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Global Tax 50 2016: The International Consortium of Investigative Journalists

06 December 2016

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Network of journalists

 The International Consortium of Investigative Journalists
The International Consortium of Investigative Journalists last appeared in the Global Tax 50 two years ago

The International Consortium of Investigative Journalists (ICIJ) has established itself as a major player in the world of tax with leaks of confidential information leading to substantial legislatives changes worldwide.

On April 3, the organisation released the 'Panama Papers', a giant leak of more than 11.5 million financial and legal records that exposed how high-profile politicians, criminals and celebrities have used offshore shell companies in tax havens to hide assets from the tax man.

Gerard Ryle, who leads the ICIJ's staff from its headquarters in Washington, DC, spoke to International Tax Review about the investigation and the fall-out of the leak.

International Tax Review: 'LuxLeaks' and the 'Panama Papers' were markedly different in their content. Yet, their portrayal in much of the mainstream media was very similar. What are your thoughts on this?

Gerard Ryle: We're not just interested in tax havens, we do other stories. ICIJ has really changed a lot in the last five years from being a network of journalists to being a network of media partners. Together with our media partners we have established that there is real public interest in offshore secrecy, so if someone comes along with more material, then we will be very keen to do another story. It's just got to be different to what we have done before.

Every project we are doing on offshore secrecy has to be different to the previous one, and I do think that this one was slightly different in that it is much more detailed than anyone had ever seen before.

We focused on public figures because we want to be able to establish public interest in what we are doing. We found 12 current or former world leaders.

What was amazing is that we had 40 years of records from this law firm [Mossack Fonseca] with offices all over the world – even though they are based in Panama they have offices in New York, China, UK, etc. Literally, it was day-to-day [work] for 40 years of the offshore world.

We even saw records in there where they were reacting to our first story, in 2013, the offshore leaks story. What we saw is they were adjusting their services based on the new regimes and the new laws that were coming in as a result.

Quite clearly Mossack Fonseca were reacting to new rules coming in, and they were just finding new ways around them. They were complying with what they saw as the law, using the minimum application of the law. I assume these laws were designed in the first place to stop this kind of behaviour happening, but the laws are not working.

The biggest moment for me was when we had spent almost a year working on the story and then several weeks – and we did give them several weeks – before publication we approached Mossack Fonseca with a very, very, very long list of questions where we asked about this exposed person, or that well-known figure, or this world regime which they had set up companies for. They came back with this extraordinary answer where they said: "We don't know what you're talking about. These people are not our clients."

At first I thought they were just lying, but then I realised that they were not. They did not do due diligence on many of these things. I'm not going to name any banks, but if Bank A came to Mossack Fonseca and asked for a company that just happened to be linked to a rogue regime or a criminal then they did not ask any questions.

We were told that the offshore world had cleaned up, we were told that systems were in place, that due diligence was done – and quite clearly it was not.

ITR: So do you think the lack of due diligence is by design?

GR: It had to be by design. I remember that as a journalist in part of the early research. I don't know why, but you know that as a journalist when you type a random thing into the search system, and I typed in "Pyongyang" thinking that there would be no way I would get anything. Lo and behold, up pops a company with a couple of entities registered out of Hong Kong by Mossack Fonseca. Some of the clients had addresses in Pyongyang! It was actually a front company for the North Korean regime. If we, as journalists, can find it within a few minutes, then surely someone should have done at Mossack Fonseca. That is what I mean by a lack of due diligence.

We found one client who was getting services while in jail in the US in New Jersey. He had been charged and convicted of paedophilia, been charged and convicted with taking orphans out of orphanages and turning them into prostitutes while they were underage. How could you not know this? It was staggering, in hindsight at least.

The thing about the offshore world, as I have always said, is that it is just total secrecy. When you have secrecy you have the potential for wrongdoing, so you just don't know what you are going to find when you get a data set like this, whether it's going to be criminal wrongdoing or not. It is legal to set up a company in an offshore jurisdiction, but that doesn't necessarily mean it is not of public interest, or that it is right.

ITR: An interesting comment in an article in our recent Latin America guide said that the Panama Papers could have been dubbed the 'British Virgin Islands Papers' due to the fact that a huge amount of the structuring was going through the BVI. Is there an onus on the UK government to be more responsible for their overseas territories?

GR: Absolutely. You got a lot of rhetoric from former UK Prime Minister David Cameron when he was in power about how he was going to clean up the system and then we found his dad in the Panama Papers investigation, which by itself wasn't necessarily news, but the way he reacted to it made it big news in Britain. A book came in mid-October from Cameron's former spin doctor [Unleashing Demons: The Inside Story of Brexit, by Craig Oliver] in which he expressed how close Cameron came to falling over this whole thing.

However, I do think that the British overseas territories are the main havens for this kind of behaviour in the story. We called it the Panama Papers because Mossack Fonseca are based in Panama, but they had offices all over the world – including in Britain.

ITR: David Cameron didn't fall over the Panama Papers, but there were a couple of casualties. The Icelandic Prime Minister went down over this. How do you feel when things like that happen as a result of your work?

GR: We think our job stops at revealing what we think is of public interest. That is the job of journalists, to reveal. It's up to society to react to those revelations. In Iceland you saw them surrounding the parliament house until the Prime Minister had to resign. You've also had resignations in Armenia and Spain, and right now there is huge political controversy in Pakistan and Malta.

We are doing our job, but I don't think we should go any further than that – we should not get into advocacy. We are doing that because we think it's a good story, we think it's a good issue that needs to be revealed – we are not pursuing it for any other reason.

ITR: I presume you have been following the trials of Antoine Deltour and Raphael Halet. They appealed the decision, as have Luxembourg, around their sentencing. How important is this case for whistleblowers in general?

GR: I think it's an important case. First of all, I think it is a disgrace that they have been prosecuted at all. One of our journalists is among those who were prosecuted, Edouard Perrin. The appeal also now applies to him.

We are now showing how valuable whistleblowing can be. Although, I think it has to be handled in an ethical matter with journalistic principles in hand, which we do. I do not think it would be appropriate for us to just dump all of the Panama Papers on the internet because not all of it is in the public interest. But when you do have a case like LuxLeaks, I mean come on! Of course it is in the public interest! The European Parliament has had an inquiry for almost 12 months into it, it is changing attitudes, it is changing laws. Why would you prosecute someone for doing that public good? It defies logic.

The Global Tax 50 2016
View the full list and introduction
The top 10 • Ranked in order of influence
1. Margrethe Vestager 2. The International Consortium of Investigative Journalists
3. Brexit 4. Arun Jaitley
5. Jacob Lew 6. Antoine Deltour and Raphaël Halet
7. Operation Zealots 8. Guy Verhofstadt
9. Theresa May (and the 'three Brexiteers') 10. Donald Trump
The remaining 40 • In alphabetic order
Kemi Adeosun Piet Battiau
Elise Bean Monica Bhatia
Allison Christians Tim Cook
Rita de la Feria Caroline Flint
Judith Freedman Chrystia Freeland
Pravin Gordhan Orrin Hatch
Meg Hillier Mulyani Indrawati
Lou Jiwei Paul Johnson
Stephanie Johnston Chris Jordan
Pravind Jugnauth Wang Jun
Jean-Claude Juncker Kathleen Kerrigan
Christine Lagarde Werner Langen
Jolyon Maugham Angela Merkel
Narendra Modi Will Morris
Michael Noonan Grace Perez-Navarro
Platform for the Collaboration on Tax Donato Raponi
Pascal Saint-Amans Heather Self
Robert Stack Tax Justice Network
The Gulf Cooperation Council (GCC) Transparency International
US Committee on Ways and Means Rodrigo Valdés






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