Tony Blair’s business empire hit by second high-profile resignation

Firerush Ventures faces fresh scrutiny as chief operating officer Mark Labovitch leaves post after just one year Tony Blair’s business operations are under scrutiny after the departure from his investment firm of a high-profile banker with connections to some of the world’s richest investors and the revelation that the former prime minister secured big deals in the Middle East for a Wall Street bank. Mark Labovitch’s resignation as chief operating officer of Blair’s Firerush Ventures, little more than a year after he was appointed to the post, threatens to leave a hole in Blair’s business empire. Labovitch, 48 – who was appointed at the same time as a former Lehman Brothers banker, Varun Chandra, joined Firerush as an adviser – was seen in financial circles as someone who could open doors for Blair. The Financial News newspaper described him as possessing “an expansive Rolodex of contacts and relationships built up during more than a decade as a senior investment banker”. Firerush is crucial to Blair’s fortunes, not to mention the 130 people who work for him. Blair explained a couple of years ago, when his staff was much smaller, that he had to “earn £5m a year to pay the wages”. Firerush, which gives its address as a PO box in west London, is licensed by the Financial Services Authority to offer investment advice in a number of countries, including three that have low-tax environments – Gibraltar, Lithuania and Romania. Records filed at Companies House show that the Oxford-educated Labovitch joined Firerush on 1 June last year. He resigned on 28 July this year. It is unclear why Labovitch – who is reportedly to become a director at Coventry City football club and has joined Gems, a Dubai-based provider of private education – parted company with Blair. In an email sent to the Observer, he declined to comment. Blair’s spokesman also declined to answer emailed questions. News of his departure comes as a Channel 4 Dispatches programme to be broadcast tomorrow reveals Blair’s role in two multi-billion dollar contracts in Palestine. The programme shows how, in his role as the Quartet’s Representative to the Middle East, Blair helped persuade the Israeli government to open up radio frequencies so that a mobile phone company, Wataniya, could operate in the West Bank. He also championed the development of a huge gas field off the coast of Gaza operated by British Gas. Both Wataniya and British Gas are major clients of JP Morgan, the US investment bank that pays Blair £2m a year for a role as a senior advisor. Blair’s business empire sparked interest in his relationship with the Libyan Investment Authority (LIA), the $70bn fund used to invest the country’s oil money abroad. Blair’s close links to Saif al-Islam Gaddafi, son of the country’s former leader, are well documented. Last week a senior executive of the fund suggested that the former prime minister had made representations to Gaddafi on behalf of JP Morgan. It also emerged that, after he stepped down from Number 10, Blair wrote to Muammar Gaddafi offering investment advice for projects in Africa. “You know I am doing a lot of work there and know of good worthwhile projects for investment,” Blair told the despot. A spokesman said Blair never sought payment nor received it from Gaddafi or the LIA. Since he left office, Blair’s business empire has helped him sustain a jet-set lifestyle. The Daily Mail claims he is a regular at Abu Dhabi’s Emirates Palace hotel, one of the most expensive resorts in the world. He has acquired a £5.75m country house in Buckinghamshire and a £3.7m home in London. In addition, Blair and his wife, Cherie, have bought properties for their children. In addition to his work for JP Morgan, Blair is on a lucrative contract to advise the insurance firm Zurich and is understood to be paid as much as £200,000 a speech. Blair has also been paid for consultancy work by a South Korean oil firm, UI Energy Corporation, which has extensive interests in the US and Iraq, and by the ruling family in Kuwait, from whom he received a reported £1m fee. Another of his companies, Tony Blair Associates, which offers “strategic advice on both a commercial and pro-bono basis” has a contract with Mubadala, an Abu Dhabi investment fund. Blair also earns a reported £700,000 a year as an adviser to Khosla Ventures, a US venture capitalist firm founded by Indian billionaire Vinod Khosla. Labovitch’s exit follows that of another Firerush director, former No 10 staffer Jo Gibbons, who was Blair’s director of corporate affairs and left last year. He advised Russian oligarchs during his time at the investment bank Dresdner Kleinwort Wasserstein and was responsible for stitching together more than $8bn-worth of deals for the oil and gas giant Gazprom. He also has strong connections to wealthy investors in the Middle East and was, until recently, an executive of the company that owns the Independent newspaper. As COO of Firerush, Labovitch was at the centre of a complex web of companies that, due to the way they are structured, have to disclose only a minimal amount of information concerning Blair’s business operations, the profits he makes or indeed how he makes his money. However, someone familiar with Blair’s business activities suggested he is keen to cultivate closer relationships with Russian oligarchs. Earlier this month he gave a speech at the eighth Yalta annual meeting organised by Yalta European Strategy, which campaigns for Ukraine to join the European Union. The Yalta meetings are promoted by a foundation set up by Victor Pinchuk, one of the world’s richest men, who has an estimated fortune of $3.3bn and owns TV channels and steel plants. Tony Blair Jamie Doward guardian.co.uk

Posted by on September 24, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.