It is 19 June 2010. The time is 3:51 pm. Crown Princess Victoria and Prince Daniel say “yes” to each other, for better or worse. The church is filled with dignitaries, and the public interest is enormous. Thousands of journalists are present to report the event, and after the wedding ceremony, close to half a million people crowd the streets of Stockholm to celebrate with the bride and groom.
The tension has been tremendous, and the stakes are high. The wedding is very important for the royal family, which has been suffering from falling confidence among the Swedish people for a long time. But when the couple sneak out from the party via the back door in the wee hours of the morning, it is clear: the wedding has been a great success.
The honeymoon has begun. At Arlanda, an exclusive private jet is waiting. Once on board, the royal couple can take a breather; the long wedding day is over. This, however, is only where our story begins.
Private jet in the Paradise Papers
Among the many millions of documents in the Paradise Papers leak, Uppdrag granskning [Mission: Investigate] comes across one with information about a private jet with the registration number VP-BEH. This is the same airplane which took the princess and her new husband, in the summer of 2010, to their honeymoon in French Polynesia in the Pacific Ocean.
According to the document, the airplane is registered to a letterbox company in the tax haven of Bermuda, one which is owned by another letterbox company – which in turn owns a complex network of companies, protected by the anonymity and confidentiality of the tax haven.
How did the Crown Princess Victoria find herself on an airplane registered in Bermuda?
The answer is spelled Bertil Hult.
The super entrepreneur
Bertil Hult is the super entrepreneur who started out selling clothes from Eastern Europe to tourists in Skåne. Later in the mid-1960s he built up the language empire EF – Education First. According to the company, it now has business operations in 116 countries with over 40,000 employees.
He is an unknown, a mystery person who rarely grants interviews. As one of the richest people in the world, according to available information worth well over SEK 35 billion, Bertil Hult is famous for his grand parties with hired guests such as Janet Jackson, Elton John and Rod Stewart. And his luxury yachts and exclusive jet planes.
Among those who Bertil Hult counts as his close friends are members of the Swedish royal family.
”Not information that we are aware of”
However, the fact that the luxury airplane that the Crown Princess boarded is registered to a letterbox company based in the tax haven of Bermuda is nothing that the Royal Court of Sweden is aware of, according to its Director of the Information and Press Department, Margaretha Thorgren.
“That is not information that we are aware of, not at all.”
In the search for answers, we instead end up in Lucerne, Switzerland, where Hult’s company EF has its headquarters.
It turns out that Bertil Hult uses two jet planes. According to information we have found, they are flown by a total of eight pilots, all of whom are Swedes and residents of Lucerne. In the course of our search for them, we find ourselves at Morgartenstrasse 3 in Lucerne, where seven of them live and pay taxes – significantly lower taxes than they would have had to pay in Sweden.
Activities have been charted
But there is something that doesn’t seem to add up; they all live in two apartments. We get into contact with one of the pilots, by telephone.
Don’t you think one might find it a bit odd that seven middle-aged men live and work together?
“Nope, I don’t really think that this is strange or surprising at all, as we work with each other. We travel a great deal, really a lot. “
But when Uppdrag granskning [Mission: Investigate] takes a closer look at the pilots, we find seven investigations underway at the Swedish Tax Agency, one for each person. The pilots’ activities have been charted. They buy food at Coop and ICA, borrow money from Swedish banks, are buying homes and having children in Sweden. The Swedish Tax Agency’s conclusion: They quite simply do not reside in Switzerland.
Now, each one of them has a file in a tax case and will be paying Swedish taxes and tax penalties of millions of kronor – per person.
Appleby in the leak
When Uppdrag granskning [Mission: Investigate] tracks down the jet aircraft that Bertil Hult lent to the Crown Princess, we end up on 22 Victoria Street, in the tax haven of Bermuda. It is not Bertil Hult who lives here, nor does his EF Group have an office here. Instead, we find the offshore law firm Appleby, whose internal documents form the basis of the Paradise Papers leak.
It turns out that Bertil Hult has been, for a long time, a client of Appleby. If one maps out the wealthy Swede and his company EF, one ends up with a long list of companies around the world where the normal business activities are operated. But with the benefit of the Paradise Papers leak, an alternative corporate structure is now revealed.
This involves more than 25 companies in various different tax havens, primarily in Bermuda. The structure is essentially secret, impossible to see unless one has access to the internal documents. But with them, one can read how company after company received guarantees of complete exemption from tax.
Eight hundred and thirteen airplanes
Bertil Hult is not alone in registering aircraft in Bermuda. Eight hundred and thirteen airplanes are registered on the island. That so many aircraft are attracted here is a fairly simple equation – the advantages are many. As summarised by Appleby itself:
“Owners and operators may be in a position to take advantage of favourable tax treatment in their principal place of business from registering aircraft in Bermuda. There is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate or inheritance tax payable by a Bermuda company or its shareholders ordinarily resident in Bermuda.”
Via registering one’s company there, one avoids transparency and tax obligations.
The airplane is not the only surprise in Bertil Hult’s wedding gift. Namely, on the small South Pacific island of Bora Bora awaits his luxury yacht, the 52-metre-long Erica XII with its crew. The yacht too is not directly owned by Hult nor the company EF. Using the Paradise Papers leak, we can trace it to a Bermuda letterbox company, and from there to another in Malta.
We also travel there to get some answers, but when those sent by SVT arrive at the address for the letterbox company, the trail goes cold.
Criticism of the trip
When the Crown Princess and Prince Daniel land at Bromma Airport on 1 August 2010, the honeymoon is over, on several levels. Criticism of the trip is growing fast. One of the newspapers reporting it is the daily Dagens Nyheter.
The essence of the criticism according to editor-in-chief Peter Wolodarski, was that they had received a “gift” from Bertil Hult worth well over one million kronor.
“The Swedish royal family, they act as door openers, so they are good for his business. And simply only the suspicion that there are services and reciprocity with favours in return, in this particular case a gift that is worth so much money, makes it inappropriate, and raises the question of if we are actually talking about corruption here.” And a future head of state should stay far away from something like this.
Several police complaints have been filed, where the suspicions concern corruption; however, no preliminary investigation will be made, due to the fact that according to the public prosecutor, the Crown Princess is exempt from the legislation concerning bribery.
“The decision is consistent with the assessment of the Royal Court Auditor, and the case has been resolved, which is satisfactory,” so states the former communications head at the Royal Court, Nina Eldh.
”You don’t question things”
During his entire career, Bertil Hult has avoided talking about how his companies are structured. But the documents Uppdrag granskning [Mission: Investigate] have gained access to paint a more detailed picture. They reveal how money is moved from EF’s transparent business activities to anonymous companies in tax havens. The letterbox companies are given the right to invoice for royalties, service contracts and licenses, among other things – which reduces profits, and thus the taxes, within the Group.
Uppdrag granskning [Mission: Investigate] contacts with some 20 Swedes who are working or have worked for Hult’s companies in tax havens. Many do not want to talk. But a handful of people choose to speak to us anonymously:
“I think many people are aware that this was aggressive tax planning. But it’s not something you talk about, nothing about the company … it is in the walls, you don’t question things.”
“They don’t want people here to know how big the company is, or how much money the company makes. All this has to be kept secret.”
“Everyone is well aware of the fact that the company seeks to pay as little tax as possible. Is it tax planning? Or is it tax evasion? It is not really for me to say or judge.”
”An extremely complicated set-up”
Torsten Fensby is one of Sweden’s most experienced experts in the field of tax evasion. He is given the opportunity to look at the documents, and it is not the first time he has seen a similar set-up. The purpose is quite simple, he says. To reduce the taxes as close to zero as possible. But it does not necessarily have to be illegal.
“It is an extremely complicated set-up, which means that one circumvents a variety of different rules in different countries; that is what one exploits. One plays the tax systems against each other; you trick or deceive in different ways, which in the end means that you don’t pay any taxes at all, with the exception of a little nominal taxation here and there. “
Is this an aggressive tax planning?
“Yes, it is very clear that it’s an aggressive tax planning.”
Doesn't talk about the structure
We asked EF for an interview with Bertil Hult several times, or with anyone else in the management who has been responsible for the financial set-up and arrangements. The response is always the same. They respond to questions via e-mail or via a spokesperson in the United States.
When we visit the heart of Hult’s Group, the headquarters in German-speaking Lucerne, we are once again met with the same response.
There will be no interview, this time either. However, we find an interview in the SVT archives, where the media-shy Bertil Hult comments on his business model, and answers the question why he hasn’t listed the company on an exchange and in this way become more transparent.
“I can’t see any upside for us in telling people about our structure and what we sell for and what we earn. We do not see that this can be of benefit to us in any way. On the other hand, we do see that it may be a disadvantage for us, and thus it is better not to talk about this.”
”Has nothing to do with the Royal Court”
However, we certainly can ask questions of the Royal Court, even if the Crown Princess herself won’t appear for an interview. Director of the Information and Press Department at the Royal Court of Sweden, Margaretha Thorgren, says:
“I think it’s good that you investigate people and their economic doings, absolutely. But this question has nothing to do with the Royal Court. Bertil Hult is a good and private friend of the royal family and therefore there has been no reason to investigate a private friend.”
With what you know today, would you have done it differently?
”It's a question one can ask but again, it's a good friend and to use good friends' transportation, there is nothing strange about that.”
The question is whether the royal family drew any conclusions after the storm of criticism that appeared after the Crown Princess’s honeymoon trip. It does not seem so. The mapping out that Uppdrag granskning [Mission: Investigate] conducted, the Royal Court confirmed, reveals that the Swedish royal family continued to travel on Bertil Hult’s private jets.
The Queen did so in 2013, to Kuwait; the King himself went to St. Petersburg in 2013 and to Lisbon in 2015. And as recently as this past summer, the King and Queen allowed themselves to be invited for a trip on the same airplane to a party held by Hult in Moscow.
After the interview the Royal Court announces that the royal couple had intended to pay one of the journeys, the one to Moscow in June 2017, but that they have not received an invoice yet.
Doesn't indicate criminal activity
Bertil Hult’s Falcon 7X with the registration number VP-BEH was deregistered from Bermuda’s registry on 16 October of this year. Hult is said to have a new airplane now. This time registered in Denmark.
EF writes in an e-mail to Uppdrag granskning [Mission: Investigate] that Hult’s yacht and airplane had not been registered in Bermuda for reasons related to tax, that Hult paid for all the trips he made privately, and that it was taxed according to the applicable rules in effect.
”Our worldwide structure reflects the activities which take place in the various countries where we are present, and the structure is not set up to “avoid tax” as you speculate.”
How much money Hult and EF have saved because of the setup in tax havens can not be said. The confidentiality of the companies in Bermuda is almost total. There is nothing in the investigation that indicates criminal activity.