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Why would the "Godfather of Tory donations" fund the Global Warming Policy Foundation?

  • 29 Mar 2012, 12:30
  • Ros Donald

Earlier this week, hedge fund boss and Conservative donor Michael Hintze appeared to have been revealed as one of the anonymous funders of Nigel Lawson's cilmate skeptic thinktank the Global Warming Policy Foundation (GWPF). At almost the same time, it emerged that he is one of at least two climate skeptic donors to have dined with David Cameron. 

Some suspect that the GWPF has funding links to the energy industry - something Lawson has always denied. And in the past it has emerged that fossil fuel interests have funded climate skepticism.

But Hintze's involvement suggests likely funders also sit among the Conservative party's so-called Premier League of benefactors. It seems likely to us that rather than direct financial interest, the primary motivation for the Hintzes of this world has its roots in a passion for market deregulation, from which follows an ideological opposition to the UK's climate policies. 

So what's going on? 

The Guardian reported earlier in the week that Michael Hintze, who heads the £5 billion hedge fund CQS, is giving funds to the GWPF - the skeptic thinktank led by former UK Chancellor Nigel Lawson.

According to an email from last September seen by the Guardian, Hintze declined a request for funding from a climate project, saying: "[We are] fully committed at this time. Furthermore we are supporting Nigel Lawson's initiative." Unless anyone knows another climate initiative that Lawson is running, this presumably means the GWPF. 

At the same time, there's been a bit of a furore over cash-for-access to high level Conservative politicians. The names that have come up in this episode include climate skeptic donors.

Both Hintze and Henry Angest, the chief executive of Arbuthnot Banking Group, are among donors whose gifts to the Conservatives total more than £250,000, and both men have dined with David Cameron at his flat at Number 10 Downing Street. Angest also appears to be comfortable funding climate skeptics - he has given money to the Freedom Association, a libertarian campaign group that argues for repealing the UK Climate Change Act on its website, amongst other objectives. 

A prolific donor 

Back to Hintze: he gives to a wide range of causes, including many arts projects. But he's most famous for his large donations to the Tories since at least 2006 - reportedly in the shape of gifts of at least £1.2million and a further £2.5million in loans to date. 

Last October, Hintze's name came up in connection to the funding scandal which led to the resignation of defence secretary Liam Fox, after Fox's unusually close business association with aide Adam Werritty came to light. Oliver Hylton, a CQS employee also lost his job after it emerged that Hylton was the sole director of Pargav, a company funded by Conservative party donors which paid for Werritty's overseas travel. 

Hintze donated money to Atlantic Bridge, a charity of which Werritty was the sole employee. According to the Financial Times, CQS donated £29,000 to Atlantic Bridge in 2010, and in 2011 loaned it £60,000. At the time, we looked at Atlantic Bridge and its close connections to lobby groups which opposed environmental regulation in the US - including a US-based version of the organisation. 

Fox also received around £20,000 directly last year from Hintze and CQS, according to the  Bureau of Investigative Journalism, which looked at Electoral Commission records. And Fox isn't the only MP to benefit from Hintze's largesse: Chancellor George Osborne received nearly £39,000 from Hintze and CQS, and Foreign Secretary William Hague received £25,000 in non-cash donations from CQS, the article says. 

The Labour party (which might have its own interests in this matter) has suggested Hintze expects favours in return for his donations to government. In October the Daily Mail quoted Labour MP John Mann saying: 

"'Michael Hintze is the new Godfather of Tory donations. He is putting his money behind the key people in the party very deliberately. People never give money for nothing. They want something in return, they want influence.

"Michael Hintze is a hedge fund boss and where he wants influence is over financial regulation. He does not have to ask Tory Ministers for anything, the act of giving simply changes their behaviour."

But what benefit could a hedge fund manager get from funding a climate skeptic thinktank?

It's seems unlikely it's to pursue a direct financial interest. CQS does have energy companies in its portfolio, and the fund has a specialist energy investments team.  CQS Cayman's website, meanwhile, lists US and international energy groups on the firm's books. But this is hardly surprising for a large hedge fund, and energy doesn't constitute a large part of CQS's business: this investment report, for example, describes CQS as "under-weight" in energy. 

Instead a picture is emerging of Hintze as someone who is in favour of free market policies and is generous with his money when he finds a cause that espouses the same ideals. Another Mail source says: 

" He is an ideologue, albeit one who is politically naive [...]. When someone like-minded asks him to sign a cheque or give office space, he won't hesitate." 

That assessment perhaps puts this article into context. It describes a garden party at the Victoria and Albert museum (also funded by Hintze) to celebrate CQS's 10-year anniversary, at which: 

"Nigel Lawson, a chancellor under Margaret Thatcher, gave a toast in his honor and Liam Fox, the defense minister and a former candidate to lead the party, greeted him with a crushing bear hug."

In a speech at the party, Hintze warned: 

"[T]here was still work to be done [...] especially now that European regulators were trying, in his view, to destroy the London hedge fund business with their increased strictures. 'Remember,' he said, 'without the free market we wouldn't be where we are today'." 

If Hintze has a personal relationship with Lawson and views him as a champion of the free market, it could well follow that he buys Lawson's framing of climate change as an ideological battle for the free market over a subsidies-driven green economy.

Support for climate skeptics from donors such as Hintze and Angest - who also fund wider libertarian or free market causes - probably stems from the view that climate policies constitute overreach on the part of the state. 

So if Hintze is really giving money to the GWPF, 'rich Conservative funds rich Conservative friend' may not be the most interesting story. But when viewed in the context of a wider funding network, united by free market views, it makes a lot of sense.

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