From Iraqi oilfields to Tory HQ: how Nadhim Zahawi mixed business and politics

Nadhim Zahawi, chair of the UK Conservative get together, is because of publish his memoirs later this yr. The title, A Boy from Baghdad: My Journey from Waziriyah to Westminster, displays a profession that has taken him from the dusty oilfields of Iraqi Kurdistan to the higher echelons of British politics.

The ultimate chapter, nevertheless, will want a significant rewrite.

Zahawi is the main focus of the primary huge scandal to engulf the younger premiership of Rishi Sunak after revelations a couple of clash with the taxman which have left him struggling to carry on to his job.

On the weekend, a Zahawi ally admitted that he had paid a penalty to HM Income & Customs, as a part of a complete settlement of £5mn for unpaid taxes. Sunak, who enlisted Zahawi to organize the Conservatives for an election subsequent yr, has as a substitute ordered an ethics inquiry into his tax affairs and faces big strain to sack his get together chief.

It’s the newest chapter in a life story by which Zahawi has efficiently straddled the worlds of enterprise and politics, changing into vastly rich and occupying a number of senior positions in authorities. Within the dying days of Boris Johnson’s authorities, he even held one of many nice workplaces of state, serving as chancellor of the exchequer for 2 months.

Rishi Sunak, left, is beneath strain over the tax affairs of Nadhim Zahawi, proper © Tim Hammond/No10 Downing Road

Born in Baghdad, he has gone from working for disgraced peer Jeffrey Archer to performing as a fixer for oil firms within the notoriously murky world of post-Saddam Iraq. In 2000, he co-founded YouGov, the polling group, which might earn his household tens of millions.

Many colleagues admire him for his pluck and backslapping bonhomie, for his competent dealing with, as vaccines minister, of Britain’s battle towards Covid-19, and for undoubted prowess as a self-made businessman.

However all through his profession, he has confronted criticism for blurring the traces between enterprise and politics, between the general public and the non-public. These criticisms have come to a head within the newest scandal. When Zahawi agreed a settlement over earnings from his household’s YouGov stake, he was on the time chancellor, main the division that oversees HMRC.

One former Tory minister described Zahawi as a well-liked MP and profitable risk-taking entrepreneur. However now, he mentioned, Zahawi could have lastly “flown a bit too near the solar”.

Zahawi was born in 1967 into an influential Kurdish household. One grandfather had been governor of the central financial institution, his signature showing on Iraq’s banknotes.

Aged 9, he watched his father Hareth flee Baghdad. An entrepreneur, Hareth had fallen foul of Saddam Hussein’s Ba’ath get together for refusing to affix its ranks. Tipped off to a raid on his home the evening earlier than, he boarded a one-way Swissair flight to London in 1978.

Nadhim, who didn’t communicate English when the household arrived within the UK on the age of 11, quickly discovered his toes.

He graduated in engineering then confirmed a aptitude for entrepreneurship, sourcing and distributing T-shirts and Teletubbies merchandise to retailers similar to Marks and Spencer.

It was whereas campaigning for Kurdish victims of the Hussein regime that he met Archer, then a outstanding Tory politician, who raved in regards to the younger man’s administrative abilities.

“In the event you mentioned ‘I would like six taxis, three aeroplanes and a double-decker bus, all in half-hour’ he went and did it,” he informed the BBC.

In 1999, Zahawi labored on the failed London mayoralty bid by Archer, who two years later was convicted of perjury fees and jailed for 4 years.

It was on that marketing campaign he met Stephan Shakespeare, with whom he went on to discovered polling firm YouGov in 2000, floating the enterprise on the inventory market 5 years later.

A 42.5 per cent founder’s stake within the group went to Balshore, a Gibraltar-registered entity managed by his father. By 2018, that shareholding had been bought off by Balshore for £27mn, disposals which are thought to have led to Zahawi’s settlement with HMRC final summer time.

Zahawi within the kitchen of his house in Radcliffe Sq., London, in 2004 with inside designer Broosk Saib © Shutterstock

Right this moment, though he’s value lower than Sunak, who’s married to the daughter of a billionaire, Zahawi is wealthy past the goals of most MPs.

He owns a property empire valued at greater than £58mn, in keeping with accounts filed at Firms Home by his firm Zahawi & Zahawi. It features a lavish townhouse in Belgravia, London, bought for £13.75mn in 2013, in addition to a house and livery yard in Stratford-upon-Avon.

In 2013, Zahawi was criticised by his political foes when it emerged that he had claimed £5,822 in bills for heating the stables with taxpayer cash. This was an harmless error, he mentioned on the time: “I’m mortified by this error.”

Similtaneously the YouGov polling enterprise was taking off, Zahawi was additionally searching for business alternatives again in Iraq after the US-led invasion in 2003.

His father’s firm — then known as the Al-Zahawi Group, however now often called Iraq Tasks Enterprise Improvement (IPBD) — rapidly procured a contract to supply cleansing, logistics and assist companies to the brand new US-led interim authorities, primarily based at Hussein’s Republican Palace.

Within the early days after the invasion, Zahawi labored out of a small, dusty workplace in the identical wing of the palace as Paul Bremer, head of the occupying authority.

It was then that he first met his good friend Boris Johnson who, as editor of The Spectator, had commissioned a YouGov ballot of Baghdad residents in regards to the US invasion.

Zahawi, who grew to become MP for Stratford in 2010, as soon as mentioned of his life in parliament: “My first precedence, earlier than anything, is my constituency work and I might by no means, or have by no means, let something get in the best way of this.”

But his extracurricular enterprise actions occupied a big chunk of his early years as an MP.

Inside weeks of election he grew to become the vice-chair of the All-Occasion Parliamentary Group (APPG) on Kurdistan, taking 5 free journeys to the autonomous area of Northern Iraq between 2011 and 2015 funded by the area’s authorities.

At across the identical time, he additionally arrange his Zahawi & Zahawi Ltd consultancy, which he would use for the following seven years to advise oil firms working within the energy-rich area, netting him greater than £1mn in charges.

For a handful of oil firms in a disaster, he quickly grew to become a person to show to: a go-to fixer who might assist easy relations or make introductions between oil executives and Kurdish officers, business sources mentioned.

“With rumours of 45bn barrels of reserves, everyone needed a chunk of the cake, and corporations have been preventing arduous,” mentioned Alan Mohtadi, who heads T&S Consulting Vitality and Safety, which advises firms within the Kurdish oil and fuel sector.

A Gulf Keystone oil nicely: by July 2015, Zahawi had landed a profitable position as chief technique officer © Sebastian Meyer/Corbis/Getty Photos

On the time, the business was largely run on private, moderately than institutional, relationships, Mohtadi mentioned, which meant that corruption was rife.

Oil firms relied on consultants with shut ties to regional authorities officers, together with the influential minister for pure assets, Ashti Hawrami, who is basically credited with constructing the business from scratch.

Though Zahawi was an “opportunist”, within the phrases of 1 oil advisor, there isn’t any suggestion that he acted improperly in Iraq, an oil-rich nation blighted by endemic corruption, together with in its vitality sector.

Individuals who know him say that Zahawi’s political ambitions within the UK made him very cautious about any wrongdoing. “He was very cautious about his ties there and the way they could possibly be perceived,” one individual mentioned.

After Zahawi entered parliament, he started constructing nearer ties with the Barzanis, one of many two ruling households who dominate the Kurdistan area’s dynastic politics. They noticed him as a possible conduit to each the British authorities and to Hawrami, the oil minister, in keeping with business sources and individuals who know his household.

In accordance with parliamentary data, Zahawi & Zahawi’s purchasers included London-listed oil producer Afren. The Texas-based firm was later investigated for bribery by the Critical Fraud Workplace in 2015, and two Afren executives have been jailed for fraud and cash laundering. Zahawi had already dropped the troubled firm, and there’s no suggestion that he was concerned in any wrongdoing.

By July 2015, he had landed a profitable position as chief technique officer at Gulf Keystone, which operated the Shaikan oilfield, one of many Kurdistan area’s largest.

Gulf Keystone was paying Zahawi £29,643 a month by the point he stepped again from the position in 2017. In complete, together with a £285,000 leaving bonus, he earned no less than £1.3mn.

At the moment, oil firms have been struggling to safe common funds from the Kurdistan Regional Authorities in return for his or her exports, whereas additionally grappling with low crude costs.

Gulf Keystone was in freefall, having publicly clashed with the Kurdistan Regional Authorities over unpaid payments. However quickly after Zahawi was appointed, it started receiving its funds on time and in full, not like most different oil firms, Kurdish oil sources mentioned.

“Zahawi’s affect managed to push them to the pinnacle of the queue,” mentioned one advisor engaged on related initiatives on the identical time. “[Some] rival oil firms felt the Kurdistan Regional Authorities was enjoying favourites.”

Zahawi meets Kirkuk provincial governor Najim al-Din Karim in Kirkuk, Iraq, in September 2017 © Marwan Ibrahim/AFP/Getty Photos

The Tory MP additionally accompanied senior members of the KRG to conferences with British officers, together with Johnson when he was mayor of London after which prime minister.

In 2013, he additionally grew to become a big shareholder in Anglo-Turkish exploration firm Genel Vitality, which operated a area in Kurdistan. On a four-day journey by MPs to Erbil paid for by the Kurdistan authorities in 2013, the parliamentarians visited an oilfield run by Genel.

Zahawi grew to become UK junior schooling minister in January 2018. Nevertheless, his rise to the ministerial ranks was virtually derailed simply days later when it emerged that he had attended a Presidents Club charity dinner exposed by the Financial Times because the scene of sexual harassment.

He was given a “dressing down” by Theresa Could, then prime minister. However he mentioned he had left early and had not witnessed “the horrific occasions”, which he condemned “unequivocally”.

Months later he grew to become a junior minister within the enterprise division (BEIS), the place he was working when Covid hit.

At first of the pandemic he intervened to assist facilitate a brand new business opportunity for Greensill Capital.

Greensill supplied £400mn of credit score to entities linked to GFG Alliance, the conglomerate owned by metal tycoon Sanjeev Gupta, after the loans have been backed by the federal government as a part of its Covid assist measures for the economic system.

David Cameron, the previous prime minister who earned tens of millions of kilos as a boardroom adviser to the controversial financing agency, informed Zahawi by way of textual content in 2020 that he had been “v useful” with Greensill’s profitable bid to supply taxpayer-backed Covid loans.

Zahawi with David Cameron in 2010 © Peter Macdiarmid/Getty Photos

Gupta, whose companies are actually beneath felony investigation for fraud, went even additional in a letter to Zahawi a couple of months later, describing the federal government minister as “personally instrumental” in getting Greensill permitted on the scheme.

But when journalists investigating the Gupta scandal tried to acquire the federal government minister’s correspondence with the 2 males, they hit a brick wall: Zahawi’s messages had been deleted.

Whereas a Freedom of Data request from the Monetary Instances ultimately revealed that “a textual content trade or cellphone name between Sanjeev Gupta and Nadhim Zahawi befell at an unknown date” in relation to “Covid help”, the enterprise division disclosed that there “was not an digital report of the communication saved on the machine utilized by Nadhim Zahawi, which was his private cell phone”. 

By the point the FT uncovered Gupta’s lavish reward of Zahawi, the foremost authorities inquiries into the collapse of Greensill Capital had come and gone.

Allies of Zahawi say he took steps to assist a struggling business, of totemic political significance, as minister answerable for the metal jobs.

Beneath the premiership of his outdated good friend Johnson, Zahawi’s political profession took off with the delicate job of vaccines minister in the course of the pandemic, adopted by schooling secretary after which, after the resignation of Sunak in July 2022, the chancellorship.

Zahawi receives a Covid jab as vaccines minister in 2021 © Dominic Lipinski/PA

After Johnson introduced his resignation, Zahawi stayed on as chancellor for 2 months and mounted an abortive try to win the get together management.

His marketing campaign struggled to achieve momentum, not least with the primary revelation that he was in a dispute with HMRC about his tax affairs. On the time he steered that the claims have been a media “smear”.

Zahawi’s place had all the time been that Balshore, his father’s firm, owned the 42.5 per cent stake in YouGov, and that neither he nor his spouse or kids have been beneficiaries.

However final summer time consultants identified that YouGov had described Balshore as “the household belief of Nadhim Zahawi” in its studies. Likewise, Zahawi obtained a cost from Balshore of £99,000 in 2005.

On July 9 final yr, he informed The Instances: “All of my enterprise pursuits have been correctly handled and declared from 2000.” On August 24, his legal professionals wrote to Dan Neidle, the tax professional who raised questions on Zawahi’s tax affairs, saying: “Our shopper’s taxes are absolutely declared and paid within the UK.”

Some colleagues are baffled as to why Zahawi didn’t admit that he was in talks with HMRC officers about his personal tax settlement whereas operating the Treasury, and as a substitute tried to silence Neidle and journalists with authorized threats.

Zahawi grew to become chancellor in July 2022 © Simon Walker/HM Treasury

One former cupboard minister mentioned there was a “case for the defence” that Zahawi could have been disputing the Inland Income officers simply as he grew to become chancellor. “Generally the Inland Income makes an infinite mess of their investigations and also you’re entitled to problem them.”

However, this month, Zahawi’s makes an attempt to keep away from scrutiny crumbled when The Guardian revealed that the cost he made to HMRC was near £5mn, made up of £3.7mn of unpaid taxes, a £1.1mn advantageous and a few curiosity.

At first a spokesperson refused to touch upon the report however, by final Saturday, Zahawi had issued a press release disclosing that he had reached a settlement with HMRC after what he known as a “careless and never deliberate error” in relation to the tax remedy of shares in YouGov.

Even then he refused to say how a lot he had paid or whether or not there was a penalty. Solely on Sunday night did one ally affirm that the settlement included a penalty.

Zahawi didn’t reply to a request for touch upon Tuesday.

Sunak, promising to steer a authorities of “integrity, professionalism and accountability” has launched an ethics inquiry “to unravel every part”.

“Nadhim’s completed,” mentioned one senior Tory MP. “He’s toast.”

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