Conservative MP Nadhim Zahawi was briefly famed last week when it became known that he attended the now-infamous men-only charity dinner for some of the country’s wealthiest CEOs, with predictably less than savoury mid-course entertainment. Dodging the attendant hostesses, our Iraqi-born Children’s Minister Zahawi scuttled for the door, to be met the following day with a dressing down from Prime Minister Theresa May and the party whips’ office.
Third in the disciplinary line-up should have been the unfortunate investors in a Kurdish oil firm called Gulf Keystone Petroleum, from which Zahawi stepped down as Chief Strategy Officer earlier this month. His chief strategy at Gulf Keystone appears to have been facilitating one of the most apocalyptic share price plunges in oil industry history. The investor website Motley Fool has called Keystone “one of the great oil disaster stories for investors of recent years.” At one stage, the Serious Fraud Office was contemplating an investigation into the stricken Iraqi firm as its performance plunged. Naturally all principals within the company deny any wrongdoing.
To put these commercial misfortunes in perspective, Zahawi – while a serving MP — joined the firm in July 2015, when the share price was hovering at £35.30p per share. Upon his departure it was worth just £1.29. Tens of thousands of investors, many of whom were of “individuals of modest means”, according to one consumer finance website, lost millions. The same website contrasted the enormous salaries paid to Zahawi and other executives with how, since 2012, the firm had lost 99 per cent of its value, while ratcheting-up debt. “I don’t know how you would describe the situation of investing in what you believed to be a fair market,” said one disgruntled investor in late 2016, “only to have your pocket picked by moneyed thieves with the wherewithal to do it.”
In fairness, much of the fall preceding Zahawi’s arrival was thanks to the temporary grip that Daesh exerted on Iraq’s autonomous Kurdistan region, which was only wrested away late last year. The shares were in descent even before then, though, and a disastrous business decision to swap equity-for-debt, made under his tenure on the say-so of other top executives, did not help matters. Zahawi denies having a hand in many of the key decisions, which begs the question as to why, if that was the case, he was worth paying nearly a million pounds in salary, bonus and other fees.
The answer, of course, was his political connections both in Britain and in his native Iraq. The board was attracted initially by what Intelligence Online called Zahawi’s role as the “go-to consultant for access to the Barzani clan” (which controls Iraqi Kurdistan) and he was known for his access to the regional government’s Economy Minister, Ashti Hawrami.
The reasons he was appointed to this Middle Eastern firm go right to the heart of the complicated businessman-cum-diplomat-cum-politician role that Zahawi has carved for himself in recent years. He is just one of several examples where the business interests of Conservative politicians in the Middle East have often overlapped with diplomacy, muddying the waters between where an individual’s commercial interests end and national interests begin.
From a Kurdish point of view, Zahawi was hired to navigate the labyrinthine world of Kurdish politics. Meanwhile, in London, he sat on the influential Foreign Affairs Select Committee, and was able to entice Foreign Secretary Boris Johnson, to visit Kurdistan and show his support for the Kurdish position in general. Of course, this was not a bad diplomatic move in itself, but it is unnerving to see emails from within the Foreign Office saying that the trip had been “cooked up”, in the words of one diplomat, by Zahawi alone, to an area of the world in which he was so heavily invested personally.
What he was paid has been staggering, and it is all laid out brazenly in the Parliamentary declaration of interests. The latest version of this document shows that Zahawi’s employment lasted between 15 July 2015 and 12 December 2017, when he was employed by Gulf Keystone Petroleum. He was required to work between eight and twenty-one hours per week, for which he was paid up to £29,600 per month. A year ago he received a bonus payment – what for? you might reasonably ask – of £253,200. Last month, he received an additional payoff of £155,936.
What has Zahawi got out of it? Nearing a million pounds and the opportunity to strengthen his political capital in Westminster. What has anyone else got out of it? Nearly nothing. Remember this the next time a politician tells us that, “We’re all in this together.”
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.