Monday, 27 March 2017
Last updated 2 days ago
Jan 10 2012 | 11:27am ET
Lansdowne Partners founder Paul Ruddock was "surprised" by the uproar his receipt of a knighthood caused, and warned that it will make philanthropists think twice about giving generously.
It is believed that Sir Paul can now be so called because he has donated millions to arts organizations. But the U.K.'s honors committee does not reveal why people have been honored or what persons or organizations nominated them, leading to speculation that Ruddock was rewarded for his generosity not to the arts community, but to the governing Conservative Party.
"It caught me a bit by surprise," Ruddock told The Telegraph of the controversy. "I had been so involved in arts and education for 20 years, and my charitable donations are tens of times what I have given to the Tory Party—in the tens of millions. Also, the idea that I would have any influence over the government, except in my role as [Victoria & Albert Museum] chairman, is ridiculous."
"I believe fully that this honor has been awarded to me because I have hopefully made some difference in terms of improving the cultural life of this country," he added.
In addition to his contributions to the Tories, newspapers and the opposition Labour Party took aim at Lansdowne's short investments in Northern Rock the year prior to its collapse and nationalization.
Claims that he earned £100 million by shorting Northern Rock are "absolutely ridiculous," Ruddock said. "The numbers quoted that the firm made are high, and I make a small fraction of that money. We have 18 partners and I am not one of the investment partners. So I did not take the decision to invest in Northern Rock, but obviously as co-founder and CEO of the firm I bear responsibility."
Which is not to say that he's apologizing: "As far as Lansdowne is concerned, we did not create the problems at Northern Rock, we were not the management that made profligate, poorly-funded loans and exploded their balance sheet to a level that was unsustainable. We were not the regulatory agencies that failed to spot these huge problems despite investment management firms like ourselves holding short positions in these institutions several years before the problems really became dire."
Ruddock said that, in the future, problems such as his should be avoided by making the honors system more transparent, including explanations of why an individual is being honored and a list of the people or organizations that proposed the honor.
"I think that in my case that would certainly have been very helpful," he said.
"Clearly, this type of publicity, I suspect, would make many people shy away from being as generous to institutions financially because of a fear that it backfires."