Investigative reporting is expensive, time-consuming, and risky. We should know — we’re revealing a world that’s dominated by the rich and by the powerful.
Fifteen months ago the International Consortium of Investigative Journalists set out to investigate a mysterious and secretive global system that is used almost exclusively by the select few.
But the consequences of secrecy jurisdictions – better known as tax havens – have become all too real for ordinary people in recent times:
- The financial meltdown in Cyprus has been blamed on its banks accepting money from rich Russians trying to avoid the laws of their home jurisdiction.
- Over the past few years other European countries like Greece, Ireland, Italy and Portugal have been brought to their knees, in part, according to commentators, by decades of secrecy and tax evasion and poor financial dealings.
Advocacy groups like the Tax Justice Network estimate that about $250 billion is lost in taxes each year by governments worldwide, solely as a result of wealthy individuals holding their assets offshore. The revenue losses from corporate tax avoidance are greater.
The group estimates that half of all global trade now passes through tax havens and an estimated one third of world wealth now resides there.
The issue of secrecy jurisdictions is not just about evading taxes.
Shell companies – that is, corporations with no apparent operations, no apparent employees and no apparent physical assets – are used by those who register them for a range of other nefarious activities around the world.
Thanks to loose laws of incorporation in many jurisdictions, it’s easy for offenders to remain anonymous. And the entities can often be formed in less than 24 hours using online facilities.
It is not just criminals that take advantage. The secret service arms of governments use tax havens to create covers for their networks of spies, according to experts we have talked to. And advocacy groups claim many small-time dictators use tax havens to strip the assets of their people.
There were many unique difficulties reporting this story – not least the almost impossible task reporters have previously found penetrating a world that is built on secrecy.
There was also the risk in what we might find.
This is a world that’s dominated by the rich and by the powerful. Opening that world would potentially open a Pandora’s box.
One of the things we have found over the past 15 months is the existence of a global service industry that has developed where major banks, respected law practices and giant accounting firms provide secretive offshore structures to clients wanting to use this world for legitimate and other uses.
Offshore secrecy is a product. Like other products, it’s subject to the laws of supply and demand: The more secrecy you want, the more money you pay.
The ICIJ is unique in many ways, not least in the way we use local reporters, working in their own languages, rather than having journalists “parachute” into a country.
Investigative reporters too often act as lone wolves without realizing that there is often plenty in a story for others too, and that by sharing rather than hoarding, their own stories are improved and enriched.
The added value of working with ICIJ is that reporters get access to our network of reporters around the world – a network we are growing and building on all the time.
For this report, we needed to get reporters on the ground in more than 40 countries. It truly was a global effort because the offshore world is a world that does not stop at international borders. This is one of the important criteria we use when deciding what issues to investigate.
People often ask why we give our reports away for free. One of the answers is that ICIJ is in the business of encouraging collaboration. We believe that reporters working together produces a richer form of investigative journalism. It is also what our funders expect of us.
Why have we been working on this project for 15 months?
For many reasons:
- It takes a long time to understand this complex world, especially when working across multiple jurisdictions and languages;
- We’ve been analyzing a wide range of data sources, most of them unstructured;
- It takes time to identify the most relevant stories. We’re most interested in identifying systemic failures.
What we do at ICIJ is slow journalism.
It is expensive and unique, and is increasingly under threat as media organizations around the world continue to downsize and back away from investigative reporting. Therefore we appreciate your readership and the public support we receive.
I invite you to sign up for our email newsletter to be the first to read this project when it launches.
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