Update 2:23pm ET: We're going to signoff and return to our day jobs, but if you have a question, please leave it for us below! We're going to pop back in periodically over the next few days and will try to answer anything we can. Thanks, everyone!

The International Consortium of Investigative Journalists (ICIJ) recently published a massive leak of documents connected to Panamanian law firm Mossack Fonseca. The trove of papers has blown open a window on the vast, murky world of shell companies, and has provided an extraordinary look at how the wealthy and powerful conceal their money.

Several McClatchy journalists joined more than 370 journalists from 78 countries in the largest media collaboration ever undertaken following a leak.

For further background on the Panama Papers: http://www.mcclatchydc.com/news/nation-world/national/article70324002.html

http://www.miamiherald.com/news/local/article70347537.html

Answering your questions today are:

  • Tim Johnson, National Security Reporter, McClatchy DC Bureau, Twitter: @timjohnson4

  • Kevin Hall, Chief Economics Reporter, McClatchy DC Bureau, Twitter: @KevinGHall

  • Nicholas Nehamas, Real Estate Reporter, Miami Herald, Twitter: @NickNehamas

Proof: https://twitter.com/McClatchyDC/status/719564503063609344 https://twitter.com/MiamiHerald/status/719531271903436800

Comments: 257 • Responses: 77  • Date: 

two_off146 karma

Why is there a lack of reporting on North Americans named in the Papers?

McClatchy_journos135 karma

Kevin: I am not sure why there's a perception of lack of Americans, there are many, they're just not of the stature of the prime minister of Britain. We have more coming out in coming weeks, and there is plenty that was in there but just not enough to get over the finish line. And I would note we are cautioning that higher profile Americans might still be in here, because most of the older data allowed a much greater degree of anonymity, so in many case we don't know. but there are plenty of Americans in these docs for plenty of reasons

alphakamp28 karma

You seem to know of other americans in these docs. If so why haven’t you released more?

McClatchy_journos87 karma

Nick: Because many of them haven't been accused of misdeeds or are not otherwise noteworthy.

We are focusing our reporting on people who misused or have been accused of misusing their offshore companies, or are otherwise tied up in alleged wrongdoing. That was true whether the person was American or foreign.

There are many legal reasons to own an offshore company.

alphakamp24 karma

The dig for noteworthy seems to have started with non american entities. What is the protocol for deciding what entity’s exposure is valuable.

McClatchy_journos54 karma

Tim: Ramon Fonseca, one of the founders of the firm, told AP earlier this week that he has never really liked dealing with Americans. I think the firm was leery that it could come into the limelight and draw attention from the DOJ. On first, second and third glance, there is little doubt that the data is full of foreign names and companies.

McClatchy_journos56 karma

Kevin: I'd add to Tim's comments that we found emails where it was clear they filtered all US customers, fearful they could be IRS or some other agency. To the contrary, we were obviously most interested in Americans in the files and did our best to dig it out. But I spent a lot of time looking at foreigners who set up shells in the US to hide assets abroad, and Tim was based in Mexico and looking at that country and CentAm, from where everything from drugs and immigration to good governance or lack there of dot the bilateral relationships. The world is gray, not black and white, and we tried to hit on as many angles and possibilities as possible. There's been this murmuring that someone we were out to get Russia, au contraire, the Russian data was simply the richest, with a level of detail that simply didn't exist in most other offshores.

letsgodevils12346 karma

Do you think these documents can have a major effect on the presidential election? Have you found any clear links to any of the candidates?

McClatchy_journos63 karma

Kevin: I think there has been deafening silence on CapHill, and only Sanders has ventured as candidate to opine on the docs. It might come up in the coming Clinton-Sanders debate. I'd like to see more discussion from Hillary C on how the offshore world undermines State Dept efforts at promoting democracy, transparency etc. Look at Brazil, which had looked to be turning the corner but instead now finds politicians across the spectrum with secret shell companies.

letsgodevils12311 karma

Follow up question, what was the coolest(surprising or memorable) link or name you saw?

McClatchy_journos30 karma

Kevin: Some surprises: having worked in LatAm much of my professional life, would have expected more Mexican money in there, particularly in places like Cancun that are thought to be built partly on cartel money etc. Would have also expected more along the Triple Border between Argentina, Brazil and Paraguay.. most major criminal orgs there, Hezbollah active there. In terms of names, nobody expected godfather of Putin's daughter_ Sergey Roldugin

bschott00752 karma

For Frederik Obermaier, 32, an investigative journalist at the German newspaper behind the Panama Papers leak, the main revelation of the world’s largest-ever document dump was that the biggest names among those secreting their riches away in tax shelters were not necessarily residing in the most historically shadowy corners of the globe but were “everywhere.”

Yet among the hundreds of Americans revealed in the Panama Papers—which arrived on the desk of his colleague Bastian Obermayer (no relation) at his Munich-based newspaper, Süddeutsche Zeitung, just over a year ago—there were none of the bold-faced names you might expect, he tells Newsweek.

“There’s not anybody like [President Barack] Obama, no Hillary [Clinton] in the data and no Donald Trump,” he says. “Everyone should be aware, there are American names in the data, but they are not as big or prominent in the U.S. as elsewhere, because you have so many companies inside the U.S. who will set up tax shelters, Americans don’t have to go to Panama. But there are still plenty of Americans in the data, and you’ll be hearing more about this in the days and weeks ahead.”

McClatchy_journos30 karma

Kevin: seconding that, we continue to move stories in days and weeks ahead that further flesh out Americans in the data. Again, the idea of an offshore is often to mask purposes so it obviously takes work to flesh out why some people are setting them up. Just because they are in there isnt reason enough to write about them

freediverx0123 karma

Please check for Martin Shkreli.

McClatchy_journos3 karma

Thanks for the suggestion. I looked for him this morning. He's not in the data. Anyone else come to mind?

letsgodevils1233 karma

I was asking more about links that can be made between some of these bigger names, Ik many americans big name do not show up.

McClatchy_journos12 karma

Kevin: We continue to work on some names that might be larger, time will tell. And most of our searching has been on names and people and places, and less on complex financial entities with global tentacles. as the more obvious places are addressed, we and partners can then look at more complex relationships. As you can imagine, it would take more than a lifetime to read every doc here so we have to be humble about what we think we know.

bschott00732 karma

Considering the size of the leak is so massive:

  • How hard has it been linking names of those in the papers who are relative nobodies to the rich and powerful?

  • Has the Web of interconnected shell companies proven difficult to unravel?

  • Have you run into any Shell companies which deal with shell companies not listed by more than a name in the documents? I.E. companies which are administered and handled by law firms other than Mossack?

  • Big Question: Do the number of American-owned or American-intermediaries controlling shell companies via Mossack decrease after the 1980's invasion of Panama?

  • Is there any correlation between the number of American shell companies and the Free Trade Agreement between Panama and America?

Btw: sincerely thank you for this work you are doing.

McClatchy_journos46 karma

Tim: These are really great questions. On your third question, I've seen shell companies that control other shell companies that in turn control other companies. It's crazy. If you're really intent on hiding dirty money, you create as long a chain as possible. In one case, I saw a plan for a Mexican businessman that would've created a shell company in Delaware, a trust in Holland, a shell company in Romania and maybe a stop in Malta. Penetrating all those shells is really difficult. If countries do not want to cooperate with U.S. Treasury agents and IRS officials, then it is very difficult for the Justice Department to carry out successful prosecutions. There was an Austro-Venezuelan man who was arrested in S Florida last year and charged with money laundering. All charges were dropped in December (I believe it was then) and it was probably because some foreign jurisdictions didn't cooperate. You can't prosecute successfully if you don't have bank records.

McClatchy_journos21 karma

Kevin: On the big question, the older docs say pre 2006 have far less clarity of ownership because global rules required almost nada. You also had bearer shares, which allowed unidentified people to hold shares on behalf of third parties. Disclosure only came if law enforcement comes asking but how would said agencies even know to look for these bearers, and internally the docs shows that MF often found little info on true owners when it looked. As you can imagine, when you are looking through data 10 hours a day for eight months there is tons left on cutting room floor but it was shocking how little the company often knew about its customers.

McClatchy_journos11 karma

Kevin: On the FTA question, have to say I dont quite know the answer but trade agreements are about ... trade... in this case may market access for service providers such as MF might have been addressed, but finance generally is not in such trade deals

AgoraiosBum8 karma

Are the 'bearer shares' similar to the bearer bonds that are part of the plot in Die Hard?

McClatchy_journos13 karma

Nick: yes! They are owned by whoever holds them. Most jurisdictions have banned them because they are so useful for money laundering.

McClatchy_journos10 karma

Kevin:Continuing on the first two questions, separating the nobodies from the somebodies is a tedious task. the more you are in the data the more you can distinguish. you know red flags, such as someone who changes registered agents or domiciles every couple of years. A company that goes to NIEU or non-American Samoa probably a red flag too, you look for anomalies. on the interconnection, yes interconnection has been nightmare. we all use a good software tool that helps mapping relationships but MF seems to have used some shells as a member/director on hundreds of shell companies in Nevada or other places, making true owners even harder to find.

McClatchy_journos10 karma

Nick: great questions!

1) Some of the people in the papers did use nobodies or "straw men" to stand in for them. But many powerful people did not do that and listed their own names, wrongly assuming that the information would never be made public

2) This was a very difficult part of our process. Sometimes we would find a Delaware company owned by a BVI owned by a Samoa company etc. But the documents listing the "beneficial" owners of each offshore entity helped us crack the real ownership structure.

3) Yes, other firms pop up in the documents, usually when Mossack resigns as registered agent or takes over for another company

4) That is a good question. I didn't look at that but perhaps one of my colleagues did. I have heard that Panama is not a popular destination for Americans in part b/c of the long history between the two countries. Also, several American states offer companies with just as much secrecy as Panama

5) Another good questions that I don't know the answer to. Colleagues?

Thanks for your kind words.

isahammyasandy13 karma

The political backlash from these Panama Papers has already been tremendous with Iceland's PM stepping down, and now the light being shown on PM Cameron. Reactionary responses are natural and should be expected, but they don't solve the bigger at hand. My first question is, in your opinion what changes to our system need to be put into place to avoid these shady tax haven situations in the future? Second, and (arguably) more importantly... is a hamburger a sandwich?

McClatchy_journos22 karma

Kevin: Second question first, a hamburger is also someone from Hamburg. hope that helps. First question, I think as one of our follow up stories suggested, simple requirement of a repository somewhere that lists the true owners of shell companies. It's just so easy to create these with virtually no disclosure of ownership

McClatchy_journos9 karma

Nick: yes, transparency groups have long called for beneficial owners to be public. The EU is now building a centralized database of beneficial owners.

Hamburgers are not sandwiches. Do people really believe that?

CyanidePlague12 karma

Where can we find a list of the accused?

McClatchy_journos28 karma

Tim: Hi u/CyanidePlague. Love that username. The International Consortium of investigative Journalists (ICIJ) controls the database of the archives. The Consortium has made the decision not to put the archives online. That's because it's a massive amount of data that includes bank records, passports, credit card numbers and lots of personal information. Considering that many clients of the Panama law firm may be conducting business that is entirely legal, ICIJ decided it wouldn't be wise to put it all online. It could expose clients to credit card fraud and other harassment. That said, ICIJ will make a list public in May of offshore company owners, and perhaps some other data.

CyanidePlague8 karma

Then how did they decide who was up to no good and only release some (albeit higher profile) names? Shouldn't anyone and everyone who was using the firm for illicit purposes be exposed? Edit: By the way, thanks!

McClatchy_journos11 karma

Kevin: We started with the assumption that just because you are in here doesn't mean you are up to no good. there are plenty of legitimate reason you might have a shell company. we found some folks who were retirees buying small properties in say Costa Rica to retire etc. We also found people with hundreds of millions of dollars associated to their name, and they have no Internet footprint. We can't just publish their name because they have privacy rights, and we continue working on some of those folks. But it was pretty obvious who we'd highlight since many were convicted or indicted and then you'd find that it took MF years before they were ever even aware.

SpackleButt1 karma

Aren't you afraid without that transparency you will be accused of hiding high profile names from the public? Why not just release a list of the individuals involved and leave out the personal details?

McClatchy_journos5 karma

Tim: As I think we mentioned earlier, ICIJ will be releasing lists of names and offshore companies sometime in May. Am I worried that people will believe we're hiding high-profile names from the public? Not in the least. High-profile names would make for hot news stories. We're red-blooded journalists. We live for these kinds of stories.

tiamdi8 karma

So now that Panama has been exposed, are there any efforts currently underway to investigate long known offshore holding companies in places like the Cayman Islands?

McClatchy_journos18 karma

Tim: As I said to another question, we're still up to our necks in Mossack Fonseca data. If we had access to data on places like Cayman Islands, we'd probably go for that, too. Mossack Fonseca did not register many companies in Caymans that I could determine. Caymans are probably far more favored by Americans over Panama just because the islands are closer, English is the language and you can get to beautiful coral reefs in about, oh, 15 minutes.

McClatchy_journos10 karma

Kevin: I'd add to Tim's comments that one reason Americans might favor the Caymans over Panama, beyond the language issue, is that the Bahamas and Cayman Islands have a large infrastructure built up around the offshore business. kind of like why normal corporations set up in Delaware, case law established in courts there etc.

Jivatmanx7 karma

It seems likely that there will be immense pressure from authorities to have access to these documents, with a bunch of articles saying they are 'Chomping at the bit' to get it and calling it a 'Bonanza' and whatnot. Will you provide it? What if there is legal action against you to provide it?

If you provide it, will you claim any of the reward money the IRS offers, which is up to a remarkable 30%, which would seem to be enough to make all you you journos billionaires.

McClatchy_journos13 karma

Tim: Sure, there's pressure now. But there wasn't much pressure a few weeks ago. The US Treasury Department didn't really want to talk about the issue of offshores with us. Now that it is all over the newspapers and internet, governments seem eager to pile on because of public unhappiness. I know some of the archives have been shared by the leaker with a few foreign tax services. As far as legal action against reporters. I doubt that will occur. The database is kept by ICIJ, not by the 370 journalists around the world who actually sifted through the data. I know ICIJ has taken rigorous action to protect the archive. What do you think? Should reporters be subject to legal action?

McClatchy_journos3 karma

Tim: By the way, if we were looking to collect rewards and become billionaires, journalism would not be our field. But for others, that reward money could be quite a temptation...

Bieterman7 karma

A recent interviewee on NPR (can't remember the source) mentioned that in her opinion (being someone with almost a year of searching the archives under her belt) - we have yet to really even scratch the surface of the information this archive holds.

Specifically, she mentioned that once people who are able to bring innovative methods of dot-connecting and investigating to the table, much more may come to light.

How can people experienced in audit, data analysis, etc., who are not necessarily investigative journalists, help in the work yet to be done?

McClatchy_journos8 karma

Kevin: Great question. One place, I would think, is if you have a person or company locally that is international in scope and not necessarily a beacon of openness, look at their SEC filings (if they are publicly traded) and search for shells, trusts and foundations. Search those against Internet footprint and see if they link to some of these less open offshore locales. That's just a thought.

Bieterman1 karma

Follow-up: Can you corroborate her (NPR Interviewee #36792847763's) assessment of the situation?

McClatchy_journos6 karma

Tim: It's really hard to know how much we still don't know. What percentage of the data has actually been seen by ICIJ-affiliated journalists? I have not a clue. But the 370 journalists doing the looking is quite a significant team. Data analysis might be helpful but also I think human analysis looking at links and trends has also been valuable.

McClatchy_journos5 karma

Kevin: Not sure what you are asking us to corroborate, if it is the scratching the surface and dot connecting we have just scratched the surface, remember most of these don't show the underlying use/money... and of course following the money is where we all try to go.

Zomblovr7 karma

Have you guys received any credible threats or warnings to not release certain information?

McClatchy_journos4 karma

Tim: Without naming names, we had lawyers for several Americans we wrote about attempt to intimidate us before publication. Our own lawyer looked carefully at everything we published and we feel that we are on safe legal ground. Since the groundswell around the world, the lawyers for people mentioned in the documents have largely remained silent.

Dranx5 karma

Do you think this leak and the public outrage world wide that followed will spark more leakers, potentially from a firm with a large American presence? Or is that just a pipe dream and this leak is a once in blue moon fluke?

McClatchy_journos9 karma

Nick: I think the emergence of these monster leaks are one of the most interesting developments to happen in journalism in the last few years. This is not the first one ICIJ has handled. See Swiss Leaks for another leak with big impact.

I think companies that are hiding secrets or illegal activities in their data should be very nervous from now on. This is just the beginning...

Jorhiru4 karma

Within the context of the leaked data, and the process of combing through it, has there been a sense that this is just a (relatively small) piece of a much larger industry and practice? In other words, is Mossack Fonseca just one of multiple options for their clients, and if so, is there some sense as to why they were chosen over some other entity acting in the same capacity?

EDIT: Typos

McClatchy_journos8 karma

Tim: Very hard to know. So much of the data are mundane things, airline reservations, receipts and email chains. Just digging through the weeds of the data very time consuming. I've not run across an email yet that says something like: Mr Mossack, sell me on your services. What do you offer that other corporate service providers don't? Who are your biggest competitors and why are you better?

McClatchy_journos6 karma

Kevin: Good question, yes MF is one of many options, in Panama and around the world. From what we've heard from people in the business, it wasn't known as the clean shirt and I think the parade of bad actors confirms that. How much worse is it than competitors, hard to say. I think most of the regulatory/enforcement focus has been on banks, and I think formation agents and similar "service" providers have escaped scrutiny. Treasury's FINCEN has reach over banks but as it is quick to point out, at times forcefully, it has no jurisdiction over registered agents. I'd point you to the end of 60 Minutes piece earlier this year that sought to open companies for a fake African dictator and some high profile figures in the American Bar Association didnt immediately turn away the proposed business.

Jorhiru2 karma

Very fascinating - thank you so much for the reply, but even more for your efforts! It looks like you are referring to Steve Kroft's "Anonymous, Inc." which aired at the end of this last January; I'll check it out. Thanks again!

McClatchy_journos2 karma

Kevin: Yes that's the one, we held our breath, afraid our information had been shared elsewhere but alas they had a difference focus. good piece and great ending, called a kicker in the news biz

McClatchy_journos5 karma

Nick: Yes, there is no doubt we are just scratching the surface of this industry. There are at least four other firms that are just as big as MF, if not bigger. If we had access to their data, we would likely have another year's worth of stories to tell.

Flakmoped2 karma

Would you reckon these four others are destroying said data after the leak?

McClatchy_journos4 karma

Tim: Frankly, I wouldn't know. But certainly they are trying to build a firewall around their servers. They may also be suffering from some gastric distress.

bloggingsbyboz3 karma

1) Any thoughts on Panama President Varela's op-ed in the NYT today? Do you agree with the name Panama Papers or do you think they should be otherwise branded? Is Panama working to improve?

2) Any thoughts on reporting on Mossack Fonseca's competitors? They are only one of a dozen important firms in Panama doing this sort of work. Is the standard take you hear that they are the worst in terms of the sorts of clients identified? The best? Average?

McClatchy_journos7 karma

Tim: Yo Boz! I think Varela is trying to put a good face on things. Panama has had ample time to tighten up regulations and has still been considered only partly cooperative, although same could be said of places like Wyoming, Delaware and Nevada. Panamanians are angry about #panamapapers as hashtag. Did you see that Ruben Blades wrote a little Facebook essay about how Panama as a country was getting smeared by this? As far as competitors, we are still hip deep in the Mossack Fonseca data and maybe tied up for a long time on those files. I'm sure competitors would also have interesting files. Know where we could get a peek at those?

running_dog3 karma

Thank you for doing this. Can you enumerate some of the legitimate reasons for holding this type of account? I can think that a business may want not to alert competitors that it is entering a market, but can't think of any others.

McClatchy_journos3 karma

Tim: I can think of three legitimate reasons right off the bat. A major well-known corporation, let's say Disney, may want to build a new theme park in a new location. If property owners know that Disney is sniffing around for real estate, they'll jack the prices up. Setting up an offshore can keep the prices at a sane level. Another reason: A patriarch of a wealthy family may set up offshore companies as part of estate planning to divide assets after his passing, especially if they include international accounts or holdings. Third reason: When a U.S. company buys or merges with a foreign company, sometimes it is better to have an offshore serve as the intermediary or agent, according to what I've been told.

McClatchy_journos3 karma

Kevin: Another variation of your example is a merger between companies, and you want it quiet until its done. As immigrant nation, there are many people with double nationalities or assets in two countries. A wealthy patriarch or matriarch might want to create an inheritance vehicle but doesnt want the family to know who gets what until the time of death. A bunch of reasons, including payroll if you own a business in a foreign company, it may be easier to keep it independent of your US operations for tax purposes.

b3lt3r3 karma

All the focus at the moment seems to be on individuals. Do the same methods apply to corporations? If so why are they not being highlighted?

McClatchy_journos1 karma

Tim: Corporations can set up offshore shells. But I think they more often would get help from silk stocking law firms in big world capitals. They wouldn't go to Mossack Fonseca in Panama City. In perusing the data, the vast majority of people are either individuals with a lot of money (think $5-$50 million) or smaller companies.

wrestlingchampo2 karma

Seeing as how this has shone a spotlight on tax havens in general, are you seeing any momentum toward launching probes into American tax havens in WY, DE, or NV?

McClatchy_journos2 karma

Kevin: I think I've mentioned elsewhere, the silence in Congress has been deafening. maybe I've missed it, but I don't see any member of Congress calling for hearings. Treasury Sec Lew has been silent, Obama had a chance to call for changes and instead talked about a loophole called tax inversions. So the initial response has been disappointing albeit not surprising given the inability of our power structure to even agree what day it is.

_Hypnotoad2 karma

Any thoughts or comments on the difficulty McClatchy's closure of its foreign bureaus has had on reporting stories of this magnitude?

McClatchy_journos2 karma

Tim: I was in one of the foreign bureaus, and was brought home in mid-January. My colleague Kevin has also spent a lot of years based in Mexico and Brazil. That collective experience has also helped us with awareness of names of prominent foreigners. Also, on this kind of project it is worthwhile to work in teams in close proximity to others. I spent months last fall working by myself with a multitude of technical issues trying to learn how to search in the database with little instruction. It was really, really tough. My hard drive seized up twice. So I've actually enjoyed being back here with some really smart fellow reporters trying to get to the bottom on this.

ApertureBrowserCore2 karma

What has it been like seeing how the Panama Papers have affected the world? What sort of response did you expect when the documents were "officially" released? Have there been any responses that surprised you since the papers' release?

McClatchy_journos1 karma

Kevin: As a journalist, you always hope for that kind of story that has a lasting impact. I think most of us veteran journalists sensed this would be important and have fallout, but I think we've been pleasantly surprised that it has somewhat exceeded our expectations in terms of public response. The real measure for me, however, is whether the US Congress and other countries do anything or play for time until the world's attention is focused elsewhere.

gwar4202 karma

Do you really think these papers should be call Panama Paper, or MossackFonseca Papers? I think that calling it Panama Papers will ruin Panama's image when Panama (the whole country) had nothing to do with it.

McClatchy_journos5 karma

Tim: Yes, it's kind of a bummer for Panama. We at McClatchy didn't have direct input on the name. I love Panama, been there many, many times, including out to the Kuna Yala where the Kuna indigenous people are. i once did a story out there on the high rate of albinoism there for McClatchy.

McClatchy_journos2 karma

Kevin: Ditto what Tim said, McClatchy brought a lot of LatAm knowledge to the project. All three of our Wash team have worked in the region and the Miami Herald is one of our 29 papers, so we're all Latam hands and are sympathetic to the view that Panama shouldn't be tainted by a single issue but I think on the other hand, it does raise a lot of questions about the firm's political ties and the country's more sordid past.

kurrimasta2 karma

What do you make of Clifford Gaddy's conjecture that Russian intelligence may be behind the Panama Papers? He is a pretty astute Putin scholar, and claims this information damages Cameron and Ukraine's PM more than Putin, as it only deals with $2bn of his wealth rather than the much larger amount

http://www.brookings.edu/blogs/order-from-chaos/posts/2016/04/07-panama-papers-putin-gaddy

McClatchy_journos2 karma

We aren't discussing the source of leak in great measure to protect the source or sources of the information. It's a fundamental tenet of journalism, and as much as we'd personally like to weigh in on this sort of conversation doing so runs risks of revelation by a thousand comments. So we have to respectively pass on discussion of leaker/leakers

aliasname2 karma

If you were going to explain to someone how important the discovery of the Panama Papers are how would you describe it?

McClatchy_journos2 karma

Tim: If you are British Prime Minister David Cameron and having to answer angry questions in the House of Commons over your father's offshore trust, you'd probably think the papers are important. Or if you are the prime minister of Pakistan and have three children listed in the papers, you probably are slamming doors shut in anger. And even if you are one of the leaders not saying much, perhaps in the Chinese Politburo's standing committee, you probably are not sleeping well at night. As Mao once said, it takes only one spark to start a wildfire. In many parts of the world, the Panama Papers could ignite a spark.

maybe_stupid2 karma

Thank you guys for the work you are doing and thanks for doing this AMA! A lot of great questions have already been asked, but I had a few anyway: Which parts of the world would you say are being the most damaged by the actions you are reporting? Are taxpayers and others in developed nations being damaged as much as maybe people in less developed nations being damaged by criminals who use these companies? Are there any individuals or organizations that you would say have been committing some of the most wrongdoing? How do you think citizens should handle this situation? Sometimes people will jump to overly accusative ways of thinking, or they may become too passive. What human reaction would you like to see to all of this information? Thank you! I would appreciate any answers, whether it is to some or all of these questions.

P.S: Any advice for a college student considering working in journalism?

McClatchy_journos1 karma

Kevin: I'll skip all but the PS question: I work with a lot of students and I am biased in saying business journalists get hired. Bloomberg and Reuters continue hiring, newspapers, somewhat of a dinosaur as they transition to a web publication status, are looking for multiple threat reporters, those who can do visual/graphic work, know how to work with data, and oh yeah, some basic writing skills would be nice. I personally would put the least emphasis on the third, you can learn to be a better writer, but increasingly those other skills are more important. good luck, it's the worst profession in the world, except for all the rest

kbhades1 karma

Hi and thank you for doing this. What's the general policy for disclosing names of individuals ? Why one person and not another ?

McClatchy_journos4 karma

Kevin: We started with the assumption that just because you are in here doesn't mean you are up to no good. there are plenty of legitimate reason you might have a shell company. we found some folks who were retirees buying small properties in say Costa Rica to retire etc. We also found people with hundreds of millions of dollars associated to their name, and they have no Internet footprint. We can't just publish their name because they have privacy rights, and we continue working on some of those folks. But it was pretty obvious who we'd highlight since many were convicted or indicted and then you'd find that it took MF years before they were ever even aware.

highprofittrade1 karma

Why reveal the Panama papers now?...i think it would have been better if you had kept the papers and get leaks from other banks as well...now that these papers are out all the other corrupt officials and banks will take great measures to hide their identity right?

McClatchy_journos1 karma

Tim: Why now? Let me tell you, it was hard to set a date for the release for media from all over the world. Publication dates were pushed back several times. I wouldn't have liked further delays to await other leaks. Let me give you an example why: One day back in October or so, I discovered that the CEO of the Mexican state oil giant, Pemex, had an offshore that he'd obtained through a Dubai broker working with Mossack Fonseca. Great story! Why did he need an offshore company? But by the time the publication date rolled around, the CEO had lost his job for unrelated reasons. So the story sort of died. That would have happened in many other cases as well.

Prettygame4Ausername1 karma

What do you think the Pakistani people should do, now that the children of the current prime minister, who promised no tax evasion or corruption, are involved in this ?

McClatchy_journos2 karma

Tim: I haven't followed events in Pakistan in the last few days. I saw, though, that the PM went on national television early after the leaks were publicized to do some explaining. I'm sure Pakistanis will decide if his explanations were sufficiently thorough.

newharddrive1 karma

Do you have all of the documents in your possession?

Or, can you access them?

Or, do you only see what they feed you?

Thanks!

McClatchy_journos3 karma

Tim: We have access to the database. We do not possess the documents in printed form. They would probably fill a gazillion boxes. If someone is feeding us, I don't know about it. Speaking of which, it's nearly lunch time. May I have a Reuben sandwich?

randomguy5061 karma

Do you think it is unethical to profit from unlawfully obtained documents even with the best intention in mind? If not, why not? I applaud some of your work but the thing is you made public some information that could potentially destroy somebody life without them having done anything illegal. What is your justification of doing that? Why didn't you go to the authority if you have evidence of illegal activities?

McClatchy_journos3 karma

Tim: First off, our team of journalists is pretty far removed from the bean counters at McClatchy who measure profit and loss. We're thankful to have jobs and be able to attempt meaningful journalism. But it would be a stretch to say that any of us pursued these stories to seek a profit. And on your question about whether we've exposed the innocent who have done nothing illegal, I assure you we've had strong debates about who to focus on and we've weighed these issues as best we could. You ask about going to the authorities -- if you only knew! Before this exploded on the world stage, we reached out to the IRS, the FBI, Treasury, FinCEN, etc. They largely ignored us. We are not the New York Times. Authorities often only react when they sense the winds of public judgment changing rapidly.

does2matter1 karma

To all of you: Keep up the good work. Get 'em!

To the top tier journalists: I hope that you have some sort of tracking tree. If the research has already been done, why waste your resources? Keep structure trees with sub-shell companies and names associated. Just my $0.02

McClatchy_journos1 karma

Kevin: tx, good advice and we do use some software that helps in this

McClatchy_journos1 karma

Tim: There are tracking mechanisms. We have an internal ICIJ program that allows us to create visual tracks of interlinked companies and directors.

Nonas11 karma

Does this in anyway affect the average joe, such as myself?

McClatchy_journos3 karma

Kevin: In the simplest terms, your tax dollars are spent funding the war on drugs (skirmish really), nation-building, defense etc. And the money often goes to governments whose leaders are in the data and who arguably are working against your interests and against their own citizens, it's why Guatemalans and other Central Americans are coming here in droves. Another direct effect is just the basic integrity of the financial system, which is arguably the skeletal system of our nation. when Ponzi schemers and financial fraudsters uses offshores to hide their ill gotten gains it muddies the water for everyone, losses are passed on to investors in higher costs, regulators must focus attention away from other needs etc

ImportantOpinions1 karma

What was your reaction to Wikileaks asking for all the documents?

McClatchy_journos3 karma

Tim: There's a big difference between Wikileaks and ICIJ, which is an organization run by and comprising working journalists. Wikileaks has a pretty radical interpretation of what should be made public, which is to say practically everything. I personally don't think that is feasible. There are emails and documents from people doing legitimate things. Why should their correspondence with lawyers, credit card information, cellular phone numbers, etc. be made public? Why single them out?

Palchez1 karma

Would you rather fight 100 duck sized horses or one horse sized duck?

McClatchy_journos4 karma

Nick: I would like to see the big duck take on South Florida's exotic python invaders

McClatchy_journos4 karma

Kevin: Honey badger don't care

McClatchy_journos2 karma

Tim: I'll take the horse-sized duck. How fast could it waddle anyway?

domquixote9741 karma

I appreciate that there are legal issues regarding the database. Due to the fact that Swissleaks and Luxleaks were not well covered in Ireland I would like to know, without naming names, how many Irish companies and individuals are named in the database?

McClatchy_journos4 karma

Tim: I never looked for Irish companies. You might check the webpage of the Irish Times. I believe they had a small team looking at the data and have published stories.

domquixote9741 karma

The Irish Times is precisely what I meant by not well covered previously, thanks anyway and good luck with the investigation.

McClatchy_journos4 karma

Kevin: Reach out privately to ICIJ and let them know by email you think there is fertile ground there; they will, we presume, bring in additional partners going forward and perhaps you've alerted to a weak link in our coverage to date. I'll mention it to them too. tx

drinkredstripe21 karma

When all is said and done what do you think the implication of the Panama Papers will be on global scale? The impact in America?

McClatchy_journos4 karma

Nick: I think there will be more pressure than ever on offshore havens around the world to force beneficial owners to disclose their names. In the US, we may see states like Delaware and Nevada with similar corporate secrecy laws pressured to become more transparent.

McClatchy_journos3 karma

Tim: I see several impacts in different areas. This investigation was conducted by journalists all over the world collaborating over a fairly long period of time. We kept the investigation secret while we sifted through the archives until we could get a handle on some of the bigger issues. As a collaborative journalistic endeavor, I think it is kind of unprecedented. And I must say, the quality of investigative journalism is high in many parts of the world. Some of the biggest finds in Panama Papers were made by independent journalists or those working in small countries. Big Media has no lock on doing these kinds of investigations. In terms of other impacts, broadly speaking, the wealthy and the crooked will always find a way to hide and move money. if it is not through offshore companies, trusts and foundations, it could well occur through other assets. How about casino chips and Bitcoin?

albacore_futures1 karma

Hi, I've long read about corrupt dealings with regards to mineral rights, particularly in the developing world. Typically, there is an autocratic regime that buys loyalty from competing factions within the state via payoffs, and it acquires the funds for those payoffs via corrupt dealings over mineral rights with Western and Chinese companies. Often, the recipients of the payoffs (being citizens of an autocratic state) hedge their bets by moving their money into offshore systems, such that if there is a coup or shift in power, they have something to flee to.

I haven't seen many reports tying prominent politicians and mineral rights payments. I would have expected either mid-level bureaucrats in suspect countries, but also would have expected some evidence of major multinational corporations using these sorts of vehicles to hide bribes. Have you seen much evidence of this?

McClatchy_journos1 karma

Tim: I hear our colleagues in Africa have been doing some work on this but haven't had time to look if it's been published yet.

woody32971 karma

In terms of worldwide impact, what does this leak mean moving forward? Is there going to be a shift in a positive direction in how people conduct business or is this whole scandal simply going to result in one class of rich being uplifted and allowing a new crop to grow?

McClatchy_journos2 karma

Kevin: The optimist in me thinks the wealthy in many countries where there is little openness may have to recalculate how and where they put their money offshore. The cynic in me sees someone with a sense of opportunity charging more money for secrecy and protection and creating an even more impenetrable business model.

3372bobd1 karma

Have the Panama Papers shown any illegal activities that any notable figures have done?

McClatchy_journos1 karma

Kevin: I'd start by distinguish whether you mean illegal as criminal, or illegal as in not following rules. The prime ministers of Iceland and England did not follow rules and are in hot water. I think we've shown, and future stories will continue to show, how MF continued working with people who had been convicted in the US, and how slow they responded at times when they've found people subject to sanctions. And there are some people who we've written about who are under indictment and the shells mentioned in the indictment are in this data. So that's just some, others are mind-numbingly complex financial prosecutions that take too much room to explain a story that tries to look at a handful.

simon2it1 karma

How do you respond to the criticism that this isn't a real leak, but controlling of information in an attempt to make Europe more EU friendly.

It seems that focus have been on revealing information on people who are generally opposed to EU interests, and that a lot of the funding for the ICJ comes from organisations that might have interest in what gets revealed.

Why haven't the documents not just been released?

I don't have an opinion on the stance, I don't know shit about this, I'm just wondering.

McClatchy_journos1 karma

Kevin: Let me be as clear as I can, speaking only for our organization, there is no pre-meditated attempt at anything. Whatever the ICIJ source of funding is, and I think it is pretty transparent, at no point were there any limits on what we research or publish. They brought in teams of organizations they thought would play well in the sandbox together since this is all about collaboration and the only demand was find interesting names. Each news organization in each country was looking with that same focus, as it happened some had bigger names than others. but this is having effects in places as far apart as Peru and Norway. It is consequential because it rips off the veil of secrecy that bad actors have long hidden behind.

alphakamp1 karma

How is the data being distributed to other journalist groups considering this dump is 2.7 TB?

McClatchy_journos5 karma

Kevin: The ICIJ determines who joins and when, it is out of our control. We have spent eight months working with this data as have our partners around the world but I think it is safe to say all of us collectively have just scratched the surface in making connections. I think others joining, especially if they bring specialized knowledge and skills, will further bring to light how offshores have contributed to a range of global ills from deforestation for profit to oil corruption. the first part of this has been about collaboration, unprecedented collaboration, and that it stayed secret throughout is remarkable.

alphakamp1 karma

Do you have hands on the 2.7 TB of data? Or are you only allowed to browse ICIJ held data?

McClatchy_journos4 karma

Tim: We're only allowed to browse. And the internal system we use is frequently down. Moreover, it is not particularly user friendly. Searches take a REALLY long time. I have spent entire days last fall looking at particularly offshore companies that turned out not to be interesting. There are many rabbit holes to jump down. Many lead nowhere interesting.

ChimneyFire1 karma

What happens if there is another leak of a similar size and type brought to you? Are you prepared to link these two sources for more complete records? What if it keeps happening? Won't your organization be required to relinquish control at some point?

McClatchy_journos1 karma

Tim: Sure, we'd take a look at it. But on a personal note, this is really mind-numbing work at times. I've spent many entire days staring at computer screens of receipts and routine emails. Some days, I'd rather be devoured by one of those slimy pythons slithering around South Florida then continue this search. Take pity, please! More seriously, many others would step in if the search got bigger. There's no lack of interest any more on the subject.

tstormredditor1 karma

What do you think the likelihood of the leak being leaked by an MF insider or an outsider (hacker or state sponsored)? Would it make a difference in your reporting?

McClatchy_journos1 karma

Kevin: As mentioned in another, a fundamental tenet of US journalism is to not discuss the nature of a leak or a source or sources. you risk revelation by a thousand minor disclosures.

JediLibrarian0 karma

You've stated that you're not releasing all the data because it contains information that could be used for identity theft, and because some of the information covers legitimate companies. But isn't it also true that controlling the data gives you exclusivity in a profit-minded media environment?

McClatchy_journos3 karma

Nick: Sure. The german newspaper that first got the data and ICIJ have exclusive control. But they shared it with nearly 400 journalists around the world. And they're working to bring in other responsible news partners to help analyze the data further. The decision to keep exclusive control over the data was driven by journalism ethics, not profit. In today's media world, a big exclusive gets you web traffic, yes, but the profits are small.

And it would have been irresponsible to publish the data in its entirety + violated the privacy of people who committed no wrongs. Do you think it would have been better to completely crowd source this effort?

Kaner_95-1 karma

I personally think your findings are insignificant and you are trying to make something of nothing. Would you care to prove me wrong?

McClatchy_journos8 karma

Nick: Thanks for the question. We believe our work is extremely significant.

The findings by the nearly 400 journalists of the ICIJ show how anonymous shell companies in far-flung locations can be used to facilitate money laundering, corruption, tax evasion and other wrongdoing.

That's in addition to tax avoidance, which is legal, but deprives government treasuries of needed funds. Setting up an offshore to avoid taxes is an option available only to the wealthy, not common citizens.

One of the most shocking findings: Offshore companies are used by suspected terrorists, gun runners, drug cartels and others blacklisted by the US government.

Some of the entities were used to supply the air force of the Assad regime with oil and gas as they embarked on bombing campaigns that have killed civilians, according to US authorities.

Our findings also led to the resignation of Iceland's prime minister, a very significant result, and has called into question the financial activities of UK PM David Cameron and Vladimir Putin of Russia.

In Miami, our work showed how offshore money has contributed to the skyrocketing home prices that have left many locals unable to buy a home.

People have talked about the harm wrought by the misuse of offshore companies but this project is one of the first to highlight the problem in a systematic, global way.

I'm sure my colleagues will have many other significant results to highlight.

McClatchy_journos6 karma

Tim: I don't think the findings are insignificant. Many countries around the world do not have enough government revenue to build adequate schools and hospitals and roads. If people in power skim off money to funnel to offshore companies, the money is not taxed and leaves less funds available for the needs of the poor. I consider that significant. If governments in the developing world do not improve the lot of the poor, our whole world will see greater instability. That is not insignificant, in my opinion.

McClatchy_journos9 karma

Kevin: I would add there is a t-shirt gag gone viral on Internet showing Mossack Fonseca name and the phrase "Because taxes are for poor people."