Posts tagged "US"

Facebook IPO: the key players and what they are worth

Mark Zuckerberg isn’t the only one who stands to gain big on Friday. Here are the other early adopters with a piece of the pie

Mark Zuckerberg, 28

Friday is probably the biggest day of Zuckerberg’s career since he launched what was then The Facebook at Harvard in February 2004. Facebook has gone on to be a global phenomena, a Silicon Valley legend and even an Oscar-winning movie. Zuckerberg’s co-founders have fallen by the wayside (and into piles of cash), and today he rules over the empire as chief executive officer and the firm’s largest shareholder. When the company goes public Zuckerberg will face new levels of pressures and scrutiny. Only time will tell if he’s the new Bill Gates or the next Jerry Yang.

Wealth-X, a consultancy that specialises in high networth individuals, estimates his net pre-IPO fortune at $18.95bn. When, and if, Facebook’s shares take off Friday, expect that number to soar. Some are expecting it to double, catapulting the already astronomically wealthy Zuckerberg into the very top tier of the super wealthy.

The co-founders

Dustin Moskovitz, 27

Moskovitz co-founded Facebook with Zuckerberg and moved to Palo Alto with the Facebook boss in 2004. He left Facebook in 2008 to form a new software company, Asana, with Justin Rosenstein, an engineering manager at Facebook. Asana develops software applications Moskovitz hopes “will be to your work life what Facebook.com is to your social life”.

Wealth-X pegs his pre-IPO wealth at $4.8bn, and he holds a 7.5% stake
in Facebook.

Eduardo Saverin, 30

The Brazilian-born co-founder originally served as Facebook’s chief financial officer and business manager. After a prolonged dispute with Zuckerberg, his 34.4% stake in Facebook was diluted to 5%. He reportedly sold much of his stake in the company in private transactions, raising money to invest in various technology start-ups including Qwiki and Jumio. The terms of his legal settlement with Facebook were undisclosed, and he is not listed among the company’s major stakeholders; his current holdings in Facebook are unclear.

Saverin spends most of his time in Singapore, and it recently emerged he has given up his US citizenship, though he has now insisted that this is not a tax avoiding move and he will pay the estimated $39m in US taxes on his windfall from the IPO.

Wealth-X estimates Saverin’s net worth is at least $ 2.7bn

Chris Hughes, 28

The final co-founder has reinvented himself as a media savvy political operator. Hughes clearly has an eye for rising stars. In early 2007, he left Facebook to work in Chicago on the then-senator Barack Obama’s new-media campaign. In March this year Hughes became the owner of The New Republic, the venerable liberal-leaning politics and art magazine. It’s not clear what his Facebook holding is worth, but it’s believed to be under 1%.

The mentor

Sean Parker, 33

Parker was still a teenager when he co-founded Napster, the music sharing service that sparked a revolution. He spotted Facebook’s potential early and was a mentor to Zuckerberg, becoming the social network’s founding president, helping attract investors.

Wealth-X pegs his pre-IPO at $2.5bn, including a 3.9% stake in Facebook.

The boss

Sheryl K Sandberg, 42

A powerhouse professional who is increasingly becoming the grown-up face of Facebook. Sandberg has stints at the US treasury, Google and McKinsey on her resume and recently held a fundraising dinner at her home for Obama. She is late to the Facebook party, having joined in 2008, but her 0.1% holding in the company already puts her net worth at over $69m.

The investors

Reid Hoffman, 44

Hoffman is a serial fortune maker worth over $2.35bn, according to Wealth-X. He counts PayPal and professional networking website LinkedIn among his greatest hits and is a partner at Greylock Partners, one of Silicon Valley’s top venture capital firms. An early investor in Facebook, he is believed to retain a 0.2%.

Marc L Andreessen, 40

Another Silicon Valley legend, Andreessen was co-author of Mosaic, the first widely used web browser, and co-founder of Netscape Communications, whose 2005 IPO was seen as the starting gun for the last dotcom boom. Andreessen-Horowitz, his venture capital firm, counts Foursquare, Groupon, Skype and Zynga among its investments as well as Facebook.

Peter A Thiel, 44

The former CEO and co-founder of PayPal was an early investor in Facebook and currently sits on the company’s board. A libertarian philanthropist, Thiel is widely seen as one of the smartest men in Silicon Valley.

Wealth-X estimates his wealth at $1.45bn.

Elevation Partners

Bono, 52, is very keen not to see Beautiful Day headlines when Facebook’s shares go public. The U2 front man is a partner in the media and tech investment group that owns 2.2% of Facebook. His PR people went on the offensive before the IPO to point out that the firm invests for other people, not just its partners, and any winnings would be widely distributed.

Eduardo Saverin’s tax-free global citizenship | Dan Gillmor

Must we tolerate this new global elite of the super-rich and mega-corporations dodging tax obligations in any one country?

Eduardo Saverin imagines himself a “citizen of the world”. His is an unofficial description, but one that an elite class of super-rich people and multinational companies increasingly take for granted.

Saverin’s name stood out when the US government published its latest list of Americans who had renounced their citizenship. He is the co-founder of Facebook, owner of about 4% of the company; and with this week’s public offering of shares, he is about to move from rich to super-rich.

But apparently, not sufficiently rich. Despite his claim to the New York Times – an example of PR backfilling if ever there was one – it’s blatantly obvious that taxes were deeply implicated in Saverin’s move, which took place last year, but has only now been publicized.

He’s apparently paid some taxes on his windfall, based on a Facebook valuation from 2011 that is certainly much lower than the IPO price will be Friday; if he’d stayed in the US and sold shares after the IPO, he’d be required to pay capital gains taxes on the value at the time of the sale, which, based on prior speculation, is likely to be much higher than the offering price.

Now, he’s home free, because in Singapore, where he’s spent much of his time during the past several years, there are no capital gains taxes.

Perhaps the difference in capital gains and other taxes amounts to a mere $100m, as the Times suggested, or $600m – the latter based on the likely value of his shares this week (and on an assumption that he’d sell them at once). To almost everyone, this is real money, even to someone who stands to have wealth in excess of $4bn.

Saverin’s self-serving move has drawn the contempt it deserves from a number of commentators, though much of the criticism has been inaccurate in some details. Farhad Manjoo’s blog post, entitled “What Eduardo Saverin Owes America (Hint: Nearly Everything)”, is one such blast against the Brazilian native who now professes allegiance, sort of, to Singapore. Manjoo pointed out that Saverin would almost certainly be a nonentity had it not been for what he gained after his family’s move to the US from his native land. Naturally, meanwhile, this new monument to selfishness is a hero to the crowd that loathes taxes in general, but especially progressive taxation.

Saverin’s case should be seen in context. Tax havens are not new. The super-rich have been relocating for decades. Increasingly, however, these people and any number of corporate entities are making it plain that they now belong to a new elite: a global class whose only serious obligation is to its own interests. And as beggar-thy-neighbor economic policies spread, these nomads can always find regimes that will cater to them.

So, it is not remotely surprising that Apple, the most valuable company on the planet, is also a world-class tax avoider, as the New York Times reported recently. Apple is far from alone in using multinational operations and a variety of corporate fronts to reduce the taxes it pays, especially at home. But its strategies lend a certain hollowness to one of its slogans – that its products are proudly “Designed by Apple in California”, even if they’re built in China. Like so many other global enterprises, Apple spends millions on lawyers and accountants whose sole job is to use various nations’ laws as gears in their own financial engines.

It’s pointless to suggest to the Apples and Severins of our world that they would never have achieved such heights of prosperity had it not been for, among many other things, America’s economic and legal systems (among other benefits they’ve enjoyed). Contrary to conservative dogma, the US has nurtured wealth creation. And our government, despite many misguided policies (including some tax policies), goes to extraordinary lengths to take care of the interests of the top 1% of the 1%. But why should the Apples and Severins care, when as “global citizens”, they can work the system and get more of what they want?

Perhaps the rest of us should care. Not because these people and companies lack even a shred of loyalty to the nations that helped make them what they are. We should care because the rest of us, ultimately, bear the tax burdens the new global elite shirks.

There’s no easy way to do anything about this. But we should ask ourselves whether we’re satisfied with a world where the global elite enjoys its special perks as it pursues wealth and power, but makes everyone else foot the bill.

Online savings bank promises ‘real alternative to high street’

GE Capital Direct – backed by General Electric – launches with easy-access savings rates of 2.65% and 2.35%

A new UK-based online savings bank has opened for business, and is positioning itself as offering “a real alternative to the high-street banks”.

GE Capital Direct, which is part of GE Capital, a leading provider of finance to UK firms, has launched with two easy-access accounts paying 2.65% and 2.35%.

GE Capital’s long history of lending to UK companies has prompted the new operation to claim that “when you bank with us, you are saving with a proud supporter of British business”. It also hopes the UK public will be reassured by the fact that it is ultimately backed by the US multinational General Electric.

“GE is one of the largest global brands out there,” said Sheragh Beirne, the bank’s managing director, who added that people had become “very dissatisfied” with many of the traditional banks and building societies.

The bank will be internet-based, with a UK customer service team available on the phone, and is a member of the Financial Services Compensation Scheme (FSCS). It is initially offering two “simple and straightforward” accounts for those who can deposit at least £500.

The GE Saver will pays a variable 2.35% gross, while the GE Bonus Saver will pay 2.65%. The 2.65% rate is boosted by a fixed 1.15% bonus for the first 12 months. Both accounts offer unlimited withdrawals.

However, these rates are unlikely to propel the bank into the savings best-buy tables, as there are other easy-access accounts paying more than 2.65%. Aldemore, for example, pays 2.75% on its easy access account, although you will need to have £1,000 to invest.

GE Capital is a major commercial finance provider in the UK, with operations in asset-based lending, fleet, leasing and healthcare financial services, while GE is one of the largest firms in the US.

What does the eurozone crisis mean for your holiday?

As Greece’s exit from the eurozone becomes more probable, we look at what it means for your travel plans

You are about to go on holiday, your bags are packed and the children at the front door waiting to leave for the airport. Then you hear that the country you are departing for has crashed out of the eurozone.

Some experts think this scenario is highly likely, predicting a 75% probability of Greece exiting the euro within the next 18 months. We asked travel expert Bob Atkinson of Travelsupermarket.com what this could mean for your holiday.

Will I still be able to go on holiday?

Yes, unless the airspace and all the hotels are closed. The issue will be around how your tour operator interacts with the hoteliers in Greece, and what the terms of their contracts say. They should all have plans in place that will allow you to continue with your holiday.

Will I have to pay any more for the trip?

Possibly. If you have booked an Atol-backed package the tour operator has to absorb any extra costs – be they transportation costs, taxes or anything else that pushes up the price – worth up to 2% of the value of your holiday. It also has to absorb all increases if you are due to depart within 30 days of the cost arising.

But if the increase is between 2% and 10% of the holiday’s value, and occurs more than 30 days before you leave, it can pass the cost on to you. If the rise is more than 10% of the cost of your holiday the operator must offer you the option of paying the extra, switching to a different holiday or having a full refund.

If you have booked the different parts of your holiday independently and are not covered by Atol you will have to stump up any difference in price yourself.

What happens if the accommodation I booked has gone bust?

Again, if you have booked an Atol-covered package your tour operator is obliged to organise alternative accommodation, or if there is no immediate alternative a holiday on a different date or a full refund.

If you have booked independently you may still be covered provided you paid by credit card and the deposit was £100 or more, you paid by Visa or Mastercard debit card (and can do a charge back), or have travel insurance which includes end supplier failure in its cover.

What do I do about spending money?

Even when the decision is made for a country to drop out of the euro, it will take some time for it to be put into practice. Euros could continue to be accepted as legal tender for several weeks, but their value may be different to that in other eurozone countries.

Many people are considering buying euros now because the exchange rate against sterling has dropped to a three-and-a-half-year low. However, if you have booked to go to Greece it may be worth holding off until the last minute: if the country does drop out of the euro it may be that Greek retailers prefer to trade in US dollars or sterling.

Unless the whole banking system goes into meltdown you are also likely to be able to use credit and debit cards, although it’s impossible to say which currency your transactions will be made in until it actually happens.

What happens if Greece goes on strike?

You can buy travel insurance which includes cover against costs incurred if there is a strike, but for this to be valid you must buy it before a strike is announced.

If your travel insurance does not include strike cover and the strike starts while you are on holiday, how you fare will depend on the type of holiday you have booked. Atol-protected customers will be completely covered, but if you have booked independently it will depend on your airline as to whether you receive any help. Good luck to those who book with Ryanair.

I have a holiday home. What does this mean for me?

The same currency exchange movement that has made it favourable for Brits to buy euros has made it costly to sell eurozone holiday homes: at the beginning of the year you could expect to get 83.5p for your euro, but this is now only worth 79.8p, says the retail foreign exchange broker Forex Club. If you can sell at all, that is.

The value of property in Greece has plummeted, with one estate agent, Nightingales, saying prices have dropped by 25% on some properties as a result of the ongoing economic and political crisis. If you have been renting out your property and keep a balance in a Greek bank account, this is also likely to lose value if Greece drops out of the euro.

However, some owners are prosaic about the crisis. One who prefers to remain anonymous says: “I’ve never regarded the property as an investment – it’s a home where the family can spend time together.”

His view is that the crisis will pass. In the meantime there are plenty of good opportunities for any cash-rich Brits on the look out for an island idyll.

Incoming search terms:

• if greece leaves euro what will happen if u booked holiday
• if Greece drops out of euro will holiday prices fall
• will i still be able to go on holiday euro
• will you still be able to holiday in greece if the coutry exits the euro

Davis attacks plan for secret courts

Former shadow home secretary says government’s argument ‘blown out of water’ following US leak about British double agent

The government’s central argument for the creation of new generation of secret courts has been “blown out of the water” by the leak of highly sensitive British intelligence in the US, according to former shadow home secretary David Davis.

Ministers are stepping up plans to expand secret hearings into civil courts at the behest of MI5 and MI6, amid concerns that the US authorities will cut off the flow of intelligence if details emerge in open court.

But in a Guardian article, Davis calls on ministers to face down the demands after details were leaked in the US about a British double agent instructed by al-Qaida in the Arabian Peninsula to blow up an aeroplane with a highly sophisticated underpants bomb.

“This argument has been blown out of the water by last week’s disclosures, which demonstrate that the American system leaks far more than the British ever could,” Davis writes. “This leak happened not in the pursuit of justice but as a casually irresponsible piece of political spin.”

Ministers have been under fire from civil liberty groups over plans to allow some material to be concealed from the public, the media and claimants during civil trials. The proposals are a response to the public airing of evidence during litigation brought on behalf of Binyam Mohamed and other former detainees in Guantánamo Bay.

The deputy prime minister, Nick Clegg, raised concerns about the plans in a letter to ministers on the national security council. Clegg said the courts should only be used in exceptional cases where there are national security concerns.

In the Queen’s speech last week, the government announced an acceleration of the plans when it said that they would be included in a justice and security bill. The so-called “material procedures” would allow sensitive material to be heard in court in front of approved special advocates.

Davis argues that the arguments in favour of the secret courts are based on a “falsehood” – that intelligence remains secret in the US. He quotes Mark Fallon, the deputy commander of the Guantánamo military interrogation team, who said: “In the US there are no secrets, only delayed disclosure.”

Davis writes: “In the coming year, the government, at the behest of the intelligence agencies, is going to ask us to introduce a secret procedure into our civil courts for the first time in our history. It will allow the covering up of crimes – such as complicity in torture – that may have been carried out in our name. It is being justified as a way of protecting secrets from a country that makes a virtue of being even more open than we are, and which as a result lets slip more classified data in a day than our courts do in a decade.

“It is being argued on the assumption that our allies are naive, and are willing to compromise the fundamental values of our justice system in a war that is supposed to be in defence of those very values. None of these arguments stand, and so this proposal should fall.”

Letters: Should Greece stay or should it go?

When its policies are under threat, Europe’s elite always try to frighten people into compliance, but it’s impossible to say that the consequences for Britain if the euro falls apart are worse than those arising from a long struggle to make the unworkable work (We agree about Europe, 14 May). The latter will demand British contributions to sustain a project we didn’t join and advised against, and if the uncompetitive Mediterranean countries can’t devalue they’ll suffer long and hard deflation. So will Germany, because its Euro markets will decline, and a failing European economy will drag the world down with it.

Breaking out to a more competitive exchange rate will be tough but creates the opportunity for growth, and once some or all of the Club Med states go the euro will rise, making Germany less competitive and stopping its excessive surpluses. That offers a much better prospect of growth and revival than any big EU infrastructure projects, which will take years, or an expanded European investment bank pouring our money down European black holes.

As for structural reforms, they are much easier when economies grow than in prolonged deflation, which despairing electorates won’t accept. Euro guff won’t bring growth, and it’s silly to say we’ll be locked out. If the EU is heading obstinately to self-inflicted disaster, locked out is the best place to be.
Austin Mitchell MP
Labour, Great Grimsby

• Ed Balls and Peter Mandelson are right, the UK should take a central role in ensuring a future of sustainable growth for the EU, with the funding of infrastructure being centre-stage. The crucial question is what kind of infrastructure. To make Europe’s future a “sustainable” one in an environmental sense will mean rejecting the usual old vanity projects of motorways, airports and high-speed trains. A really job-generating but green infrastructure programme would make all buildings energy-efficient, massively reduce use of raw materials through reuse and recycling, and improve regional transport networks. All this could generate jobs and business opportunities where people live, rejuvenate local economies and so eventually reduce public debt. If François Hollande and the Greeks’ Syriza alliance also call for a shift from austerity to greener prosperity, this could at last result in the replacement of the sado-monetarist lunatics in charge of the EU asylum.
Colin Hines
Convener, Green New Deal Group

• £130bn to rescue Greece (Europe’s elite braced for Greece exit, 15 May)? Scandalous! Yet this country alone has spent 10 times that amount to save the private banks, with no questions asked, and very little of that money is likely to be recovered. Have the banks had austerity measures imposed on them, or any measures at all? Am I missing something, or has the world gone completely barmy?
Gerard Ledger
Oxford

• Keynes understood that if you have a currency union you need a mechanism to sort out imbalances, transferring resources from creditors to debtors, otherwise the strain on debtor nations of being part of the union will become intolerable. That was the point of his scheme for an International Clearing Union, launched in 1943 and intended to be a global bank, working on the overdraft principle, so that all those nation-states needing dollars for reconstruction after the war would be able to get their hands on them. And they would run down the overdrafts by selling what they had made to the US and to each other – in other words, via growth. There is no other way.

In the end the ICU never took off – but the US provided aid after 1945 via the UN, loans to the UK and France, Marshall Aid, the Military Assistance Programme, the IMF, funds for development and private foreign investment by multinationals. It took the cold war to galvanise the US to play the part of generous creditor in the global economy, underpinning a generation of unprecedented expansion. On the other hand, the German government and its friends in Brussels and Frankfurt have by their addiction to rules (ordoliberalism gone mad) turned the euro into an economic doomsday machine, and short of a U-turn on their part the only escape is for debtors to abandon it.
Professor Scott Newton
Cardiff University

• Ed Balls and Peter Mandelson make some sound points such as the European Investment Bank funding infrastructure investments to recover growth, but are wrong in claiming that “at the heart of Europe’s problems is the fact that the eurozone does not have the institutions or political machinery to project confidence”.

It does. The European Central Bank is obliged to support the general economic policies of the union, as defined by heads of state and government. It must do so without prejudice to the internal and external stability of the currency, but defending the internal stability of the eurozone is such a policy. It could be aided by shifting a share of national debt to the EU, not least since while member states are deep in debt after salvaging banks, the EU itself had none until May 2010 when the ECB started to buy out public and private sector debt.

There are constraints on EIB co-finance because of the crisis, but these can be offset by Eurobonds issued by the European Investment Fund, which is part of the EIB Group. The Fund was designed to issue the EU bonds proposed in 1993 by Delors. It could do so now without a treaty revision, as it recently confirmed to the Economic and Social Committee of the EU. These would attract surpluses from the central banks of the emerging economies and sovereign wealth funds.

Nor do criteria for EU recovery investments need to be agreed. They have been so since 1997, not only for transport networks but also for investments in health, education, urban renewal and green technologies. These already are project-financed by the EIB rather than needing fiscal transfers between member states. Through Eurobonds the EIF could fulfil one of its original design aims of financing a public venture capital fund for small and medium firms.

Further, none of the major eurozone member states – nor Greece, Portugal or Ireland – count EIB borrowing against national debt. Nor need EIF Eurobonds do so. Converting a share of national debt to the EU and issuing Eurobonds does not need unanimity. Both could be by enhanced co-operation, which needs the agreement of only nine or more member states. If they wish, Germany, Austria, Finland or other member states could keep their own bonds but the rest of Europe could undertake a New Deal-style social investment-led recovery.
Stuart Holland
University of Coimbra

• The euro is a great concept but was badly conceived, without a central bank or political, fiscal and economic harmonisation. But the greatest problem today is how to manage state finances when billions disappear into the world’s tax havens thanks to the absence of any monetary controls and politicians granting their wealthy friends and multinationals all kinds of tax advantages and favours that have diluted tax revenues to the point where there is not enough in the kitty to maintain public services.

Even Paul Krugman has admitted that a return to temporary monetary controls could be an answer. With regard to Greece I would say that, in exchange for handing over more money, all Greek funds abroad in Switzerland or elsewhere must be returned. Then the same conditions should apply to the rest of Europe’s member states. According to the Tax Justice Network, over a trillion dollars lies in offshore banks and companies in tax havens. Recover this money and governments could not only reduce their debts but pave the way for a lowering of taxes across the board to encourage investment and growth, and increase spending power for the majority.
Peter Fieldman
Madrid

Apple and publishers fail to halt ebook lawsuit

Lawsuit accuses Apple and publishers of colluding to break up Amazon.com’s low-cost dominance

Apple and five major book publishers have failed to persuade a US judge to throw out a lawsuit by consumers accusing them of conspiring to raise electronic book prices two years ago.

The lawsuit in US district court in New York is related to government charges in April accusing Apple and publishers of colluding to break up Amazon.com’s low-cost dominance of the digital book market.

HarperCollins, Simon & Schuster and Hachette reached settlements, while Apple and two of the publishers, Macmillan and Penguin, said in court last month they want to go to trial to defend themselves against the government charges.

The consumers’ main allegation is that the publishers worked together to raise prices and decrease retail competition with Apple co-ordinating the agreement among them.

Unfriending the US: Facebook co-founder stands to save millions

In renouncing his citizenship last year, Eduardo Saverin will get out of paying $39m in taxes according to one estimate

Would you renounce your US citizenship for $39 million?

If you’re Eduardo Saverin, you might.

A billionaire Facebook co-founder, Saverin renounced his US citizenship last year, although the decision was made public just days before the social network’s anticipated initial public offering on Friday.

Saverin, 30, is a 2% stakeholder in the company, according to the wealth intelligence provider Wealth-X, which would put his net worth in the neighborhood of $2 billion after the IPO. (Some reports put Saverin’s stake as high as 4%, but any amount below 5% does not need to be reported.)

Facebook increased the price of its stock Monday in what will be Silicon Valley’s biggest ever IPO, valuing the company between $93bn and $104bn.

In unfriending the US ahead of Facebook’s big day, Saverin, who currently lives in Singapore, stands to save millions in taxes.

“Eduardo recently found it to be more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” Saverin’s New York-based spokesman Tom Goodman said Tuesday in a statement, downplaying the tax savings as a primary incentive.

Goodman added that Saverin plans to invest in Brazilian and global companies that have strong interests in entering Asian markets. “It made the most sense for him to use Singapore as a home base.”

But Wealth-X estimates his tax savings on his Facebook stake will be “at least” $39 million – 1 percent of his worth. Saverin will still have to pay a large exit tax for renouncing his citizenship, but Singapore is a low-tax jurisdiction and has no capital gains tax.

“This situation provides insight into a larger trend that has to do with competitive tax regimes in the United States and a broader debate about innovation and attracting human capital,” David Friedman, president and co-found of Wealth-X told the Guardian.

The move is also winning him a conservative fan base in the US. Forbes published an editorial lauding Saverin as an “American hero” for decamping.
The Heritage Foundation’s Mike Brownfield wrote a blog post unfavorably comparing the US’s economic freedom to Singapore’s.

Wealth-X’s Friedman frets that the money Saverin saves by renouncing his citizenship will be more likely pumped back into the part of the world where he now resides.

“The Facebook IPO is going to create a massive wave of venture capital investment and a whole cluster of creativity,” he said. “I suspect the money he’s saving in taxes is going to go into investments in companies that are innovating and going to create new jobs.”

Saverin’s spokesman confirmed as much to the Wall Street Journal.

“His decision had nothing to do with dissatisfaction here, but with a strong desire to do business there,” Goodman said.

The irony here, however, is that Saverin’s is a quintessential American story. The son of a multi-millionaire, Saverin was born in Brazil but immigrated to Miami at 13 after being threatened by kidnappers. He graduated magna cum laude from Harvard, where he met Facebook CEO Mark Zuckerberg in his junior year, with a degree in economics.

In a 2005 interview with his high school alma mater’s magazine, he was quoted as saying “basically, Mark is the tech guy and I’m the business guy.”

The two had a falling out over the direction of the company and ultimately parted ways after Saverin sued for an undisclosed amount. The case was settled out of court, with Saverin reportedly receiving a 5% stake in Facebook, some of which he has since sold off.

As a result, not everyone is calling him a “hero”, however: an editorial in the New York Daily News said a tax doge “gives immigration a bad name.”

So in the end, the country that gave his family sanctuary when they were in danger may have become too economically punitive once he was able to cash out.

Politics live blog: Monday 14 May

Rolling coverage of all the day’s political devlopments as they happen

12.30pm: A Conservative MP has claimed that his party will fight the next election promising a referendum on Britain’s membership of the EU. Mark Reckless made the comment at a press conference organised by People’s Pledge, the cross-party group campaigning for a referendum.

I believe my party will go into the next election committed to an in/out referendum on Europe … [That's because of] the shift of mood among colleagues, the need to differentiate the Conservative party from the Coalition and basically to enthuse our members, our activists, our supporters, and indeed, backbench Conservative MPs. I think there has been some considerable effort in recent months to think what you could have as a referendum, what’s the way to do this, how could you renegotiate that, and I think that work has failed to come up with a credible and coherent alternative to an in/out referendum. That’s why I believe we are likely to go in that direction.

Reckless may have been reading this article by James Forsyth in the Spectator, which includes the line: “One source intimately involved in Tory electoral strategy told me recently that a referendum in the next manifesto was ‘basically a certainty’.”

The press conference was held to announce that the People’s Pledge will be holding polls in three constituencies towards the end of July asking people if they want a referendum. They have already had one in Thurrock, in which 90% of people said yes on a 30% turnout.

12.23pm: Ed Miliband has issed a tribute to Peter Hain following his resignation from the shadow cabinet. (See 8.50am.) He says that Hain has made “an enormous contribution from the front bench over the past 16 years” and that he has been “an exceptional colleague and trusted friend”.

11.43am: Here are the main points from the Number 10 lobby briefing.

• Number 10 played down speculation that Britain will contribute to a rescue fund if Greece is ejected from the euro. Asked about a story in the Daily Telegraph saying that Germany wants all 27 members of the EU to contribute to a fund that would deal with the consequences of a Greek exit, the prime minister’s spokesman said: “We have been very clear all along that it’s up to the Eurozone countries to support their currency.” When it was put to him that, in the event of a Greek withdrawal, it would no longer be a member of the Eurozone, the spokesman repeated the point about the need for the Eurozone countries to support their own currency. He also pointed out that the EU-wide bail out fund is being wound up (although journalists pointed out that that has not happened yet).

• Number 10 hinted that Britain would be willing to contribute £1bn to a European growth plan. Asked about a story in the Financial Times saying that David Cameron was considering contributing £1bn to the European Investment Bank as part of a plan to recapitalise the bank championed by new French president, François Hollande, the spokesman said:

There are no proposals on the table at the moment. We will obviously consider proposals that are made on their merit. We are open-minded about how the European Investment Bank can support infrastructure investment.

• Number 10 refused to endorse Philip Hammond’s call for businesses to stop “whingeing” about the economy. Asked whether or not David Cameron agreed with what Hammond said (see 10.51am), the prime minister’s spokesman repeatedly sidestepped the question and just stressed the measures the government was taking to encourage growth. He also said that he would not be briefing on the outcome of Cameron’s meeting with his business advisory council this afternoon.

• Cameron will meet François Hollande, at the G8 summit in the US at the end of this week, the spokesman said.

• Number 10 rejected claims from the Royal College of Nursing that 61,000 health workers face the sack. “We do not recognise their figures,” said the spokesman.

• Cameron and Nick Clegg have a joint meeting today with the Dalai Lama.

• Number 10 did not deny an FT story suggesting Cameron will meet Mitt Romney in London this summer. (See 10.51am.) “There will be lots of people in town during the Olympics,” the spokesman said. “We have not confirmed meetings yet.”

• Ed Vaizey, the culture minister, has announced measures to encourage overseas investment in UK film production.

11.37am: I’m just back from the Number 10 lobby, where Europe and relations with business were the main themes. Full summary coming up soon.

10.51am: You can read all today’s Guardian politics stories here. And all the politics stories filed yesterday, including some in today’s paper, are here.

As for the rest of the papers, here are some stories and articles that are particularly interesting.

• Iain Duncan Smith tells the Daily Telegraph in an interview that half a million people could lose disability benefits under his plans.

In an interview with today’s Daily Telegraph, the Work and Pensions Secretary says that he is determined to introduce radical reforms to disability benefits which will see more than two million claimants reassessed in the next four years.

Iain Duncan Smith says that the number of claimants has risen by 30 percent in recent years “rising well ahead of any other gauge you might make about illness, sickness, disability”. Losing a limb should not automatically entitle people to a pay-out, he suggests.

The cost of disability living allowance, which is intended to help people meet the extra costs of mobility and care associated with their conditions, now outstrips unemployment benefit and will soon be £13 billion annually.

Under the reform plans, the existing benefit will be replaced with a simpler “more focused” allowance and only those medically assessed to be in genuine need of support will continue to qualify.

An official impact assessment of the plans, released this month, reveals the scheme will cut benefit payments by £2.24 billion annually – and lead to about 500,000 fewer claimants.

• George Parker and Helen Thomas in the Financial Times (subscription) say Philip Hammond, the defence secretary, told business leaders yesterday to stop whingeing.

In a sign of deteriorating relations between the coalition and business, Philip Hammond, defence secretary, said some large companies were sitting on large piles of cash and urged them to start investing it to meet future demand.

Asked by the BBC’s John Pienaar about whether some in business were complaining excessively about the government’s approach, he said: “Yes, I suppose they are in a way whingeing about it.”

Earlier William Hague fuelled an increasingly tense relationship when he said: “I think we should be getting on with the task of creating more of those jobs and more of those exports, rather than complaining about it.”

Mr Hague, interviewed in the Sunday Telegraph, added: “There’s only one growth strategy: work hard.”

• George Parker and Jim Pickard in the Financial Times (subscription) say Tony Blair is expected to support calls for more emphasis on growth.

Tony Blair and Lord Mandelson are to add their weight to Labour’s calls for a renewed emphasis on growth in a sign that the big beasts of the New Labour era are returning to the cause to help make the party’s case on the economy.

Mr Blair has been holding regular talks with Ed Miliband, Labour leader, and is understood to share the view that austerity has become self-defeating and that a growth strategy – including at a European level – is vital.

The former prime minister has also been meeting Labour MPs and is expected to use the fifth anniversary of his departure from Downing St this summer to put down markers of his views on the economy.

A foretaste of that message is expected to come on Monday when Lord Mandelson appears alongside his one-time political foe Ed Balls, shadow chancellor, at a Centre for European Reform event.

Mandelson’s views on this are set out in a piece that he’s written for the Guardian jointly with Ed Balls.

• The Financial Times (subscription) says David Cameron is hoping to meet Mitt Romney in London in the summer.

David Cameron is hoping to meet Mitt Romney, the US presidential hopeful, in London this summer, as Downing Street draws up plans to avoid a repeat of this year’s diplomatic snub of François Hollande.

By putting out the welcome mat for Mr Romney, Mr Cameron would be sending out a very different signal to that delivered to Mr Hollande in February, when the prime minister refused to meet the Socialist presidential candidate on a visit to London.

• Tom Newton Dunn in the Sun says Philip Hammond, the defence secretary, has banned military chiefs from giving speeches or interviews without permission.

The move has been branded “insulting” and “paranoid” by senior sources.

It shows how the bitter spat between Tory Ministers and Forces’ commanders is worsening.

David Cameron lost his temper with generals last year for criticising swingeing cuts and the Afghan withdrawal policy. The PM fumed: “You do the fighting — and I’ll do the talking.”

A senior source told The Sun last night: “Slapping a gag on the chiefs just goes to show how much trust has been lost on both sides.

“We’re still fighting a war — now with even less resources — but the Government no longer trusts us to explain why.”

• Boris Johnson in the Daily Telegraph says the government should appoint a Tory to run the BBC.

If you are funded by the taxpayer, you are less likely to understand and sympathise with the difficulties of business; you are less likely to celebrate enterprise. I have sometimes wondered why BBC London never carries stories about dynamic start-ups or amazing London exports – and then concluded gloomily that it just not in the nature of that show. It’s not in their DNA. Fully 75 per cent of the London economy is private sector – and yet it is almost completely ignored by our state broadcaster.

Well, folks, we have a potential solution. In a short while we must appoint a new director-general, to succeed Mark Thompson. If we are really going ahead with Lords reform (why?), then the Lib Dems should allow the Government to appoint someone to run the BBC who is free-market, pro-business and understands the depths of the problems this country faces. We need someone who knows about the work ethic, and cutting costs. We need a Tory, and no mucking around. If we can’t change the Beeb, we can’t change the country.

• John Kampfner in the Independent says political journalism is too binary.

Political journalism is notoriously fickle. It is also, with some exceptions, conformist, following the narrative established at the time. That narrative is invariably binary. Someone is either up or down. The advent of the Coalition produced a new ingredient, the Liberal Democrats, previously largely ignored. The cycle of eulogising and kicking had to be divided into three. First in the stocks was Nick Clegg, in the autumn of 2010, after the tuition fees U-turn. From then it was open season and the man could do nothing right.

I’m off to the Number 10 lobby briefing now. I’ll post again after 11.30am.

10.34am: The Independent Parliamentary Standards Authority is holding a public consulation on the subject of how much MPs should be paid. And, to coincide with this, it has launched something called the Month of Ideas. It does not seem to be generating many ideas – we’re half way through the month, and the first submission on the Month of Ideas blog has only just gone up – but the first contribution is quite interesting. It’s from Alastair Campbell. Here’s an extract.

I worry about the attitude that says being an MP is a privilege as well as public service because, though that statement is true, taken to its logical conclusion, we go down the road to a Parliament open only to the wealthy.

Parliament should attract a wide variety of people, among them the best and brightest in the country. The relentless negativity which surrounds politics puts many people off the idea of a political career. Talented people can earn more and with less pressure and opprobrium elsewhere. If we also decide they should not get a salary that befits a challenging and important job, then I fear we will narrow the field of talent willing to enter Parliament even further.

10.24am: The Scottish government has announced its plans to set 50p as the minimum price for a unit of alcohol. Full details are on the Scottish government news release. Here’s a statement from Nicola Sturgeon (pictured), the Scottish health secretary.

Too many Scots are drinking themselves to death. The problem affects people of all walks of life.

It’s no coincidence that as affordability has increased, alcohol-related hospital admissions have quadrupled, and it is shocking that half of our prisoners now say they were drunk when they committed the offence. It’s time for this to stop.

Introducing a minimum price per unit will enable us to tackle these problems, given the clear link between affordability and consumption.

There is now a groundswell of support for the policy across the medical profession, police forces, alcohol charities and from significant parts of the drinks and licensed trade industry who recognise the benefits minimum pricing can bring – saving lives and reducing crime.

Since 45p was first proposed as the minimum price 18 months ago, we have seen inflation of around five per cent. A minimum price of 50p takes this into account and will achieve a similar level of public health benefits to what 45p would have achieved in 2010.

10.08am: The Leveson inquiry has started. Alastair Campbell and Lord O’Donnell are up today. You can follow the proceedings on our live blog.

9.35am: Les Hinton (pictured), the former News International boss who was accused by the Commons culture committee of misleading parliament about phone hacking, has hit back. Hinton disputed the committee’s findings when its report was published earlier this month but he has now sent a more detailed response to the committee’s chairman, John Whittingdale. Here’s an extract from the story filed by the Press Association.

[Hinton] says of the committee’s findings: “They are based on a misreading of evidence, and on a selective and misleading analysis of my testimonies to your committee.”
He goes on to the claim that the report’s conclusions “rest on a highly selective reading of the record, and unsupportable leaps in logic and inference”.
And he insists “there is nothing credible … to suggest that I was anything but candid with the committee”.
The report concluded that Rupert Murdoch’s News International had misled the hacking inquiry in a “blatant fashion”.
Opposition MPs on the committee also branded Murdoch as unfit to be in charge of a major media firm, although Tory members refused to support this …
In the robust rebuttal letter, Hinton questions the impartiality of the committee, which was deeply divided over elements of the report, and claims that “matters have gone seriously awry”.
“It is hard to avoid the view that the committee has sometimes allowed preconceived judgments to cloud its objectivity and sense of fairness.”
The committee accused Hinton of selective amnesia after he replied he could not remember 72 times during questioning.
But he insisted that number had been inflated by grouping together answers to the same or similar questions …
Hinton added: “I have apologised publicly for the misconduct at the News of the World when I was executive chairman of News International. As a consequence, I resigned from News Corporation last year after a career that began 52 years before.
“My criticism of the report should in no way be taken as an effort to minimise the harm that has occurred as a result of the events at News of the World.
“But if this committee is going to accuse me of misleading parliament or being complicit in a cover-up, it should get its facts right and conduct a fair process. The committee has done neither.”

9.03am: Nick Clegg has done a round of interviews this morning to publicise his pupil premium initiative. PoliticsHome have been monitoring them all.

Here are the key points.

• Clegg said the pupil premium would help all pupils, not just the ones from poor families who are intended to be the main beneficiaries.

I do want to stress is that focusing as much attention and money as we are on the children from the most disadvantaged backgrounds doesn’t just help them. It helps all children from all backgrounds, because we know that the most successful schools are where classrooms and classes can move together as one, where you don’t have a small number of children at the back messing around or completely switched off, which then holds everybody else back.

• He said the pupil premium was better than some Labour initiatives because it was not ring-fenced.

In the past, when these announcements were made, new pots of money were allocated by governments to schools and teachers, it would come with endless strings attached and a great, big instruction manual telling teachers what to do with the money. What we’re saying is: “Here’s the money, it’s an unprecedented amount – £2.5bn by the end of this parliament – you are free to do with it what you will as along as you work hard to close that gap between children from different backgrounds.”

• He said the way schools were funded needed to be reformed.

The way in which school funding is very idiosyncratic. It’s built up layer upon layer over years and we are moving towards making announcements on a more rational division of the pot. It’s a very controversial thing to do because, just as much as there might be winner in Dorset, there might be losers in East London, so it’s a very controversial thing to do. It’s not something we’re going to rush into.

• He said he supported Iain Duncan’s Smith’s plans to cut the number of receiving disability living allowance. Duncan Smith has talks about this in an interview in the Daily Telegraph today. Clegg said: “I support reform because many people have received DLA, as it’s known, without any personal, face-to-face tests for year upon year upon year without any assessment about whether their circumstances have changed.”

8.54am: Peter Hain, the shadow Welsh secretary, has announced that he is leaving the shadow cabinet. There’s expected to be a limited shadow cabinet reshuffle soon.

As Hain told BBC Wales this morning, he is leaving partly so that he can concentrate on campaigning for a Severn Barrage.

8.50am: It’s quite a busy day at Westminster, but nothing is probably quite as important as the crisis in the Eurozone, which is back at the top of the headlines again today. Greece’s departure from the euro looks increasingly likely and, in early trading this morning, the FTSE 100 fell 70 points. My colleague Graeme Wearden has all the details in his Eurozone debt crisis live blog. Nick Clegg has been giving interviews this morning in advance of a speech on the pupil premium and he has reiterated the government’s determination not to contribute to a Eurozone bailout.

Here’s the full agenda for the day.

10am: Nick Clegg delivers a speech on the pupil premium. As Rajeev Syal reports, he will announce that prizes will be awarded to schools that come up with the best ways of spending the pupil premium.

10am: The People’s Pledge, the group campaigning for a referendum on Britain’s membership of the EU, announces the constitutuencies where it is going to ballot voters on whether they want an EU referendum.

10am: Alastair Campbell and Lord O’Donnell, the former cabinet secretary, are giving evidence to the Leveson inquiry.

10am: Ed Vaizey, the cuture minister, publishes the government’s response to Lord Smith’s film review.

2.30pm: Philip Hammond, the defene secretary, makes a statement in the Commons about the Ministry of Defence budget. He is expected to say that the MoD has balanced its budget for the first time in about a decade.

3.15pm: Dame Helen Ghosh, permanent secretary at Home Office, Lin Homer, the HM Revenue & Customs chief executive and Robert Whiteman, chief executive of the Border Agency, give evidence to the Commons public accounts committee about student immigration.

At some point today David Cameron has also got a meeting with business leaders. Given that William Hague and other ministers have been telling business leaders to stop complaining about the economy and to just work harder, it could be an edgy encounter.

As usual, I’ll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I’ll post a lunchtime summary at around 1pm and another at about 4pm.

If you want to follow me on Twitter, I’m on @AndrewSparrow.

And if you’re a hardcore fan, you can follow @gdnpoliticslive. It’s an automated feed that tweets the start of every new post that I put on the blog.

Incoming search terms:

• people\s pledge

Carroll Shelby obituary

American racing driver and motor engineer who developed the classic Cobra sports car

Carroll Shelby, the colourful American racing driver and engineer who shared the winning Aston Martin with Britain’s Roy Salvadori in the 1959 Le Mans 24-hour sports car classic, and who later gave his name to the iconic Shelby American Cobra high-performance sports car, has died at the age of 89.

The genial Texan’s trademark was his distinctive striped, bib-style racing overalls, which gave him a swashbuckling, Casey Jones-like appearance throughout a distinguished racing career that included eight world championship grand prix outings driving a private Maserati 250F, and latterly for the ill-starred Aston Martin Formula One team.

Born in Leesburg, Texas, the son of the town’s postmaster, Shelby was a child when his family moved to Dallas. Despite being diagnosed with a slight heart murmur at the age of 10, he served as a flight instructor with the US air force during the second world war. He went on to work in the truck business, before turning his hand to chicken farming, unsuccessfully, in the late 1940s.

Meanwhile, Shelby had started to dabble in sports car racing, and by 1952 had gained a degree of recognition after some promising outings at the wheel of a Jaguar XK120, before switching to a fearsome, Cadillac-powered Allard the following year. In 1954, spurred on by the offer of a cup from Kleenex heir Jim Kimberly – one of the great US racing philanthropists of the time – for the best performance by an amateur driver, Shelby entered the Allard in the Buenos Aires 1,000km sports car race, co-driving with airline pilot Dale Duncan, who was a useful contact when it came to air freighting the car to Argentina.

This first competitive appearance outside the US for Shelby was memorable: he and Duncan finished 10th, despite a carburettor fire during a pit stop, which had to be extinguished by the simple expedient of Duncan urinating on the engine. More significantly, Aston Martin driver Peter Collins introduced Shelby to his team manager, John Wyer, who had been impressed with the Texan’s handling of the wild and woolly Allard. Shelby now had his foot in the door at Aston Martin, which would lead to a place in their works team – and that memorable victory at Le Mans five years later.

Like most of those who drove for Aston Martin in the 1950s, Shelby loved the team’s ambience, and he never seriously considered any of the fleeting, and possibly empty, offers to join Maserati or Ferrari. His Texan penchant for straight talking occasionally made David Brown, the Aston Martin company’s owner, wince: telling the boss one of his cars handled like “10 pounds of shit in a five-pound bag” was pretty strong stuff from a hired hand in the mid-1950s. Shelby recalled Brown’s reaction: “He got pissed off at that, turned round and walked away.”

Along with Salvadori, Shelby also took up the F1 Aston Martin DBR4s during the 1959 season. But these front-engined museum pieces were obsolete even before they raced for the first time, a new generation of mid-engined cars from Cooper dashing their hopes of success. At the start of 1960, Shelby suffered bad chest pains that alerted him to a now-serious heart condition. Despite attempting to control the situation by driving with nitroglycerin pills under his tongue, Shelby decided to retire from racing at the end of that year.

One of Shelby’s dreams had been the manufacture of a high-performance American sports car, so when he heard in 1961 that supplies of Bristol engines had dried up for the British AC company, he brokered a deal that saw AC switch to using a 4.7-litre Ford V8, and the famous Cobra was born. Ford backed Shelby’s efforts on the race track, and the Shelby Cobras were duly homologated as GT cars by the start of the 1963 international sports car racing calendar, when they were pitched against the Ferrari GTOs. In 1965, the Shelby Cobras won the FIA GT championship, wresting this prestigious title from their Ferrari opposition.

By 1970, Shelby was diversifying into other businesses outside motor racing, but in 1982 Chrysler boss Lee Iaccoca, an old friend, offered him the opportunity to serve as a performance consultant to the automotive giant, bringing him back into the motor racing orbit.

He is survived by his wife, Cleo, his two sons, Patrick and Michael, his daughter, Sharon, and his sister, Anne.

• Carroll Shelby, racing driver and engineer, born 11 January 1923; died 10 May 2012.