The Panama Papers effect: An adaptation from Secrecy World

How can the world break through of secrecy of the offshore world?

Jake Bernstein was a senior reporter for ICIJ in the 2016 Panama Papers investigation. He has published a book about the evolution of the offshore world and efforts to break through its secrecy as seen through the Panama Papers. Below is adapted from the book, Secrecy World: Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite.

In May 2015, Michael Hudson, a senior editor at the International Consortium of Investigative Journalists, let me know that ICIJ had launched a project for which I might be a good fit. He couldn’t reveal the details on the phone. Instead, he encouraged me to travel to Washington, D.C to meet with Gerard Ryle and Marina Walker Guevara, ICIJ’s director and deputy director.

On the walk to lunch, Ryle told me about Prometheus, the codename for a massive data leak ICIJ was in the process of receiving. The material afforded an unprecedented view into a secret world of hidden money. It had the potential to topple governments.

This would be ICIJ’s fifth offshore leak investigation since Ryle had taken the helm of the organization.

In the past, media exposés of the offshore system tended to be localized, dependent on a small number of internal documents, the testimony of whistle-blowers, hidden camera interviews, or legal filings. An inability to look at the system comprehensively made reporting difficult, if not perilous. Secrecy laws and incomplete information hog-tied journalists who tried to expose offshore wrongdoing. Lawsuits and public ridicule frequently followed publication. A partial picture allowed critics to dismiss findings as anomalies rather than patterns.

Dateline Munich: Journalists team up Image: Kristof Clerix

Ryle and ICIJ helped change that. When Ryle arrived at ICIJ in 2011, he brought with him a hard drive bulging with leaked offshore data. This first project, known as “Offshore Leaks,” reverberated throughout the world when it was published in 2013. The ICIJ website received more than six hundred thousand page views in a single day, a record for the Center for Public Integrity. The team had exposed an underground financial system that everyone knew existed but had never seen. In an age of austerity, it was now incontrovertible that many of the world’s richest citizens were not paying their fair share. China Leaks, Lux Leaks and Swiss Leaks followed in quick succession.

By meal’s end I was on board, not realizing this new leak – soon to become the Panama Papers – would consume my life for more than two years.

I found myself working with some of the best investigative journalists from around the world exploring the files of the Panamanian law firm Mossack Fonseca. Most of the journalists already knew one another from previous ICIJ collaborations. They had learned the art of collaborative journalism through trial and error. Readers only saw the successes, scarcely realizing the mountains that had to be surmounted to reach the published page or newscast.

My new colleagues were open and helpful and as excited by the material as I was. We were united by a common purpose and a shared creed. We all believed we were toiling in the public interest. The material we uncovered was information an informed citizenry needed to have.

In the first twenty-four hours of the publication of the Panama Papers, ICIJ’s website received more than six million page views.

Throughout the world, the publication of the Panama Papers fed into attacks on journalists and preexisting political and social dramas in various countries. Reporters and editors wrestled with what part of the data was in the public interest. In Europe and the United States, the dominant concern was taxes, and people evading them. In Latin America and Africa, tax was a vital issue, but it took second place to concerns about corruption and political repression.

It wasn’t until Jürgen Mossack turned on the television and saw his life’s work on every news channel that he realized the dimensions of what had just occurred. Fonseca grew ill and largely took to his house for a week. Two days after the first stories dropped, he formally resigned from his position with the Panamanian government. Mossack, who was due to become the president of the Rotary Club, withdrew his name from consideration.

In Venezuela, the Communication Ministry sent a lengthy communiqué to the country’s media advising them not to publish stories about the Panama Papers. Chillingly, the memo also singled out by name Venezuelan reporters working for independent media organizations that had participated in the project.

In Ecuador, President Rafael Correa denounced the project participants on Twitter and rallied a troll army to send them a message. He helpfully included the reporters’ social media accounts, which were then deluged with nasty comments. A dozen or so government supporters demonstrated outside El Comercio and El Universo, the two newspapers involved in the project.

As part of his efforts to rein in the media, Correa had spearheaded the creation of the Orwellian-named Citizen Participation and Social Control Council a few years earlier. The council sent a letter to the newspapers demanding that the reporters appear before it on Monday, April 18, to hand over the Mossack Fonseca data and respond to questions. The reporters sent a letter the Friday before the meeting declining to appear and explaining that they did not have the data, ICIJ did. A showdown appeared imminent. But on the intervening Saturday, a 7.8 magnitude earthquake devastated the country. As the focus of the media and the government turned to the victims and the damage, the Monday meeting was quietly forgotten.

In Hong Kong, the indomitable Yuen-Ying Chan had lined up multiple partners for the project, meeting them separately in isolated spots around the University of Hong Kong before bringing them all together. In the individual meetings, she told them about the data and solicited commitments to collaborate. The collaborators included Ming Pao, CommonWealth Magazine, and the South China Morning Post. Once again the mainland Chinese government blocked the information.

The day after Ming Pao devoted its entire front page to its Panama Papers findings, the executive chief editor, Keung Kwok-Yuen, was fired. The paper’s owners cited cost cutting to explain the decision, but the staff was unconvinced. Hundreds of reporters, editors, and free- speech activists rallied outside the building in protest. It was dubbed the “ginger protest,” because many demonstrators held up pieces of the vegetable, the name of which in Cantonese sounds like the editor’s surname.

In the months ahead, Mossack Fonseca slowly dissolved, dropping from six hundred employees to eighty, while wrestling with long-overdue vetting of existing companies. The revelations and impact from the files continued as well. In 2017, the Supreme Court of Pakistan forced Prime Minister Muhammad Nawaz Sharif to step down over revelations his family held pricey London real estate through offshore companies. Attacks on journalists escalated, most tragically in the horrific assassination of Daphne Caruana Galizia, a well-known Maltese anti-corruption blogger and mother of an ICIJ staffer.

Less than three weeks after her brutal murder, ICIJ and its members published the Paradise Papers. The work continues.

Adapted from Secrecy World: Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite, to be published by Henry Holt on November 21.

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