VOA's Michael Lipin on Sunday conducted an interview with Michael Hudson, a senior editor at the International Consortium of Investigative Journalists about the Panama Papers.
The ICIJ's team of international journalists, working with leaked documents from a Panamanian law firm, has published some of its findings into the offshore financial dealings of the rich and famous, and politically connected, as well as the leaders of some countries.
An anonymous source provided the 11.5 million documents from Panama's Mossack Fonseca law firm to ICIJ, a nonprofit organization based in Washington, D.C.
Michael Hudson: We have been doing lots of reporting on the offshore world and have gotten a series of smaller leaks considered huge, (but) compared to what we have, they are small. ... New leak that came in from one of our partners in Germany and they came to us knowing we can bring people together around the world. ... leak (of) 11.5 million documents (on) 200,000 offshore companies.... Information stretches from 1977 to end of 2015. ... No way that one journalist could really dig into this. ... We put together a team of people, more than any 370 journalists from 70 countries (and) more than 100 news organizations have worked on this project which has been stretched out for more than a year. ...
Question: What did you think when you found out the German newspaper had acquired access to so many more documents than you have ever seen in these other leak cases?
Hudson: We are excited, but there is always a level of skeptical excitement, because you can have a leak (but) you have to do the work inside the documents. For us, it is not just a matter of posting a bunch of documents online and telling the world to go at it. ... We want to make connections -- international scandals, politicians -- and dig into that. ... We were excited but held judgment on how good it was until we spent the time in the documents. I can tell you, as my colleagues started working on this, before I did ... began digging, they became increasingly excited and confident that we had something really important. I came on the project six months ago and it became clear that we had important stuff, naming names and celebrities, how offshore world works, how big banks and big law firms and middle men work together. ...
Q: Why is this important to you to be able to show the world how these secretive corporate processes work?
Hudson: This is the shadow side of our global economy the money that flows undetected ... (it's) important to have transparency when you are talking about billions and trillions of dollars, about who controls that money, and where it is going. Are taxes being paid on it? Without some sort of sense of how the offshore system works, you can’t know how the global economy works. One thing that is really important -- anytime there is a big political corruption case, giant Ponzi scheme like Madoff, there will be (an) offshore element when that many people are involved behind (the) scenes are using offshore companies' accounts to hide their activities, and once the scheme is pulled off, escape with the loot.
Q: For you, what was most concerning or alarming findings from all individuals who were part of this investigation?
Hudson: What stuck out to us was the number of politicians we were able to identify -- 140 politicians and public officials from around the world who have offshore entities, … including 12 world leaders ... presidents, ministers and kings ... the ministers of Iceland and Pakistan and King Salman of Saudi Arabia. You can’t say in every single case that someone is doing something wrong or that they are hiding improper practices, but it raises lots of questions with transparency when you have politicians and top leaders of countries moving their holdings offshore and using offshore entities to kind of obscure what they are doing.
The other big thing ... was the number of family members and associates of top leaders that we identified as doing business in the offshore world that included people like the godfather of (Russia President Vladimir) Putin’s daughter (who) records show us played a part in a network of covert maneuvers by banks and companies that were closely tied to Putin and, you know, we have record(s) showing companies linked to this network moving money and transactions as large as $200 million at a time.
Q: Regarding Russian President Putin, is there any evidence from the leaked documents that he or his associates were actually involved in activity that would be considered criminal in Russia?
Hudson: That’s not a question I can answer. I don’t know because I don’t know Russian criminal law enough. We just know that people close to Putin, who are linked by friendship or by business relationships are involved in a lot of transactions that are very transparent that are being done in a quiet and perhaps in (an) even secretive way, moving large chunks of money that raises very serious questions. And I should note that we sent lots of questions to (the) Kremlin, very detailed questions, and (the) Kremlin refused to answer the questions. They did go public several days ago in an effort to preempt our story by charging that ICIJ and its media partner were preparing what (a) Kremlin spokesman called an information attack on Putin and people close to him.
Q: And what do you think of that allegation?
Hudson: Well, you know, it’s not an attack, it is journalism. And, you know, reporting on financial affairs of public officials around the world, that kind of attack, we think it is a public service.
Q: There is also a response from Mossack Fonseca to the publication of these reports, the company said that it does due diligence on its clients to make sure that they are not involved in criminal acts. The company said it is not responsible how its clients manage their companies and Mossack Fonseca even hinted that it might take legal action against those involved in publishing this leaked information. What do you think about Mossack Fonseca's response to your report?
Hudson: I can tell you that Mossack Fonseca's argument is that, yes, we set up offshore companies for people around the world, but they are not really our clients. We worked through other law firms and big banks that bring us people. … They are (the) real clients and the analogy they use is – oh well, we are like a car factory – our liability ends once the car is produced: you can’t be blaming Mossack Fonseca what people do with their companies. … It would be like blaming an automaker if the car is used in a robbery.
Q: Is that fair or not?
Hudson: We think that the story goes much dipper than that. We have numerous examples of Mossack Fonseca either unknowingly or knowingly working with very questionable characters that includes at least 33 people and companies black listed by (the) U.S. government because of evidence that they have been involved in wrongdoing such as doing business with Mexican drug lords or terrorist organizations like Hezbollah. We think there is lots of questions how well Mossack Fonseca screens its clients. … There are just so many examples of the law firm working with people, convicted criminals or people later convicted of crimes, specially money-laundering, that it raises serious questions about how this firm does business. And I should note about the documents. … We are not the first folks to look at the documents. Actually the German government has obtained a smaller slice of leak and used that last year in a series of raids on a German bank that authorities there say is connected to the banks that worked with Mossack Fonseca.
Q: Just a kind of a conclusion: What impact do you hope that Panama Papers will have on how international finances are conducted?
Hudson: We hope that there will be more transparency. We hope that people around the world will pay attention to this issue and we hope that more will be done by the public, by public officials, by public servants, other journalists around the world to really look at this issue and keep scrutiny on what’s happening in this underground economy that is trillion and trillion of dollars.