, Ireland would lose an extraordinary economic advantage, David Kavanagh of the Irish Playwrights and Screenwriters Guild said.’64 A Green member of parliament defended the scheme, saying ‘personalities such as Bono [and others] may earn large amounts of money in a particular calendar year but perhaps not earn money in the previous year or the year after’.65 This parliamentarian displayed remarkably little understanding of how U2’s financial affairs might be organised: the last year in which Bono failed to ‘earn money’, and plenty of it, was in the 1970s. On letters pages and radio phone-ins, Bono was the national poster-boy for undeserving tax-exempt artists.
Thus it was that, in 2006, the Irish government capped the exemption for any given individual at €250,000 annually – a threshold that would be a distant dream for the vast majority of writers, painters and musicians, but one that was of immediate concern to U2. (The cap would later be cut still further.) The group responded quickly by relocating U2’s music-publishing arm to Amsterdam, where its royalties would be taxed at just 5 per cent, an arrangement the Rolling Stones had been enjoying for years. The news of U2’s new Dutch location emerged in August of that year to some general outrage in the media and among the public at large, mindful especially of Bono’s whiter-than-white image.
The band initially said nothing in public. The local grapevine suggested that if the move to the Netherlands both saved money and caused public embarrassment to Bono because of his apparent hypocrisy after all his calls for government spending on the Third World’s poor, it would be counted as a win–win proposition by other members of the band. This glee at the reeling-in of Bono’s ego would be enjoyed most, we heard, by drummer Larry Mullen Jr, who was annoyed at Bono’s ‘humanitarian’ globe-trotting, particularly the photo-ops with the despised George W. Bush and Tony Blair (see Chapters 2 and 3). But those were mere rumours.
Commentators picked up the public mood and entered the vacuum left by the band’s silence, with the most savage criticism directed at U2 in Ireland since at least the 1980s. Under the headline, ‘When the Band Has No Shame’, the by-no-means-leftist Hugh Linehan of the Irish Times recalled Leona Helmsley’s famous dictum that ‘only the little people pay taxes’, and continued by attacking U2:
When a special guest showed up for one of the band’s Croke Park concerts last year, the singer welcomed him from the stage. ‘I am aware An Taoiseach [prime minster] Bertie Ahern is in the crowd here tonight,’ he announced. ‘He has promised to give 0.7 per cent of our GDP to Africa and I urge him not to break that promise.’ He added understandingly that: ‘I know it’s hard to build a hospital in Abuja, Nigeria, when you need to build hospitals here.’ The crowd booed bad, mean Bertie and cheered the sainted Bono. Would the little people do the same today?
Even if you’ve never had much time for U2’s particular brand of bombastic stadium rock, you have to respect Bono for the amount of sheer energy he has expended on the Make Poverty History campaign. Remarkably, he has managed for most of the time to be pretty self-deprecating about it – no easy trick. As critics of the campaign have pointed out, it’s a bit, well, rich to be lecturing middle-income taxpayers about their government’s responsibilities, while you’re jetting around the world from one glamorous pad to another, meanwhile getting a third of your income tax-free. But if a key focus of your campaign is to raise the Irish Government’s level of overseas aid to 0.7 per cent of GNP, then it doesn’t look good if, after more than 20 years of tax-freeloading, you jump ship to avoid paying what many would see as your fair share.66
The Irish-born comedian Graham Norton, a popular presenter on British TV, joined the chorus of criticism: ‘People like Bono really annoy me. He goes to hell and back to avoid paying tax. He has a special accountant. He works out Irish tax loopholes. And then he’s asking me to buy a well for an African village. Tarmac a road or pay for a school, you tight-wad!’67
Even a top Irish concert promoter who had previously worked with the band, Jim Aiken, metaphorically burned any remaining boats he might have hoped to berth in U2’s harbour by stating publicly that ‘U2 are arch-capitalists – arch-capitalists – but it looks as though they’re not.’ He added: ‘I believe the ultimate charity donation is to pay your taxes in the country where you live.’68
U2, of course, continued to pay many taxes in Ireland, a country that conveniently continued to have some of the lowest personal and corporate tax rates in Europe. But, however unfairly, no longer would most people believe that their status as Irish tax-residents arose from anything more patriotic than the bottom line. U2’s complex multiple businesses were just doing their own version of the corporate tax-avoidance manoeuvre described memorably in the New York Times, when reporting how a company such as Google uses it, as ‘Double Irish with a Dutch sandwich’.69
Even a reliably establishment journalist such as Matt Cooper could write: ‘Critics of U2 pointed out that the band and its members had been able to increase their wealth dramatically over the previous two decades by reinvesting the tax-free profits they had accrued in such a favourable environment. Having made such a fortune already, how much more did they need?’70 Activists pointed out that, globally, the use of offshore tax havens by rich individuals had a huge cost in terms of lost taxation to governments in the developed and developing worlds.
However, all this criticism was somewhat dulled by Ireland’s general air of prosperity. In 2006 the Irish exchequer was awash in funds gained from taxing a still-booming economy, and what we were soon to learn was a dangerously bubbling property market. The outrage about U2’s tax move was tempered by a sense of satisfaction with the government, not least for the fact that it had forced Bono and the boys into its Dutch move by capping the inequitable artists’ tax exemption to ensure its benefits were enjoyed most by those who needed them most.
Bono was nonetheless sufficiently riled by the criticism that he eventually responded to it, while in Cork in 2007 to receive an honorary degree. ‘Our tax has always been not just to the letter of the law but to the spirit of the law’, he said. ‘This country’s prosperity came out of tax innovation so it would be sort of churlish to criticise U2 for what we were encouraged to do and what brought all of these companies in the first place.’71
Bono had no choice but to drawl a defence that cast U2 as just another corporate entity doing what corporate entities do. U2, we were forced to conclude, was a company like any other. But if this was a little painful for him, at least in 2007 when he said it there was still an honest, if somewhat blinkered, case to be made that ‘tax innovation’ had indeed been broadly beneficial to the Irish economy, leading to initiatives
such as the Irish Financial Services Centre, where more than a quarter of the world’s hedge funds had offices. It wouldn’t be long before that case began to unravel horribly.
MR BONO: DEEPENING CRITICISM
The morality of U2’s tax moves was suddenly under attack again in early 2009, due to a combination of economic hard times and an extremely clever campaign by global-justice activists in Ireland, timed to coincide with U2’s need to show their faces to promote a new album, No Line on the Horizon. Singer Paul O’Toole – dressed vaguely like Bono, in leather trousers and sunglasses – stood outside the Irish department of finance, singing U2 songs with lyrics adjusted for the occasion by activist Sheila Killian:
I want to run, my money to hide
I want to build paper walls and keep it inside
I want to seek shelter from income tax pain
Where the accounts have no names …72
The campaigners were hoping to make a modest point about how tax shelters undermine efforts to build a more equitable distribution of resources around the world. When the handful of well-behaved activists on the street confronted the arriving minister for finance, Brian Lenihan, with their complaints, he seemed almost pleased that a little heat had been diverted from his role in wrecking the Irish economy and financial system. ‘You’ll have to take that up with Mr Bono’, he said with a discernible smile. (The only other recorded instance, by the way, of an Irish public figure calling the singer ‘Mr Bono’ came when the archbishop of Dublin, Diarmuid Martin, introduced him in 1999 to Pope John Paul II – who proceeded to try on Bono’s sunglasses.73 Archbishop Martin also mispronounced Bono’s name, so he was ‘Mr Bone-o’.74)
The global attention won by the small musical publicity stunt in February 2009 was beyond the wildest dreams of the activists who organised it: for days afterwards they traded stories of the far-flung newspapers that had reported their protest. Indeed, it was so successful in garnering publicity – all the coverage highlighting the Bono angle – that some of the NGOs that had lent their names to the ‘Debt and Development Coalition’ responsible for the action began to get cold feet: Bono’s ONE organisation, by then the main vehicle for his global campaigning work (see Chapter 3), was well connected, and with government cuts hitting their budgets they may have been worried about alienating a source of support, or they may have seen Bono as still an ally in anti-poverty campaigns more broadly.
Bono was shrewd enough not to attack directly a group of global-justice campaigners for taking his name in vain. His response came quickly, more in sorrow than in anger, on the front page of the following Friday’s edition of the Irish Times – an edition that was festooned with publicity and special offers relating to the new album. When he might have expected to be revelling in hometown pride, Bono was instead answering vaguely difficult questions – albeit facing no real challenge with his answers.
Part of his answer was evasive, and carried more than a hint of ‘don’t blame me’: ‘I can’t speak up without betraying my relationship with the band – so you take the shit’, he said, implying the others were to blame, and prompting knowing nods from those who had suspected that the tax move hadn’t been his idea and that his bandmates would scarcely worry if it caused him embarrassment. But he was not going to let it lie there: he was ‘hurt’ and ‘stung’ by the criticism, he said, and was prepared to return to his robust ‘all the corporate entities were doing it’ defence, with some ‘it was broadly good for Ireland’ thrown in:
I can understand how people outside the country wouldn’t understand how Ireland got to its prosperity, but everybody in Ireland knows that there are some very clever people in the Government and in the Revenue who created a financial architecture that prospered the entire nation – it was a way of attracting people to this country who wouldn’t normally do business here. And the financial services brought billions of dollars every year directly to the exchequer.75
Helping rich foreign companies avoid taxes was indeed part of the story of the Irish boom. But it is revealing that in 2009 Bono was peddling the same line as in 2007 – ‘this is how the country got rich’ – without any acknowledgment of something else that ‘everybody in Ireland knows’: now that this get-rich-quick scheme had collapsed, Ireland was getting poor as precipitously quickly as any country in the developed world, at least until Greece started to unravel. Bono actually appeared to believe he was justifying U2’s tax-avoidance by referring to the Irish ‘financial architecture’ that by early 2009 was justly regarded as a national scandal. Even the reliably middle-of-the-road Irish journalist Matt Cooper was taken aback that anyone in Ireland in 2009 could talk about the country’s ‘financial architecture’ like it was a good thing: ‘Unfortunately, it was clear already that much of this ‘financial architecture’ had been built on very flimsy foundations and created many of the problems we are currently experiencing today.’ Bono, Cooper wrote, ‘is a citizen of the world as much as Ireland but when he comes home he might be best advised to just shut up and sing.’76
And it’s not only the Irish who might want to tell Bono to shut up. Credible research suggests that Ireland’s ‘financial architecture’ and ‘innovation’ – i.e. the exceptionally light-touch regulation and low-tax regime that brought so many murky funds to the Irish Financial Services Centre – were partly responsible not only for Ireland’s crisis, but for the chaos that gripped global finance in 2008, because its shadowy banking system had significant connections to virtually every important economy on earth.77
Bono had no idea, it seems. Clearly upset, he had more to say to the Irish Times, addressing his critics as though they themselves routinely benefited from shifting their money around various offshore tax havens:
What’s actually hypocritical is the idea that then you couldn’t use a financial services centre in Holland. The real question people need to ask about Ireland’s tax policy is: ‘Was the nation a net gain benefactor [sic]?’ and of course it was – hugely so. So there was no hypocrisy for me – we’re just part of a system that has benefited the nation greatly …78
By Bono’s increasingly belligerent and shockingly out-of-touch logic, then, tax avoidance was an act of patriotism, even when he was taking money out of the country, because as an international activity it was broadly to Ireland’s benefit. Drummer Larry Mullen Jr, not always a reliable ally of the man whose ass he had gazed at across a thousand stages for thirty-plus years, showed similarly touchy out-of-touchness when he whined about dirty looks at Dublin Airport: there was ‘a new resentment of rich people in this country … We have experienced [a situation] where coming in and out of the country at certain times is made more difficult than it should be – not only for us, but for a lot of wealthy people … The better-off [are] being sort of humiliated.’ Without the entrepreneurial rich, Mullen concluded with accidental accuracy, ‘we’d be in a very, very different state’.79
The Edge’s response was much more low-key, and relegated to the last paragraph of the news story: ‘it’s our own private thing. We do business all over the world and we are totally tax compliant.’80 No one had accused U2 of being anything other than ‘tax compliant’: the point of the campaigning around the issue was to highlight the myriad injustices that lurk fully within the category of tax compliance, rather than outside its boundaries.
As on the issue of Northern Ireland, Bono was capable of engaging in the odd bout of selective revisionism when it came to the Irish economy, and financial services in particular. So two years later, in 2011, he told a typically soft and sympathetic interviewer from Hot Press how exercised he was about the ‘privatising profit, socialising risk’ policies being pursued in his home country since 2008:
if ever anti-globalisation protesters wanted to point to an incident of unfairness and injustice, they just have to look at what’s happened to Ireland in relation to the bank bailout, where the people are paying the price for private sector greed. Ireland’s public debt and finances actually weren’t in bad shape, but it was
the private sector that brought this problem.
He added, unnecessarily: ‘I’m all for the private sector, and for people making profit …’81
Bono’s reputation in Ireland is a complex matter, and not something that can readily be measured. Not long after the tax controversy, he came in the top five in a web poll to determine ‘Ireland’s Greatest’ – but when it came to the final TV vote on the vexed question of who was the greatest Irish person ever, he trailed behind.82 The tax issue clearly did him ‘reputational damage’, but for many people it did no more than provide a hard, factual reason for the soft, emotional dislike he aroused. Some anti-Bono graffiti sprang up around Dublin, mostly referring to the tax issue, like the doggerel in Clanbrassil Street that mocked both his financial status and physical stature: ‘Bono is a jerk / He never had to work / He doesn’t pay his tax / He always wears stacks.’ But none were so expressive as the spray-painted phrase that appeared on a wall in the inner city, using a word of dubious provenance but undoubted resonance, one that is practically unique to that locale: ‘Bono is a poxbottle.’83
