Invited by the University of Birmingham Conservatives, controversial backbench MP Jacob Rees-Mogg visited campus on Friday 9th March, speaking about his views on free speech, housing, mental health, Russia and tuition fees to a packed lecture theatre of around 300 students.Written by Erin Santillo & John Wimperis on 16th March 2018
Paradise Papers Implicate Oxford, Cambridge, and Over 100 American Universities
The universities of Oxford and Cambridge, as well as ‘more than 100’ American universities, possess offshore interests on which they pay minimal tax, the Guardian has reported
This revelation was made by the Paradise Papers, a worldwide investigation that has revealed financial undertakings of large multinational companies (MNCs) as well as high profile individuals. Stanford University, a member of the Ivy League was named in the files. On its website, Stanford identifies itself as a ‘$5.9 billion enterprise’.
Investment in offshore developments allows institutions like Stanford to grow their, already immense, wealth in a clandestine way. Although the majority of American colleges and universities are exempt from tax under US Federal law, the offshore funds invested in are not necessarily free in this way.
“All the Caymans offer is secrecy and tax avoidance
Offshore investments are not a practice simply limited to US universities, the Paradise Papers also revealed that University of Oxford and the University of Cambridge, in addition to nearly half of all their individual colleges, also invested millions abroad. The Guardian reported that ‘tens of millions of pounds’ were covertly invested offshore.
Prem Sikka, emeritus professor in accounting at the University of Essex, told the Guardian, ‘All the Caymans offer is secrecy and tax avoidance’. The universities used ‘blocker’ corporations to facilitate the movement of money. These allowed them to invest in hedge funds while avoiding paying US taxes on trade or business income.
The practices by American and British institutions are revealing. In both cases, investments were made in companies whose actions appear to contradict their ‘values’. Northeastern University’s website states that the institution is ‘committed to research and education in Sustainability as one of the university’s main strategic and programmatic pillars’, and goes on to list research into areas such as climate extremes, manufacturing, coastal sustainability, and energy sustainability.
“You cannot be sure what universities are doing with the money you pay
Northeastern University was also found to be investing the ‘Energy Capital Fund IX-C’, a Cayman Islands based hedge fund which feeds into a subsidiary of the private equity company, EnCap Investments. EnCap Investments describes itself as ‘the leading provider of venture capital to the independent sector of the U.S. oil and gas industry’ and claims to have ‘successfully invested with more than 240 upstream and midstream oil and gas companies’. Northeastern’s involvement with EnCap Investments seems directly opposed to their ‘pillar’ of sustainability.
“I think the priority of any educational institution should be their students and community
The revelations made by the Paradise Papers show how easily institutions can obscure their financial dealings.
A second year Geography student told Redbrick that the large-scale nature of the investments made them worry, ‘you cannot be sure what universities are doing with the money you pay, it's slightly creepy how they can say one thing and turn around and support the direct opposite’.
A first year law student stated, ‘I think the priority of any educational institution should be their students and community, investing offshore leaves students unaware, and the community disadvantaged’.