The International Consortium of Investigative Journalists
(ICIJ) grabbed the attention of the tax world in October, when
it publicly released 28,000 sensitive documents revealing
information about tax rulings agreed between multinational
companies and the Luxembourg tax authorities, many negotiated
by PwC Luxembourg. The episode has become known as 'LuxLeaks'.
It followed up with a second batch of documents in December,
this time containing details of the involvement of the other
Big 4 firms in questionable tax planning.
|ICIJ is a new
entry this year
Published in full by several major European newspapers and
covered extensively in the international press, the leaked
documents have shone a spotlight on comfort letter rulings in
Luxembourg, exposed tax avoidance by 340 global corporations
and threatened to destabilise European Commission (EC)
President Jean-Claude Juncker.
Juncker was prime minister of Luxembourg from 1995 to 2013,
as well as holding the position of finance minister for 20
years, and the exposé has prompted calls from many in
the EU for his resignation just months into his term as
"We started working on this issue in 2012, and in 2013
looked at offshore leaks, based on information we had for 10
companies," says Gerard Ryle, director of the ICIJ. "In January
2014 we published another series of stories about China and
Hong Kong. We've also done stories on the Seychelles, the
British Virgin Islands, on Jersey where we worked with The
Guardian, and more."
"This is an ongoing series of stories. In 'LuxLeaks' it was
looking at the role of the Big 4 in tax avoidance."
PwC says it rejects "any suggestion that there is anything
improper about the firm's work" and says that any assistance
given to clients regarding negotiations with Luxembourg
authorities is done in accordance with all applicable tax laws
and is guided by the firm's Global Tax Code of Conduct.
So just how is a small, non-profit outfit able to expose one
of the founding members of the EU as being involved in
questionable deals with multinational companies, inflating its
wealth to make its citizens the second-richest in the
Led by Ryle from its headquarters in Washington, DC, the
ICIJ operates teams ranging from as few as three reporters to
as many as 100 to sift through documents and produce media
"Pretty much every time we do a project we work with about
half members and half non-members," says Ryle.
"If we think it is of public interest and a good story, we
then approach media partners such as The Guardian in
the UK, Le Monde in France and Suddeutsche
Zeitung in Germany."
"We don't match rival organisations, for example The
Guardian and The Telegraph, so that we have a
group of reporters who don't feel like they are competing and
in this way we can have a true collaboration."
"With technology these days we can allow journalists to
search all 28,000 documents from their laptops, which
previously would have been a huge task."
The LuxLeaks story – named 'Secrecy for
Sale' by the ICIJ – is unusual for the ICIJ in
that the documents had already been used in stories as far back
as 2012. This followed a Germany documentary, which was then
picked up by the BBC's flagship investigative programme
"The reporter from the BBC is a member [of ours] and alerted
us to the fact that the documents were publicly available. They
were a set of documents I wanted, so I got them!" says
"Usually you want brand new documents and it would usually
be difficult to get media organisations interested. But media
partners have seen the public interest and put a lot of their
time and resources into going through these documents."
"Fundamentally people really care because if some people
aren't paying their fair share of tax, it means that everybody
else is effectively paying more."
"We have more to come," adds Ryle. "We will still be
reporting on this into 2015. But we have other stories
– we are not just a tax organisation and we are not
just a leaks organisation."
Ryle first became interested in reporting on tax matters
when working on a tax fraud case in his native Australia. He
came to realise, he says, that all major frauds, money
laundering and illegal arms deals go through tax havens, as the
level of secrecy they maintain makes them ideal for this
"I think what needs to happen is reform of the whole tax
system across the world," he says. "If big economies wanted to
change the system, they could – overnight. But it is
money flowing out of poor countries into rich countries so
ultimately they lose a little in tax revenues, but gain a lot
in the long run."
"The only thing we can do as journalists is to expose
secrecy, because secrecy is how it all works."