Mysterious mail to Australian journalist triggers global tax haven expose

• Mass leaks 'reveal secret world of tax havens'
• Pressure builds on French President Hollande over tax fraud scandal

It all began when Australian journalist Gerard Ryle received a mysterious package in the post.

The ICIJ's efforts were also assisted by an Australian software company that provided free software to help make sense of the information in the files. 

The former Fairfax Media investigative reporter was busy trying to unravel the details of a large financial fraud in Australia when a hard drive — with the details of 2.5 million digital files — appeared.

The drive was a treasure trove of WikiLeaks-style proportions that shed light on the often murky world of offshore tax havens — where millions of dollars are stashed in secret accounts — and would yield information on 120,000 offshore companies and nearly 130,000 individuals.

But Ryle, who later moved to head the International Consortium of Investigative Journalists (ICIJ), did not know that yet.

"My instinct told me it was big but you do not know," Ryle told AFP. Technical impediments also frustrated his early attempts to pore over the information he had received.

"The files were almost impossible to read, they kept crashing my computer," Ryle said. "I've seen a lot of names from all around the world; they were people that meant nothing to me.

"I just did what any reporter would do — you just go on the Internet and you Google them."

Embarrassing the powerful

In his capacity as head of the Washington D.C.-based ICIJ, a non-governmental organisation founded in 1997 to help co-ordinate the work of reporters seeking to uncover corruption, Ryle set about mobilising a worldwide army of journalists to help mine the rich seam of information he had received.

Fifteen-month long probe ... the investigation used a strategy similar to that used by WikiLeaks when it released hundreds of thousands of diplomatic cables in 2010. 

"It's always been on my mind to get some help from reporters all around the world," Ryle said. "The ICIJ was the perfect vehicle."

The ICIJ coordinated a 15-month long probe that involved 86 investigative journalists in 46 countries to compile a series of reports it began releasing around the world this week, using a strategy similar to that used by WikiLeaks when it released hundreds of thousands of diplomatic cables in 2010.

So far, the revelations have made waves in several countries, causing embarrassment to French President Francois Hollande's former campaign treasurer Jean-Jacques Augier, as well as the family of the president of Azerbaijan.

One of Mongolia's most senior politicians, former finance minister Bayartsogt Sangajav, told the ICIJ he was considering resigning after the study claimed he had set up an offshore entity and a secret Swiss bank account which at one point contained more than $US1 million ($A960,000).

"I shouldn't have opened that account. I should have included the company in my declarations," he said. "I should probably consider resigning from my position."

Millions in secret accounts

Another case cited by one of the newspapers involved, The Guardian, was the wife of Igor Shuvalov, a businessman close to President Vladimir Putin who has been first deputy prime minister since 2008, who is recorded as setting up several offshore companies. Olga Shuvalova made no comment.

Involved 86 investigative journalists in 46 countries ... the investigation was published newspapers like France's Le Monde. 


Canada's top class-action lawyer and husband of a senator, as well as 450 other Canadians, were also exposed in the unprecedented leak.
Tony Merchant, dubbed by local media Canada's class-action king because of the large settlements he has won for his clients, hid at least $C1.7 million ($1.6 million) in a Cook Islands trust set up in 1998.
The European Commission reacted to the reports by calling on EU states to do more to tackle tax fraud, estimating it costs their cash-strapped governments around one trillion euros a year.
"For the Commission, there can be no exceptions whether for individuals, companies or third countries who... abet tax evasion," Commission spokesman Olivier Bailly said.

Larger than WikiLeaks

Ryle cautioned, however, that many of the individuals brought to his attention by the hard drive may not have broken any laws.

"What you first realise is that you can't accuse people of doing something wrong because you don't have the full story, you don't know what they've declared in taxes," he noted.

"You kept asking yourself: where's the story here? Is it illegal? Your instinct tells you it's a story but you need to find it, you need to look for patterns, for trends."

Recruiting the services of foreign journalists to decipher the information was necessary because of the vast amounts of detail in the hard drive, estimated as being 160 times larger than the cache released by WikiLeaks, totalling some 260 gigabytes of data.

Australian support

The ICIJ's efforts were also assisted by an Australian software company that provided free software to help make sense of the information in the files.

"I approached the firm and said 'Don't ask me why I need it but can you give it to me?'" Ryle recalled.
He also acknowledged that the sheer scale of the global investigation went against the instincts of many of those journalists involved.

"I wanted to encourage collaboration among journalists, something that we, investigative journalists, normally don't like to do. We like to work on our own and keep our secrets," Ryle said.

Other revelations are set to be released on April 15, while the ICIJ promises further reports later this year.
"We're pretty confident we have a lot more because it's so vast and it takes a long time to understand," Ryle said, adding that he was not concerned about whether the revelations ultimately lead to criminal prosecutions.
"It's not our duty — our duty is to report and to let other worry about that," he said. "Our job is to inform the public about something they didn't know and what people or authorities do afterwards is up to them."

theage.com.au 5 Apr 2013