How a Cryptic Message, ‘Interested in Data?,’ Led to the Panama Papers

by Nicola Clark
New York Times
APRIL 5, 2016

PARIS — The leak of millions of private financial documents linking scores of the world’s rich and powerful to a secretive Panamanian law firm peddling in shell companies and offshore bank accounts began more than a year ago with a cryptic message to a German newspaper from an anonymous whistle-blower.

“Hello, this is John Doe,” the source wrote to the Süddeutsche Zeitung, a Munich-based newspaper that had worked on several investigations into tax evasion and money-laundering scandals. “Interested in data?”

“We’re very interested,” replied Bastian Obermayer, a veteran of several investigations into financial scandals.

In the months that followed, the confidential source fed Süddeutsche’s reporters a steady stream of emails, scanned letters, photographs and client data ripped from the servers of Mossack Fonseca, a Panama City law firm that has been dogged for decades by investigations into its suspected connections to money laundering. It was a trove that ultimately added up to 11.5 million individual files equivalent to 2.6 terabytes of data.

The German reporters worked for more than two months verifying that the documents were genuine and trying to unravel the complex web of secret transactions. “It became an addiction,” Mr. Obermayer’s colleague, Frederik Obermaier, wrote in an emailed response to questions. “We often messaged each other at crazy times, like 2 a.m. or 4 a.m. about the newest findings.”

But the sheer volume of data contained in the initial batch soon overwhelmed the German newspaper’s five-person investigations team. The paper turned for help to the International Consortium of Investigative Journalists in Washington, D.C., which has coordinated several previous global projects on financial data leaks.

Within weeks, the ICIJ had assembled an army of about 400 journalists from more than 100 news organizations in 80 countries, including The Guardian and BBC in Britain, the French daily Le Monde, the Sonntagszeitung in Switzerland, and L’Espresso, an Italian weekly newsmagazine. Many of the same journalists had collaborated with the center before on investigations into tax havens including the “Swiss Leaks” project in 2015 and the “Lux Leaks” series in 2014.

The ICIJ did not approach to The New York Times to participate. “This is an important subject, which we have written about ourselves, and continue to follow,” said Matt Purdy, a deputy executive editor at The Times. The leaked documents provide even more information, he added, and the work is to be applauded.

The media partners dissected the mountain of data that the Süddeutsche’s journalists received in several batches, each of which were forwarded to a secure ICIJ server. The project was code-named Prometheus, after the Titan from Greek mythology who stole the secret of fire from the gods.

Luke Harding of The Guardian, a former Moscow correspondent and a veteran of several international collaborations, including WikiLeaks in 2010 and the Edward Snowden leaks in 2013, said the constant stream of new material meant that reporters were regularly relying on each other to help them keep track of new details.

Unlike past projects, where the leaked data were provided as a “discreet, one-off leaks” of hundreds or at most thousands of documents, “this was in real time,” said Mr. Harding, whose team focused on transactions involving individuals with ties to President Vladimir V. Putin of Russia. “We were constantly getting new data.”

With such a large number of people trolling through the same database, the partners needed to agree early on with a common strategy for collaboration and for parsing out the research, as well as a joint promise to hold off on publishing until everyone was ready. The partners held a series of secret meetings, some of which involved more than 100 people. The first took place at a rented room of the National Press Club in Washington in June, followed by others in Munich, London and Lillehammer, Norway.

“The danger was always that if something happened in the world and the reporters in that country would get terribly excited and want to publish right away,” Gerard Ryle, the director of ICIJ, said.

About a dozen staffers at ICIJ, plus freelancers, devoted themselves entirely to the project, building the tools used by its partners while also preparing a dozen or so of its own stories on the leak. Mr. Ryle and his deputy, Marina Walker Guevara, were in near-constant communication with what had become a sprawling team.

“This was not a story where the documents were the whole story,” Mr. Ryle said. “You had to work for it, you had to go outside of the documents. You could see a window, but you had go out and look.”

The ICIJ made a number of powerful research tools available to the consortium that the group had developed for previous leak investigations. Those included a secure, Facebook-type forum where reporters could post the fruits of their research, as well as database search program called “Blacklight” that allowed the teams to hunt for specific names, countries or sources.

While the original documents were written in 25 different languages, most of the communication on the forum took place in English, with reporters actively sharing interesting tidbits with the relevant specialized teams. Each news organization took their own precautions, restricting access to the secure computers that were used to connect to the ICIJ’s servers and ensuring that these were not accessible through their newsrooms’ regular networks.

Once specific names were found in the database, reporters dug deeper for any clues that might connect those individuals with a shell company, a bank account, or an ever-widening cast of characters. Working in concert with a team of reporters out of The Guardian’s safe room, Mr. Harding uncovered a web of more than 100 complex international transactions that revolved around an offshore firm linked to a musician named Sergei Roldugin, who is one of Mr. Putin’s closest friends.

“We knew there was a link to Putin’s buddy,” Mr. Harding said. “We knew money was being sent offshore from Russian state banks and being recycled back into Russia” through the offshore company.

Late last year, he said, the teams ultimately managed to establish a connection between that firm and another that owned an upscale ski resort near St. Petersburg that is a favorite of Mr. Putin. Further reporting eventually revealed that the same resort was the venue for the secret 2013 wedding of Mr. Putin’s daughter Yekaterina news of which only surfaced last year.

“In the Panama Papers, there was no Swiss bank account” that could provide a clear money trail, Mr. Harding said. “But in Russia, where your daughter gets married says a lot about what places you hold dear.”

Other news organizations used the Mossack Fonseca documents to expose the offshore accounts of political figures in countries like France, Pakistan and Saudi Arabia, as well as several international film stars and sports luminaries.

By Tuesday, the disclosures had already claimed their first high-level political victim. Sigmundur David Gunnlaugsson, the prime minister of Iceland, announced his resignation after revelations that he and his wife were clients of the Panamanian firm.

“Many rich and powerful people who have accumulated a lot of wealth must be having a spasm of panic about now,” Mr. Harding said. “They are realizing that actually their banking secrets are not safe and email is not a private medium.”

“I think we are entering a new golden age for investigative journalism,” he said.

Nicholas Fandos contributed reporting from Washington and Ravi Somaiya from New York.

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