People are wondering why a £3.375m windfall wasn’t enough to keep Nawaz’s think tank going. No one suggests he’s done anything wrong, but Brian Cathcart argues clarity would be welcome
The Quilliam Foundation folded earlier this month owing £600,000 and blaming the Covid pandemic. A think tank whose stated mission was to fight Islamist extremism, it had been popular with the far-right, the Conservative government and the UK press, but was loathed by many Muslims.
Supporters and critics alike will have been surprised by the closure, not least because it is less than three years since Quilliam and its high-profile boss, Maajid Nawaz, shared in a $3.375 million libel settlement in the United States.
Since Quilliam was a relatively small non-profit organisation it is curious that a windfall on such a scale was not enough to keep it afloat longer, even allowing for the Covid pandemic. So, while no one is suggesting that anything unlawful has occurred, it is natural to ask what happened.
We examined the publicly available financial records for Quilliam in both the UK and the US and could find no clear evidence that the $3.375 million found its way into the Quilliam coffers. Importantly, this is not proof that it did not, since the accounts are either sketchy (though within the law) or long overdue (again no law has been broken). But it leaves the matter open, so we put some questions about it to Nawaz himself.
Nine months after the SPLC settlement, however, Quilliam UK was in trouble.
Nawaz, perhaps best known in Britain today as an LBC radio presenter, was the sole director of Quilliam UK and was chair of a three-person board of Quilliam US (which included his wife). We approached him twice by email over the past five days but received no response.
As explained below, the US libel settlement document in 2018 stated that the $3.375 million would be used for a specific purpose. On this basis, and because Quilliam was a very public organisation heavily engaged in public policy issues, we believe that clarity on how it was spent would be welcome and in the public interest – although again there is no suggestion that anyone has done anything wrong.
The SPLC Settlement
In June 2018 the well-known American charity Southern Poverty Law Center (SPLC) agreed to apologise and pay $3.375 million in compensation to three parties: Maajid Nawaz, the Quilliam Foundation Ltd (of London) and the Quilliam Foundation Inc (the US branch). These parties had jointly initiated legal proceedings over an SPLC publication that identified Nawaz and Quilliam as anti-Muslim extremists.
In its widely disseminated apology, SPLC stated that its description of Nawaz and Quilliam had been ‘simply wrong’ and added: ‘As part of our settlement, we have paid $3.375 million to Mr. Nawaz and Quilliam to fund their work to fight anti-Muslim bigotry and extremism.’
The detail of this was set out in a legal ‘Settlement Agreement and Release’, the first paragraph of which read as follows:
‘The SPLC, in full and final settlement of Nawaz’s and Quilliam’s claims against the SPLC, and in consideration of the other rights and relief set forth below, shall pay the sum of Three Million Three Hundred Seventy-Five U.S. Dollars ($3,375,000.00) (the “Payment”) to an escrow account held on behalf of Nawaz and Quilliam by Clare Locke LLP, within 12 business days of the effective date, which Nawaz and Quilliam intend to fund work fighting anti-Muslim bigotry and extremism.’
That was signed by representatives of the four parties – the SPLC, Nawaz, Quilliam UK and Quilliam US.
Nawaz subsequently stated in an interview that $400,000 of this sum was required to pay legal fees. That left just short of $3 million.
Quilliam UK
If Quilliam UK had received a one-third share, that would have been about £700,000 – a large cash injection for a company of its size. No sum of that order shows up in the accounts filed at Companies House in London.
It is possible, since small company accounts are not detailed, that such a sum could have gone in and out quickly without finding its way on to the Companies House record, but that seems unlikely given this company’s size. If it had received a cash boost on such a scale that would surely reveal itself in some way on the bottom line?
In fact, the financial statements tell a different story: Quilliam UK did not get richer in 2018/19, it got poorer.
Three months before the SPLC settlement, in March 2018, it was a healthy going concern. Its annual turnover – money in and out – was roughly £1m, and though it had made a loss of £23,000 that was not a significant sum in context. The company had 11 employees.
Nine months after the SPLC settlement, however, Quilliam UK was in trouble.
Its return for the year to March 2019 showed that it still employed 11 people and that its losses had risen to £80,000. But the most striking feature of the statement was that the company was owed £746,000 and that it owed £830,000.
In other words, in the year when we might have expected it to receive a windfall, Quilliam developed a serious cash flow problem and was waiting for payments roughly equivalent to three-quarters of a normal year’s turnover.
No less strikingly, Nawaz apparently attempted to bail the company out from his own pocket, lending it in excess of £760,000. Yet even so the coffers were nearly empty. Quilliam had only £1,047 cash ‘in hand or at bank’ and only £3,062 in tangible assets.
So bad was the situation that, according to a subsequent