How we did Offshore Leaks China

A multinational team of journalists spent months combing through secret tax haven records revealing offshore holdings of China’s rich and powerful.

how we investigated offshore leaks chinaThe small group of journalists gathering in Hong Kong on a rainy summer morning had arrived from all over: Beijing, Taipei, New York, Madrid, Washington, Berkeley and Munich. 

A veteran Chinese journalist greeted the group and talked about the “historic” nature of the meeting: journalists from Greater China coming together to work on a highly sensitive investigation alongside colleagues from Europe and the U.S. 

The meeting kicked off a six-month probe into the offshore holdings of China’s elite that the International Consortium of Investigative Journalists begins publishing today with media partners from around the world. Along the way, the journalists faced cultural and linguistic barriers, government intimidation and the daunting task of sifting through thousands of secret financial records.

The Greater China files are the largest segment of the 2.5 million leaked offshore records ICIJ obtained and has analyzed with more than 50 media organizations since 2012. The documents reveal the real owners and the dealings of more than 100,000 companies in 10 offshore jurisdictions. 

The stories previously published in the “Offshore Leaks” series have had impact across the globe, triggering inquiries, resignations and policy changes in several countries. 

Due to the complexity and language challenges posed by the China, Hong Kong and Taiwan records, ICIJ set aside files related to those jurisdictions for a later installment in the series. 

With China continuing to step up media censorship, security quickly became one of the China project’s biggest priorities.  At the end of the Hong Kong meeting all project members returned to their newsrooms equipped with encryption for email communications. An encrypted online forum was used to swap findings and tips safely. Even within the forum, certain top officials were referred to using only previously agreed code names. 

The other challenge was the data itself. How to separate the extraordinary from the routine and find the public interest inside a maze of more than 37,000 offshore company holders? A first step was to build as many lists as possible of public figures: Politburo members, military commanders, mayors of large cities, billionaires listed in Forbes and Hurun’s rankings of the mega-wealthy and so-called princelings (relatives of the current leadership or former Communist Party elders). 

Through painstaking database work, a reporter in Spain cross-referenced the lists of notable Chinese against the names of offshore clients listed within ICIJ’s Offshore Leaks data. The added difficulty was that in most cases, names in the offshore files were registered in Romanized form, not Chinese characters. This made making exact matches extremely hard, because Romanized spellings from Chinese characters tend to vary widely: Wang might be spelled Wong, Zhang could be Cheung, and Ye might be spelled Yeh. Addresses and ID numbers helped confirmed many identities but many others names were dropped because the reporting team could not be 100 percent sure that the person was a correct match. 

A picture slowly began to emerge: China’s elites were aggressively using offshore havens to hold assets, list companies in the world’s stock exchanges, buy and sell real estate and conduct their business away from Beijing’s red tape and capital controls.

Among the offshore holders were at least 15 of China’s richest men and women, high-level executives at state-owned companies and relatives of some of China’s top current and former leaders.

Government intimidation

Then the reporting entered a new phase. Team members worked across several countries in Europe, Asia and the Americas to try to put these findings into context. Beyond the leaked files, the reporters combed hundreds of public records, including corporate filings, property records, financial disclosures, and documents produced by lawsuits and regulatory and criminal investigations. 

The small team juggled their extensive research, reporting and editing with hours on email, phone and Skype, working in multiple time zones and coordinating interviews in English and Mandarin. 

As with any cross-cultural team scattered around the world, good communication was a challenge at times. Also, editors in different countries had different views as to how much time their reporters should devote to work on the project versus their daily reporting obligations. 

Disturbing news arrived in November in the form of a short, encrypted message from an editor in Beijing. The note said that the reporters had been warned by government officials to discontinue their work in the offshore project. They had to pull out immediately from the reporting partnership. 

The intimidation of ICIJ’s partners came in the midst of a fresh government crackdown on Internet criticism, particularly allegations of corruption. According to the Committee to Protect Journalists, China imprisoned 32 reporters, editors and bloggers in 2013, earning the country the third spot after Turkey and Iran in the ranking of the world’s top jailers of journalists. 

At ICIJ headquarters in Washington, DC, the project leaders made a decision to keep the identities of the mainland Chinese reporters confidential to protect them from further government retaliation. 

Meanwhile, the rest of the team pressed ahead, sending letters to all government officials, wealthy individuals and others named in the stories. Their response in most cases was to not respond, a standard practice in China. 

On January 23 ICIJ will release the more than 37,000 names from China, Hong Kong and Taiwan on its Offshore Leaks Database, where online users will be able to explore the offshore networks of each person.

It is the first time that such a large amount of secret information about Chinese dealings in tax havens will be made available to the public

The Offshore Leaks database was first published in June 2013 but details about China, Hong Kong and Taiwan clients were withheld until the reporting was finished. The 37,000 offshore clients for Greater China is a conservative number because many names in the Offshore Leaks database are not linked to a particular address.  

ICIJ expects the public to explore the database and help ICIJ reporters find new leads and new connections as the story of China’s elite’s relationship with tax havens continues to unravel in the coming months. 

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