Mr. Five Per Cent Brings to Life Story of buccaneering Calouste Gulbenkian Who Anticipated Today’s Unfettered Global Tycoons


By Oliver Bullough

What does the life of an Ottoman-born ethnic Armenian oil tycoon have to teach us about the modern world? Quite a lot, it turns out, judging by this fascinating biography of Calouste Gulbenkian, a dealmaker for the ages and, at his death in 1955, the world’s richest man.

Gulbenkian saw an oilfield only once, on a visit to Baku (then an oil-fueled boomtown in the Russian empire, now the capital of Azerbaijan) as a 19-year-old graduate from King’s College London, but he was very quick to appreciate the importance of oil as a commodity, and the opportunity inherent in international competition for it. He combined excellent contacts in the Middle East with skills he learned as an entrepreneur in the City of London, and secured a 5% stake in all oil found beneath the Asian territories of the Ottoman empire.

When the deal was signed, on the eve of the first world war, his stake didn’t sound like much, but he fought for decades to hang on to it and, by the 1950s, he had a shilling for every pound earned from some of the world’s richest oilfields. And that really added up. In modern terms, he died with a fortune of almost £5bn.

He was clearly not an easy person to like, and fell out with almost everyone he came across, but his buccaneering qualities make him an extremely interesting person to read about. At one point, he exploited the young Soviet Union’s shortage of capital to build the nucleus of a world-class art collection. There are several Rembrandts missing from the Hermitage, thanks to his negotiating skills.

When Gulbenkian was born in 1869, Armenians were a significant minority in Istanbul, and dominated the city’s commercial sector, having taken advantage of a series of reforms passed by an Ottoman government keen to expand its decrepit economy. By the 1880s, however, the city was becoming uncomfortable for them, with the start of a wave of pogroms that peaked in the infamous Armenian genocide of 1915-17.

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Gulbenkian had moved to London to study, and stayed, becoming a British subject, building his City career, and gradually abandoning the family’s merchant business. His life and career was, however, mostly transnational. “Empires and states, diplomats and statesmen, spheres of influence … all were distractions to Gulbenkian: to be ignored if possible, or else coached and co-opted,” Conlin notes.

He liked some countries, particularly Britain and France, where he kept his artworks and built a pleasure garden, but avoided entanglements that might cost him money. This is why he spent most of the second world war in Portugal, then a neutral dictatorship, and leaned towards whichever side looked like winning.

Gulbenkian looks remarkably like a modern oligarch, with his high-ranking connections in all countries, and his business interests “offshore”

And this is why his life has such relevance today: he is a relic of a previous age of globalization, the freewheeling days before 1939 when money flowed around the world as unhindered by regulation as it does now, and the powerful were able to seek profits where they liked, and to dodge laws however they felt fit. As his daughter Rita, with whom he had a more than usually complex relationship, explained: “laws are made for everyone but us.”

Stripped of anachronisms, Gulbenkian looks remarkably like a modern oligarch, with his high-ranking connections in all countries, his border-straddling ambitions, his children at English schools, and his business interests in the liminal sphere we now call “offshore”. He used corporate structures to own property, and skillfully balanced his and his family members’ movements between countries to avoid being beholden to any tax authority.

He owned his portfolio of shares and bonds via a Liechtenstein entity called Anstalt Vega, which meant he paid only 100 Swiss francs in tax in 1931 – on assets valued at £4.6m (£288m in today’s money). Much of his empire was structured and controlled via the UK, but he had no intention of paying for the privilege.

After the second world war, with capital controls in force and countries trying to repair their economies while paying for welfare states, there was little tolerance for globe-trotting tax dodgers, so Gulbenkian stayed in Portugal, unwilling to risk the consequences of exposing himself to the revenue services of any of his former haunts. He flirted with the idea of endowing art galleries in London and the US but was concerned by the tax impact of visiting either country and, eventually, the Gulbenkian Foundation ended up in Portugal. It is now one of the largest sources of charitable donations in Europe, and the Gulbenkian is a major Lisbon art gallery.

Conlin had access to the foundation’s archives, which did not give up their secrets without a fight. Some of Gulbenkian’s early correspondence was in Ottoman Turkish, a language no longer spoken, and written in Armenian characters, an alphabet few people know. Decoding all this, and making sense of the worlds that Gulbenkian moved in, is a remarkable feat of scholarship.

Mr. Five Per Cent is written precisely, with flashes of dry humor, and Conlin wears the depth of his research lightly. The story he tells is one of a businessman playing off great powers in the Middle East, exploiting loopholes in the world’s financial architecture, avoiding accountability, making a fortune for himself, and spending it on a life of luxury. Gulbenkian may have been a unique talent of a past age, but his heirs are all around us.

(This review originally appeared in the Guardian newspaper on January 3.)

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