In early 2015, Bastian Obermayer and Frederik Obermaier, German journalists working with the newspaper Süddeutsche Zeitung, received a message from a “John Doe.” ”Interested in data?,” the message asked. “We're very interested, of course,” Obermayer replied. The data that followed turned out to be one of the biggest leaks in history. The source had access to the records of a Panamanian law firm and corporate service provider, Mossack Fonseka. The firm specialised in creating offshore entities for its clients—wealthy individuals or prominent public officials from across the globe. Though such business entities are not always illegal, the leak revealed that they were used for illegal purposes—tax evasion, fraud, and evading international sanctions, among others. The Papers illustrated how the rich were able to keep their personal financial information private and beyond the reach of the law.
Obermayer and Obermaier shared their information with various publications, resulting in a year-long investigation into the data, spanning 80 countries. By the end, the Papers amounted to 11.5 million documents detailing the information for more than 214,000 offshore companies. The Panama Papers leak broke in April 2016, causing ripples across governments and organisations. Among the people named in the leaks were the Icelandic prime minister Sigmundur Davíð Gunnlaugsson, who later resigned his post; Ian Cameron, the father of the British prime minister David Cameron, and public figures such as the filmstar Amitabh Bachchan and the football player Lionel Messi.
In the following excerpt from the book, The Panama Papers, an account of the investigation into the leak, Obermayer recounts the day that “John Doe”—the whistleblower, who remains anonymous even to the journalists—first reached out to him, and how he and his colleague verified the data.
“Ping.”
My wife, our children and I have been at my parents’ for three days, and for the past two days everyone’s been ill. Everyone except me. It’s ten o’clock in the evening, and having stroked the last patient and handed out the last cup of tea, I sit down at the dining table, open my laptop and put down my smartphone next to it. Then there’s a “ping.” A new message.
[john doe]:Hello.
This is John doe.
Interested in data? I’m happy to share.
(In order to protect our source, parts of the indented, arial exchanges that would endanger our informant have been abbreviated in this book or else reproduced with minor alterations that do not distort their meaning.)
“John Doe” has been in use in Great Britain for centuries and is also common in Canada and the United States. People whose true identity must be protected in court are called “John Doe,” as are unidentified corpses. “John Doe” has also long been used as a name for bands, TV series and various products.
So “John Doe” is a cover, another term for “Joe Bloggs.” But this “Joe Bloggs” is obviously offering secret data. Investigative journalists are genetically programmed to prick up their ears at this kind of offer. Secret data is always good news. At the Süddeutsche Zeitung we’ve published lots of articles based on leaked data in the past three years. Offshore Secrets was about tax secrecy in the Caribbean, the HSBC Files tackled secret Swiss bank accounts and the Luxembourg Tax Files revealed Luxembourg’s dodgy tax schemes. The mechanism is always the same—a large volume of secret data flows out and ends up in the hands of journalists. If the volume of secrets is large enough, it is, statistically speaking, almost bound to contain some good stories.
Also, journalists often spend weeks, sometimes even months, chasing a special source. So if a potential source comes to you, you need to react fast. Or at the very least you need to react: there’s almost nothing more annoying than finding a story in Der Spiegel or Die Zeit that you were offered first.
[Obermayer]: Hello. We’re very interested, of course.
You can immediately tell the worst sources—bad sources, or at any rate crazy or confused ones—from their emails. Crazy people do sometimes have good stories, but it’s the exception rather than the rule.
The advantage with data is that it’s not self-important or verbose. It doesn’t have a mission and it isn’t looking to deceive you. It’s simply there, and you can check it. Every good dataset can be collated with reality, and that’s exactly what you must do as a journalist before you start to write. At some stage you also have to consider very carefully which part of the data you’re going to exploit.
That’s the difference with WikiLeaks. The coordinators of that whistle-blowing website simply posted data on the Internet without any journalists filtering the information. That was the basic idea –and not a bad one at that.
Obermayer]: How would we get the data?
[john doe]: I would like to assist but there are a couple of conditions.
You need to understand how dangerous and sensitive some of this information is. My life is in danger, if my identity is revealed. I’ve spent the past several weeks considering how to handle this. We will only chat over encrypted channels. No meeting, ever. The choice of stories is obviously up to you.
I can live with those conditions. Journalists obviously prefer to get to know their source to be able to gauge what they’re like and understand their motives, but for the informants it’s often better to remain in the shadows. Whistle-blowers aren’t particularly well protected, even in Germany, and every single person who knows an informant’s identity is a potential risk—even, or perhaps especially, if that person is a journalist.
However, the source communicates clearly and concisely, and I can do the same. This someone has obviously got something they want to get rid of, and they want to give it to me.
[Obermayer]: So how to proceed?
I send the person my contact details for further encrypted communications.
In the subsequent exchanges we agree on how the transfer will take place, and I can expect to receive a first sample soon via an encrypted channel.
The source doesn’t ask for money—a good sign. A few months earlier someone had got in touch with me claiming to have records of secret foreign bank accounts belonging to a German political party and supposedly containing $26 million. Our conversation went back and forth for a week, poor-quality photos of bank documents were sent, absurd telephone calls ensued, and then, over the phone, the person suddenly demanded cash.
The fact is that the Süddeutsche Zeitung never pays for information, not only because we don’t have the money, but primarily on principle. This also reduces people’s temptation to fob us off with fake documents. We just have to be able to stomach reading stories we were forced to pass up in other newspapers. However, the story of the secret party account appeared neither in Der Spiegel nor in Stern: if they were ever offered the documents, our colleagues must also have judged them to be fakes.
“Ping.”
The sample has arrived: a big bunch of documents, most of them PDFs. I open the files on my computer and analyse them, one by one. There are companies’ articles of incorporation, contracts and extracts from databases. It takes me a while to grasp the links between them, but after a quick internet search I can situate the case. The location is Argentina. A public prosecutor, José María Campagnoli, suspects that shady business people had helped the Kirchners—i.e. the then president Cristina Kirchner and her late husband Néstor—to smuggle around $65 million out of the country. This theft was allegedly conducted via a labyrinthine system of 123 shell companies, all of them set up, predominantly in the US tax haven of Nevada, by a Panamanian law firm called Mossack Fonseca. Nevertheless, none of the accusations have as yet been proved, and Cristina Kirchner disputes the accuracy of the allegations.
What makes the case topical is that there is pending litigation in the United States. Directed by its founder Paul Singer, the investment fund NML had bought millions of dollars’ worth of Argentinian government debt – and then the country went bankrupt. Most creditors agreed to debt relief, but not NML. The fund is filling lawsuits around the world for the seizure of Argentinian state assets. It has even had an Argentinian warship impounded off the coast of Africa. Warships are valuable and can be sold off.
The goal of the current lawsuit in Nevada, USA, is to force the disclosure of this network of shell companies. NML wants Mossack Fonseca to surrender all documents pertaining to the 123 shell companies. I have some of those files in front of me on my screen right now, documents that NML has been chasing in vain for years. One thing jumps out at me: the payments run into millions of dollars.
The papers show the transfer of $6 million into a Deutsche Bank account in Hamburg. The accompanying contract raises further questions: it’s a commission on a gambling deal.
Two other files name the real owners of two of the firms whose documents NML is seeking to obtain. These two files would constitute a huge leap forward in the case.
The interesting thing is that all the documents appear to originate from the same law firm. I’m familiar with Mossack Fonseca, but only ever as an impenetrable wall, a black hole. Every time our research led us to this law firm, it spelled the end of the investigation. Mossack Fonseca is one of the largest providers of anonymous shell companies and is not exactly famed for being fussy about its clientele; quite the opposite, in fact. In plain English: while many of its clients are doing nothing illegal, some of the world’s biggest scumbags have used Mossack Fonseca’s anonymous off shore companies to disguise their business dealings. During the Offshore Secrets and HSBC Files investigations we came across convicted drug kingpins and suspected traders of blood diamonds who had used companies established by Mossack Fonseca for camouflage purposes. Search the Internet for Mossack Fonseca’s clients and you will also find accomplices Gaddafi, Assad and Mugabe allegedly working hand in glove with the Panamanian law firm.
Please note that I say “allegedly,” as Mossack Fonseca denies any association with these people, and its client list is confidential. So far, at least.
This an excerpt from The Panama Papers: Breaking the Story of How The Rich and Powerful Hide Their Money, published by Pan Macmillan India.