About a third of all countries in the world now require officials to publicly disclose their assets. Institutions like the World Bank and the OECD see this as a good thing. Asset declarations, they say, are crucial tools for fighting corruption and holding officials accountable. As an investigative journalist in the Philippines, I found asset statements vital to digging into conflicts of interest and the illegal accumulation of wealth by those in public office. Asset statements are mother lodes of information – and journalists in Russia, South Africa, Bosnia and Thailand, to name only a few, have found them crucial to their investigations of official wrongdoing.
There is as yet no global consensus on the merits of asset transparency. Last week, Chinese authorities detained six anticorruption activists who had been demanding that senior Communist Party officials declare their wealth. The demands come in the wake of exposés in the U.S. press, including a report that recently won the Pulitzer Prize, on the billions – yes, billions – illegally amassed by the so-called Red Nobility.
But the pushback on official disclosures comes from an unlikely quarter as well.
Last Monday On April 15, President Obama signed a law that reversed a provision inThe STOCK Act of 2012, which required members of Congress, legislative staff and senior officials of the executive branch to post their financial disclosures online. As my former student Sasha Chavkin pointed out in an informative piece for the Columbia Journalism Review, the 2012 law also came on the heels of scandal – a 60 Minutes exposé on insider trading by congressmen.
For some time now, critics of asset transparency have been saying that wealth disclosures are unnecessary violations of privacy. Rather than disincentivizing corruption, they say, disclosures only provide fodder for “asset porn.” More importantly, the National Academy of Public Administration (NAPA) in Washington, DC said in a recent study that these disclosures, if posted in online databases, pose dangers to law enforcement and national security. NAPA also asserted that asset disclosures have “limited value” in terms of detecting conflicts of interest or insider trading.
On April 15, for the first time ever, French government ministers were required to publicly declare what they own, in what has been called a historic Great Revelation or Le Grand Déballage. Like elsewhere, the demand for wealth disclosure was stoked by scandal. First, an exposé on the French muckraking site Mediapart, that alleged that the budget minister, Jerome Cahuzac, had an undisclosed – and untaxed – account in the Swiss bank UBS. In March, the minister was forced to resign and is now facing tax fraud charges. Then, just weeks later, Le Monde and the International Consortium of Investigative Journalists revealed that President Francois Hollande’s close friend and campaign treasurer, Jean-Jacques Augier, had secret investments in two offshore companies in the Cayman Islands.
The asset declarations, posted on a government website, were seen as an attempt by Hollande to repair the damage from the scandals. The French president is now proposing to extend the mandatory disclosures to the entire parliament and other elected officials. This is quite revolutionary. France has so far bucked the transparency tide, even if most EU and OECD countries now require public disclosures of official wealth and the World Bank preaches the virtues of asset transparency to its clients in the developing world. As the BBC reported, French resistance remains fierce:
I work in a journalism school, where exposure to the sound and fury of debates on the future of journalism is an occupational hazard. There can be lots of noxious fumes in some of those discussions, and so the essentials are often lost in the smoke. This was why going through the Columbia Tow Center’s Post-Industrial Journalism – a newly released and eminently readable manifesto on the future of the profession – was like breathing fresh air. To begin with, it restates what’s often taken for granted when these exchanges heat up: Why, in the first place, does journalism matter?
C.W. Anderson, Emily Bell and Clay Shirky make clear from the start: Journalists are not mere purveyors of facts. They are truth-tellers, sense-makers, explainers. The journalism that really matters is the reporting that can change society and hold the powerful to account. “Now and for the foreseeable future,” they say, “we need a cadre of full-time workers who report the things someone somewhere doesn’t want reported.”
There will, however. be fundamental changes in how this cadre will work and where, how their journalism is going to be distributed and how it will be funded. The report maps those changes, and its 126 pages are well worth a read. Suffice it to say that the authors envision a preeminent place for watchdog reporting and the institutions that do it.
That place, however, is not guaranteed. It requires not just reporters who can produce high-quality accountability journalism but also institutions that can sustain them. For sure, the newsrooms of the future will be smaller, with far leaner budgets than they do now. They will therefore have to do more with less. The report makes clear that the ones that will flourish in the changed media landscape will be those that harness the power of the crowd, of computers and of collaboration.
Data crunching, doorstepping, power story-telling. Winners of the 2012 Pulitzer Prizes talked about these and other reporting techniques in “Holding up the Mirror,” this year’s Pulitzer Prize Seminar. I had the privilege of moderating the seminar and to ask the prizewinners about how they worked in teams, where they got the information for their databases, and how they got people to talk to them when they knocked on their doors at night (Matt Apuzzo of The AP said that the best time to doorstep people at home is 8:15 pm, after they’ve had dinner.)
This year’s Public Service Award went to the Philadelphia Inquirer for a multipart series on school violence. In the video below, Susan Snyder and Mike Leary describe how the newspaper formed a team of five reporters who worked over a year, interviewing over 300 people and compiling information from school and police reports, records of 911 calls and other sources. They found that every school day in Philadelphia, 25 students, teachers and staff members are beaten, robbed, sexually assaulted or otherwise violently attacked. They crunched all their numbers in a database that listed over 30,000 attacks that had occurred in the past five years. The series also featured horrific stories of the assaults, including those perpetrated by children ten years old or younger. The data and the compelling stories prompted dramatic changes in the Philadelphia school system.
I’m leafing through an interesting little book called, How to Pay a Bribe. It’s a compilation of articles written by journalists, lawyers and private investigators. Intended largely for companies operating overseas, the book provides tips on how to avoid being prosecuted for corruption. It’s worthwhile reading for journalists if only because it documents the various forms of state-of-the-art bribery. If there’s food porn, this is corruption porn.
Here’s a titillating quote from an unidentified oil middleman interviewed by the journalist Ken Silverstein; ”You used to give a dictator a suitcase of dollars; now you give a tip on your stock shares, or buy a housing estate from his uncle or mother for ten times it’s worth.”
There are other ways to pay a bribe. Some are tried and true, and have been seen in various places; others are country-specific, like the very discreet “elegant bribery” practiced in China, described more fully below. Here are some of the juiciest examples – both crass and elegant – of the various forms of bribe-giving chronicled in How to Pay a Bribe:
You’d think that getting the names of the shareholders of a company would be fairly easy. Such information should be routinely available.
In fact in many parts of the world, it isn’t. Not if you’re talking about private companies, which have managed to elude public scrutiny even in an era of increasing transparency. To be sure, there’s a wealth of information on listed companies. But good luck researching a private firm. A recent World Bank study looked at the information stored by corporate registries in 40 jurisdictions. Its findings were pretty pathetic: Only a third of the registers required companies to release the names of their shareholders. Only one registry, Jersey, collected information on the beneficial or real ownership of a company. Everywhere else, the real owners can hide behind nominees.
Beyond ownership, registries generally collect only scant information on the finances and actual operations of private companies. Some registries don’t even require companies to give an address or physical location. Such secrecy allows them to evade government regulation and public scrutiny. It facilitates corruption, tax evasion and other crimes.
Those who want to dig into company information can only get so far by getting into corporate registers. They’d need to triangulate information from other public records (including those from other government regulatory bodies or the courts) as well as from well-informed human sources. There are also subscription databases (see list below) that aggregate information from a variety of sources worldwide. In addition, there are some helpful guides on investigating private firms (see below).
One of my favorite sites for researching private companies is Open Corporates, which has scraped company registers in some 60 jurisdictions worldwide and put the information on some 47 million companies in a single, easily searchable database. One can type in any name in the search box and get a list of all the companies on the database that have the name listed as a director or shareholder. It’s amazing.
But the problem is that Open Corporates can only scrape the data that company registers collect. As this presentation shows, that data is scant and much of what happens in the corporate world is invisible to citizens and even to regulators. There are limits to what scraping technology can do if the information does not exist.
The Summer School sponsored by the Balkan Investigative Reporting Network ended yesterday, and as the participants got ready to leave the picturesque mountain town of Mavrovo, Macedonia, talk inevitably turned to the bad state of roads in the Balkans. Most of the journalists were driving back home, taking journeys that will last five to 11 hours on highways that have seen better days.
Many of them traced the sad state of public works in the region to corruption. It’s a lament that’s heard in many other places as well. Yesterday, the ramp of an eight-lane bridge collapsed in Harbin, northern China. Reports say the bridge was just nine months old and was the sixth major bridge to have collapsed in that country in the past year. Citizens have blamed corruption and the frenetic speed of construction for the shoddy infrastructure.
I became interested in planespotting some years ago, after viewing the clever video posted by the Tunisian blogger Astrubal, who put together planespotters’ photographs of the Tunisian presidential plane’s comings and goings.
Planespotters are hobbyists who have a passion for planes: they track, photograph and record aircraft takeoffs and landings, taking note of registration numbers and other markings. Some follow just particular types of aircraft, others just an airline or a national insignia. A lot of them take photographs of their sightings, and like other hobbyists, they post the photos online. The Open Directory Project lists nearly 60 websites that collect planespotting pictures. Many of these sites have searchable databases, where one can search planes by make, airport sighted and, more importantly, by tail number. Read the rest of this entry »
I am off to the annual conference of the Investigative Reporters and Editors, which will be held in Boston this year. I will be on a panel on international corruption together with Claudia Mendez Arriaza of the Guatemalan newspaper El Periodico and the New York Times’ David Barstow, who shook Walmart with his blockbuster story on payments totaling $24 million that the company made to Mexican officials.
I will be talking about tracking looted wealth. Here’s a preview of my presentation, published in The Global Muckraker, a blog put out by the International Consortium of Investigative Journalists:
It’s estimated that every year, over a trillion dollars flow illicitly out of the world’s economies. These are the proceeds of corruption, crime and tax evasion. A lot of that money ends up in bank accounts, companies and various assets overseas. The Global Financial Integrity Task Force says that a good portion of it – about $2 trillion of the $10 trillion in deposits held by non-residents in offshore centers – has found its way to the United States.
It’s hard to document these illicit financial flows: banking secrecy and the opacity of corporate information in offshore jurisdictions, including the U.S., cover up the money trail. But it’s not impossible. Read the rest of this entry »
This week, scandals involving high court judges in the Philipppines and Brazil were in the international spotlight. On Tuesday, Renato Corona, the chief justice of the Philippine Supreme Court, was removed from office after having been found guilty by the Senate of failure to disclose millions of dollars in his bank accounts.
On Wednesday, The New York Times reported that high court judges in Brazil were alleged to have taken overseas trips on private planes arranged by opposition senator Demostenes Torres. The senator is said to be a “gopher” for Carlinhos Cachoeira, a powerful businessman and illegal gambling operator who is known as Brazil’s Michael Corleone. Read the rest of this entry »
There is nothing more damaging for public officials than to have their secret and hard-to-explain assets exposed to the public. You’d think that they would have learned by now. And yet…
In the past weeks, I have been following from afar the travails of Renato Corona, the chief justice of the Philippine Supreme Court. Corona is in the midst of an impeachment trial and was found to have deposited millions of dollars in undisclosed bank accounts. As chief justice he should have known: Bank secrecy is not inviolable. As regulators worldwide crack down on money laundering and compel banks to be more accountable for their depositors, full secrecy is no longer guaranteed.
So here’s some unsolicited advice to those in public office: Be careful where you put your money. Be discreet about acquiring assets. Don’t be sloppy when you hide your wealth. Otherwise you’ll prove true what I’ve suspected all along: only the uninitiated and indiscreet get caught. Read the rest of this entry »