Skip to main content
xYOU DESERVE INDEPENDENT, CRITICAL MEDIA. We want readers like you. Support independent critical media.

Secretive Investments of Private Philanthropies Stand in Contradiction to Their Motives

An investigative report by Science has revealed that the Wellcome Trust, a leading philanthropy had offshore investments worth more than $50 million in companies that clearly violate the Trust’s motives.
charity hypocrisy

Image Courtesy: Struggle PK

Private philanthropies and big funders in researches may stand in sharp contrast to what they actually claim to support. The secretive investments of many of these private research funders compel them to get engaged, however indirectly, in activities that they claim to fight against—an investigation by Science supported by the Science fund for investigative reporting revealed.

Let’s begin with the example of Wellcome Trust—one of the world’s leading private philanthropies and funders of many long-term studies worldwide. Wellcome Trust, in recent times, invested in a number of researches about the deadly effects of air pollution on human health. They also published many findings; one was on the Hong Kong residents who were exposed to higher levels of smog, especially the tiny particles emanating from soot, produced by fossil fuel burning. It said that people exposed to an elevated level of soot atmosphere are more likely to die of cancer than people breathing cleaner air. It was a long-term study supported and funded by the Trust.

The study was published in Cancer Epidemiology, Biomarkers and Prevention in 2016. This was just one of the many researches that Wellcome Trust has invested in environmental research. The London based philanthropy claims – “We aim to stimulate research excellence and develop global collaborations to drive change”—reiterating their commitment to make cities healthy and environmentally sustainable.

However, ironically enough, more than $ 1.2 billion that the trust has invested annually in recent years, come from its investment in companies that contribute to environmental pollution—the problem that the philanthropy claims to be committed to solve. The trust became an investor in Varo Energy, a Switzerland based company that sells fuel to shipping firms. Among others, bunker fuel is an important product of Varo Energy. Bunker fuel is produced for marine engines. This fuel is a sulfurous residue of oil refining which is a major source of soot pollution. According to the estimates of researchers, some 250,000 premature deaths are caused by particulates from ship stacks.

But the trick that Wellcome Trust played was that of not investing directly in Varo. The trust took an indirect way of investing—through an offshore investor fund, Carlyle International Energy Partners, based in the Cayman Islands. That offshore fund, in turn, owns a stake in Varo Energy. This was, as Science reports, included in the Paradise Papers which is a set of confidential electronic documents relating to offshore investments, which were leaked to a German newspaper. This claimed that Wellcome committed around $ 50 million as an offshore investment.

Offshore investment is the keeping or investing of money in a jurisdiction outside one’s own country. It has become a common practice on part of many large investors worldwide. One of the motives of this kind of investment is reducing the amount of tax the investor would have to pay to its home nation.

Offshore Investments: Legal or Controversial?

Despite being legal, offshore investments are not out of controversies. Many question these kinds of investments, mainly for the secrecy and lack of transparency involved in it. Wellcome’s investments in bunker fuel shows the common contradiction that some major scientific grant makers involved in offshore investments have to face nowadays. According to the Science investigation, offshore investments can impact heavily by diminishing or negating the high minded social experiments, education and research backed by science funders.

But, Wellcome Trust is not the only one that faces such criticism of being contradictory in what they claim and what they practically do.

Also Read: Under the Cover of Philanthropy: A Monopoly Machine at Work

Science examined seven of the world’s largest private research and found their offshore investment trajectory as follows:

Capture_6.PNG

Source: sciencemag

The arguments given in favour of offshore investments by the philanthropy and foundation experts say that it is required to meet out the fiduciary requirements of the trusts. But these lines of arguments have been criticised heavily by different economic experts. Nobel laureate Joseph Stiglitz of Columbia University gives a harsh criticism—“They are robbing the taxpayers and are giving life to an institutional arrangement which is basically nefarious and bad for our global society.” Similarly, Gabriel Zucman from the University of California, Berkeley, who studied offshore investing said— “Foundations that invest in tax havens need to know that … they are alongside criminals, tax evaders, and kleptocrats”.

Get the latest reports & analysis with people's perspective on Protests, movements & deep analytical videos, discussions of the current affairs in your Telegram app. Subscribe to NewsClick's Telegram channel & get Real-Time updates on stories, as they get published on our website.

Subscribe Newsclick On Telegram

Latest