The party’s over

THE ROYAL MILE returns to a semblance of normality this week after the fireworks on Monday to mark the close of the Edinburgh Festival. Walter took refuge on a tartan rug in the cellar for the fireworks. The Festival Fringe fills Parliament Square with people and a performance area right outside the Signet Library. The scene is awash with colour and clamour, thrilling for visitors, less so for those making their way daily to and from work. Walter is not a fan of jugglers shouting their life story. Now it is as if a particularly disorganised invading army has just departed the city, with a few stragglers and an early autumn wind whipping up the detritus. The legal scene around Parliament Square is still muted pending the ceremonial of the Opening of the Winter Session later in September. That will truly bring down the curtain on the summer. 

TIME WAS CALLED on a different kind of party this week. Tech giant Apple was told to pay Ireland euros 13 billion (£11 billion) of back tax that would have been due but for a special tax deal adjudged by the EU to constitute unlawful state aid. Anyone who thought a “Double Irish” was an alcoholic drink now knows that, in fact, it is an exotic tax structure favoured by certain multinationals who seem to regard their economic impact per se as more than enough benefit for any country lucky enough to have them without the demeaning imposition of being taxed at the same rate as lesser beings. The Double Irish is an Apple tax cocktail, mixed with the connivance of the Irish government. The recipe goes like this: (1) mix up and stir all your sales across the EU and elsewhere and decant into a taxable Irish company; (2) reduce the mixture by siphoning off a hefty measure of royalties and fees into a second company deemed to be “stateless” (or, if you prefer, an offshore company in an ever more favourable tax haven); et voila (3) only a shot of taxable concentrate is left in the first company. According to the EU, Apple paid a maximum tax rate of 1% - in 2014 just 0.005% - compared to Ireland’s "normal" corporation tax rate of 12.5%. It is step (2) of the recipe that EU competition commissioner Margarete Vestager says does not correspond to any version of economic reality and that amounts to state aid. Step (1) is untouched by the ruling although many will find its relationship with reality just as unconvincing. 

APPLE CEO TIM COOK is predictably outraged and has instructed City law firm Freshfields on the appeal. In a succession of outbursts Cook disingenously portrays the ruling as retrospective law and an affront to national sovereignty. It is neither. Less predictably, the Irish government is appalled at the prospect of being compelled to receive a sum equal to the entire annual cost of its national health service. In what would be an act of unprecedented national self-denial, the government may appeal the ruling, much to the outrage of Irish tax payers. As if one of the lowest corporation tax rates in the developed world was not incentive enough for inward investment. In a further twist, the US government says the ruling unfairly targets Apple despite its own frustration at Apple hoarding over $200 billion in cash reserves offshore in order to avoid paying US tax. What is genuinely perplexing, and disturbing, is why Apple felt it necessary and legitimate to adopt such an aggressive tax structure in the first place. If a “traditional” manufacturer and retailer had been exposed for doing so, consumers would have deserted it in droves. Apple’s share price hasn’t so much as quivered and it can easily afford the tax. Does the company not want to pay its way in the social orders in which it operates? Or are they so blinded by their own genius and the faux beneficence of their "cool" tech? What Apple sees as legitimate corporate strategy looks to many members of the public like greedy corporate hoarding. This cannot be good for the brand. Nor is their CEO's PR strategy playing well. The EU have followed due process and assess that Apple's tax liability should be more that the corporation (or its advisers) may have thought. Due process has been followed and there's a right of appeal. No corporation should be above the law. The EU's message to the Irish government and other member states is that state-sponsored financial doping is inimical to fair competition. Whichever way the appeal goes, surely the party is over for flagrant and excessive tax avoidance by global brands that depend upon consumer goodwill for success. 

THE PARTY’S ONLY JUST BEGUN on Brexit with the news that EU personnel are up in arms at the news that former EU commissioner Manuel Barroso is to join the US investment bank Goldman Sachs to assist advising clients on Brexit. An online petition, organised by a group of EU officials, denounces Barosso for “irresponsible” and “morally reprehensible” behaviour by taking up the role shortly after the expiry of his gardening leave. They point to Goldman Sach’s involvement in sub-prime mortgage instruments and lending money to Greece before that country’s financial meltdown. The former Portuguese prime minister has certainly been on quite a “journey” ideologically, having allegedly been a Maoist as a student, he has ended up as an ex-EU commissioner advising on Brexit.

CLOSER TO HOME law firms have flirted over the years in the field of lobbying and public affairs. In Edinburgh, where once it was the formation of the Scottish Parliament that provided the spur, now it’s Brexit. That’s certainly the view of Pinsent Masons who this week announced the expansion of its public policy practice by appointing a former head of public affairs within the RBS banking group. Apparently clients are anxious to understand the implications of Brexit. They are not alone. Her Majesty's Government would like to know.

WITH SOME EXCEPTIONS lawyers prefer to stay out of the news and to avoid appointments to the board of their clients’ trading companies. Mike Ashley's trade mark lawyer, formerly head of brands at Sports Direct, is the subject of media attention over his role in the company that makes a profit from organising all Sports Direct’s international deliveries. The company is owned by Ashley’s brother which has raised eyebrows because Sports Direct had not disclosed its contract with the company as a related party transaction. The company says it receive advice that the appointment didn't have to be disclosed. Reports claim that the lawyer was the sole director of the company for six months after its incorporation until the appointment as a director of Ashley's brother, formerly Sports Directs’ head of IT. The latest story has fed into reports of shareholder unease about corporate governance at Sports Direct in the wake of allegations about the treatment of agency employees at its warehouse and retail operations. Those allegations resulted in Ashley’s memorable appearance before the House of Commons’ business and innovation select committee. There is no suggestion of any wrongdoing by anyone.

AS THE US PRESIDENTIAL ELECTIONS election moves towards the first debates between Hilary Clinton and Donald Trump later this month, events surrounding an earlier race for the White House are the subject of the film Truth (available now on streaming services).  Starring Cate Blanchett as Mary Mapes, a CBS 60 Minutes producer, and Robert Redford as legendary anchorman Dan Rather, the true-life drama focuses on an event that, whilst notorious in the US, is less well known in the UK.  With President George W Bush seeking re-election in 2004 many American news outlets were investigating the question of how the president avoided the draft in Vietnam. Documents made available to CBS appeared to provide a smoking gun: when the veracity of these military papers is called into question, the journalists are left examining fonts, kerning and typewriter evolution in an attempt to salvage their careers and reputations. Needless to say, lawyers are soon involved.

ANOTHER REAL-LIFE STORY is the subject of Serial the podcast which, as of June 2016, has been downloaded more than 100 million times. Journalist and presenter of the radio program This American Life, Sarah Koenig, investigated the 1999 murder of Hae Min Lee, an 18 year old high school student in Baltimore, and the conviction of Adnan Syed, her former boyfriend, who was found guilty of the crime and given a life sentence. Syed had always protested his innocence and there were questions about the performance of his lawyer, Christina Gutierrez, who was subsequently disbarred (with consent) in 2001 partly due to health complaints related to the effects of multiple sclerosis, the disease which eventually killed her in 2004. With the case now back in the news as a direct result of the Serial podcast, the programme is a riveting look at the US justice system.

YESTERDAY EVENING at the Signet Library a gathering of writers and football followers joined well known faces Stuart Cosgrove, Ian Rankin and others for the launch of Nutmeg, a quarterly periodical devoted to Scottish football. The venture is a celebration of the printed word and good writing. The first edition is stylishly designed and produced and a pleasure to hold and turn the pages. It was a terrific event, much enjoyed the company as evident from activity on Twitter. The WS Society is pleased to support Nutmeg and wishes editor Ally Palmer and the editorial team every success.

— “Writer”

Writer's Week is not intended to represent the views of the WS Society or its members.