Kiwi at heart of Panama Papers leak 'certain' New Zealanders will be named

A New Zealander at the heart of the "Panama Papers" leak says more files will be released, and he's "certain" they will include the names of New Zealanders and New Zealand entities.

Former Wairarapa Times-Age and Evening Post journalist Peter Bale, now head of the Center for Public Integrity that oversaw the journalistic investigation, spoke to The Nation today.

Although he had not looked at the New Zealand data himself, he said he had discussed it with the team of investigative journalists working on the project.

"You can be absolutely certain, I think, or as near to certain that there will be significant numbers of New Zealanders and of New Zealand entities, certainly New Zealand entities, within this data set."

Due to the time and resources needed to analyse the data, it could take months to produce results, but there was "still much more to come," he said.

The leak of 11.5 million documents – amounting to 2.6 terabytes of data – from Panama-based Mossack Fonseca is considered to be the largest in history.

The so-called Panama Papers reveal the existence of 214,000 foreign trusts and companies set up in more than 200 countries for Mossack Fonseca's wealthy clients.

More than 11,000 foreign trusts have been set up in New Zealand and opposition parties are accusing the government of allowing the country to be used as a tax haven (as New Zealand was called by the Australian Financial Review this week).

Mr Bale says it can be assumed there is “a very strong New Zealand connection” in the Panama Papers and he’s “pretty certain that there will be New Zealand names in there ... You can be absolutely certain, I think, or as near to certain that there will be significant numbers of New Zealanders and of New Zealand entities, certainly New Zealand entities, within this data set.”

He says he doesn’t know if the information could have come from a hack or internal whistleblower but trusts staff that the information is valuable and “pulls back a veil on this web of secrecy.”

Mr Bale is concerned about the safety of the journalists reporting the Panama Papers and says security is paramount, including the security of the data, adding they have been “very fortunate” so far

"Our hope is that, as with other large data sets that we’ve done, it will be made available in the next couple of months, publicly," he says.

RAW DATA: Peter Bale interviewed on The Nation (watch the full interview here).

Lisa Owen: How often do we hear about some big story around the world, and there in the middle of it is some Kiwi. So it was with the Panama papers, which this week revealed how money is moved around the world to avoid tax, and exposed the holdings of 140 politicians and officials, including presidents, prime ministers and monarchs. We’ve seen Iceland’s prime minister resign, calls for Britain’s David Cameron to follow suit, and Vladimir Putin was linked to loans worth billions. In New Zealand, we’ve been described as a tax haven, and a soft touch at that. We in fact have 12,000 offshore trusts registered here. And the journalism has been done by the International Consortium of Investigative Journalists, which is part of the Center for Public Integrity. And at the head of that is Wairarapa Times-Age and Evening Post old boy Peter Bale. He’s with Paddy now from Washington, DC.

Patrick Gower: Good morning, Peter Bale, and thank you very much for joining us.

Peter Bale: Good morning and thanks very much, Paddy. I’ve never been described as a Wairarapa Times-Age and Evening Post old boy before. That’s lovely. Thank you.

I want to start by asking – how did this come about? How do you get 11.5 million documents out of a company, a law firm that is designed to keep secrets?

Well, it’s all to do with trust. The way we get access to this material is that Suddeutsche Zeitung, the newspaper to whom it was leaked in Munich in Germany, has worked with us before on a number of very very large, very important data leaks, particularly Swiss leaks last year, which was the leak of about 58,000 pages of documents from HSBC in Switzerland. Because they’d worked with us before, they knew we could do it on this scale, they knew that we could keep it secret for as long as it needed to be secret, and they knew that we could deploy our platforms right across the world to do it in virtually every country that there was information about. As far as the leak itself goes, as far as I know, even the people at Suddeutsche Zeitung don’t really know who the leaker was. They know what the leaker has said their motivations were, but it’s very much based on the quality of the information. It is very clear from these 11½ million data files that the information is accurate.

You say a leak, but it was probably a hack, surely. Surely it was a hack.

I don’t know. As a civilian, one might assume that these things happen from internally. Now, this is 40 years of data from, I think, 1975 through until December 2015. I don’t know whether an external hack could obtain such information. And really I don’t know whether an internal disgruntled employee type person could obtain such information. The fact is that somebody has passed along huge tranches…

Does it matter to you where it came from? Does it matter how this information got there, whether it was stolen by an employee or stolen by a hacker?

‘Stolen’ is an interesting word to use there. I’m satisfied that I trust my staff to be sure of the quality of the information, to be sure about where it’s come from and to be sure that it contains information that is inherently valuable and that pulls back a veil on this web of secrecy.

Sure.  Now, it was extraordinary that you guys kept it secret, that all these 370 reporters and journalists managed to do this without leaking themselves. How does that web of trust work?

I can’t really imagine. I am the chief executive of the CPI, which is the parent organisation, if you like, of the international consortium. I almost deliberately didn’t ask my colleagues on the ICIJ for as much information as I would have liked to have known myself. I satisfied myself what the information was, the scale of it, and then I very much left it up to Gerard Ryle, the director of the ICIJ, to lead the project. It’s one of those things where you almost don’t want to know anything that you might accidentally leak yourself. The thing is over the last four years Gerard and his team have built such a reputation of trust with journalists around the world working with the ICIJ that they all understand they have a vested interest in sitting on the story, keeping it strong until it’s ready. And it’s not just about the launch date. 370 journalists and about 100 media organisations launched this at exactly 2pm Washington time last Sunday. That’s extraordinary. But also the story evolved. As the data came in, as the data was processed, as the data was made searchable the story’s changed and evolved. The relationships between companies changed and evolved as new information came in. So there was also always a danger  of going too early, of believing that the story was about somebody and then realising that there was somebody else in there or somebody bigger. And so there had to be a point also where the ICIJ team stopped and said, ‘We will not look at data beyond this period. It’s going to be from these two time periods.’ And that allowed them to then analyse it, search it and decide which were the biggest stories within the data set.

You talked about searchable data there. When will it be made public? When will we get access to a database, basically?

As you can imagine – I think you’ve probably seen some charts – this is the largest leak there has ever been. We have a very small team, a remarkably small team that has ingested this data, made it searchable, made the relationships in it very clear and then cleaned it up to some extent to search for the journalistic meaning in it, if you like, which has allowed all of these journalists to then go in, work on it, discover the meanings for each country: the people in Brazil have found the stuff that’s relevant to them; the people in Australia have found the stuff that’s relevant to them. So there’s still quite a lot of work to do to it. But our expectation and our hope is that, as with other large data sets that we’ve done, it will be made available in the next couple of months, publicly.

Sure. And turning to New Zealand, then, when will New Zealand be available? Have you looked at any New Zealand data yet? Will you look at it? What’s happening with the New Zealand side of things?

I haven’t personally looked at New Zealand data. I haven’t personally been a journalist working on the project. I’m responsible for them, but I’ve left that very much to them. But I discussed it with them today. We have not had a media partner in New Zealand particularly on this project. There’s a number of countries where we just were unable to stretch fully to covering every country. You can be absolutely certain, I think, or as near to certain that there will be significant numbers of New Zealanders and of New Zealand entities, certainly New Zealand entities, within this data set. The history of New Zealand’s position on offshore companies, people registering trusts there from offshore and also things like New Zealand’s relationship with Niue and some of the other places that we know Mossack Fonseca has used, means that you should assume that there is a very strong New Zealand connection, and certainly with New Zealand-registered companies there.

Sure. And will there be New Zealand names as well? Will there be New Zealand people as well?

You can assume that too, I think, based on a discussion I had with my team today about this. And going back to some of the history that there’s been over the last four years and beyond with New Zealand companies and New Zealand individuals who have been active in this area of offshore companies and perhaps working with Mossack Fonseca, we’re pretty certain that there will be New Zealand names in there. I just can’t go into more detail than that at the moment, purely because I haven’t looked at the data myself and we need to go deeper on it. But it is one of the countries that we… We now have many, many requests from media organisations who were not part of the wider team and from countries where we were unable to get to, or even whole industries that we were unable to analyse. And so there’s still much more to come, I’m afraid. Actually, I’m not afraid of that; I’m quite excited by that. Still much more to come.

Okay. Some people will be afraid and others obviously excited. 12,000 trusts are here in New Zealand all because of this kind of tax avoidance. Does that make New Zealand a tax haven in your view, these 12,000 trusts?

So, I’ve discussed this with my colleagues. I am not an expert, personally, in this area. Gerard Ryle, the director of the ICIJ, certainly believes that New Zealand is a favourable country for this kind of activity. And I think New Zealand too knows that it has some issues with the ease of setting up trusts and the way trusts are identified. I think even the prime minister there has talked about this and noted that your trust law was last revised in 1988. So I think New Zealand recognises that there are issues there itself. And I did note before I came here, New Zealand rates number four on the Transparency International Corruption Index, just under most of the Scandinavian countries, and Australia is number 13, so we all have issues in this area. But I am told that New Zealand does have some issues in this trust area, but I wouldn’t pretend to be an expert.

So in terms of the safety of the people who have been working on this, in terms of protecting them, I mean, you’ve wounded some pretty big players in the world – Vladimir Putin, President Xi of China, Mexican drug lords and so on and so forth. Are you concerned about the source or the journalists who have been working with the source in terms of the security apparatus that, say, someone like Putin has access to?

Yes. I mean, journalistic safety is incredibly important to me in all the jobs that I’ve done over the last 10 or 15 years, whether that’s in a war zone or in a financial journalism job. Journalistic security is primary. The moment you start talking about security on the internet, you start to make yourself a target. We never talk about the security of our work. We’ve been incredibly fortunate with it. The systems are pretty robust, and the people are very capable journalists. So far, the threats have been largely trying it on with some of our electronic systems or some of our internet-connected systems. And we’ve been very fortunate, I would say, so far.

So what can we expect next? What are the next revelations? Where does this story go next in the immediate future?

We had a wonderful story today, which I would encourage everybody there to read, which is about the art market and how the big art companies – Sotheby’s and Christie’s – drive that market, how they work on both ends of it and how much of that is related to the offshore banking area. Just remember, it’s not all coming from my team. There are really only about a dozen people working on this in my staff team. The Guardian, I suspect, probably has much more to come about the UK, and our US partners are looking in the US. It is true to say that there would appear to be fewer US names than you might expect. We think that’s for a couple of reasons. One is that we think that Mossack Fonseca was not necessarily the company of choice for US people. But also Delaware, Nevada and other places are already highly desirable places to register companies in confidence within the United States. But I think there will also be more fallout, I would say, Paddy. You’ve already seen a leading football person resign, an Austrian banker resign, the Icelandic prime minister who you mentioned. There’s going to be pressure on a lot of people through this, I would say. I thought it was very interesting also, the Financial Conduct Authority in the UK has announced that it will require all banks to announce their connections to Mossack Fonseca by the end of the month. So this will flow through, regardless of whether there’s more information from the leaks.