The Panama Papers: Breaking the Story of How the Rich and Powerful Hide their Money
Authors: Frederik Obermaier & Bastian Obermayer
Publisher: Pan Macmillan
In 2008, after the global financial crisis, Iceland was one of the worst-hit, with three of its banks collapsing and the country later going through a recession. As some overseas investors put in millions of dollars to buy into these banks during the crisis, few in that country imagined where the investment trail would lead to. That was exposed in April 2016, when Prime Minister Sigmundur Gunnlaugsson and his wife were found to have formed an offshore company in the British Virgin Islands with the help of a law firm in Panama to park millions of dollars and avoid taxes. He wasn’t alone. Senior cabinet colleagues of his government were exposed in the Panama Papers — an international collaborative project involving over 300 journalists from over 60 countries under the umbrella of the International Consortium for Investigative Journalists or ICIJ (it included The Indian Express).
It wasn’t only in Iceland that lawmakers, the rich, crooks and druglords were gaming the system. In Russia, Vladimir Putin’s close associate, a cellist, was the conduit for funneling away millions of dollars through offshore firms structured by law firms such as Mossack Fonseca. In China, too, it extended to some of the political elite — a man much celebrated for developing a port city and his wife were found to have used a British businessman to invest money abroad. The probe by the journalists, who waded through millions of documents and then followed up with painstaking fact-checks on the ground threw up more influential names — the President of Ukraine who worked through a Cypriot middleman, British PM David Cameron’s father who ran an investment fund, footballer Lionel Messi, the FIFA, the Syrian connections of Assad and scores of wealthy individuals in many countries, including India.
The story of how all this unfolded — the challenges in deciphering millions of documents and data sets, cross-checking them and maintaining secrecy — is fairly gripping. For Bastain Obermayer and Frederik Obermaier, the break came from an anonymous source: “John Doe”.
The two go on to narrate how over 2.5 terabytes of data was shared with them. It is not just the size of the data which posed challenges. In an investigative journalistic project like this, how does one keep away spooks? That meant spending on an expensive laptop and then deactivating the wireless local area network or WLAN to ensure that it was secure from hackers. Once connected to the internet, they reckon that intelligence servers could hack into a system which has been connected to a new LAN. All hard drives were encrypted and all external hard drives stored in a safe with special security measures; the computer was chained down to prevent anyone walking off with it!
The book also throws a lot of light on the shadowy world of tax havens and law firms which specialise in helping the rich and the powerful stash away their ill-gotten wealth. It highlights the role of some of the most powerful banks in the West, which have helped their wealthy clients dodge tax and funnel away money in the form of consulting services with few questions asked. Thankfully, the outrage that all this sparked off after the global expose has led to greater scrutiny both in rich nations, and back home in India too.
Ultimately, the success of this global collaborative investigative journalism project will hinge on closer cooperation between countries in exchanging information on cross-border fund flows and making laws far more stringent, or, as the writers say, criminalising the act of providing false information.
This should interest the Narendra Modi government, which has promised to address the challenge of black money. At stake also is the issue of income equality, with the potential loss of billions of dollars through flight of funds having a great impact a country’s growth.