Navigating Offshore: Analyzing International Finance Post-Panama

When a businessman with international holdings and properties rose to the highest seat of power in the United States without releasing a single page of financial data, transparency and shell companies reignited as a central issue in American politics. Almost one year after the release of the Panama papers, a panel of experts gathered at the Columbia School of Journalism to discuss the ethics and motivations behind offshore finance.
The panel opened up with Jason Sharman, a Professor of International Relations at Cambridge, and author of The Despot’s Guide to Wealth Management: On the International Campaign Against Grand Corruption, who began by debunking some myths associated with the offshore world. “Although the dominant presentation of this issue is one of greed and greedy people, I think it’s much more an issue of fear,” he said. Sharman made the case for a multitude of motivations for moving money offshore, and that while some may be criminals avoiding taxes and laundering funds, there are also those who fear losing it all to oppressive governments.
Other motivations are exceedingly innocuous. He later disclosed that he himself opened an account in the Isle of Man in order to apply for an apartment in London as an Australian national.
A forthcoming study from Sharman finds the trope of tropical offshore tax havens to be a gross mischaracterization: researchers found that higher-income OECD countries like the US and UK are considerably more lax in following international procedure for establishing shell corporations, often not requiring a passport copy or other identifying measures that “traditional” tax havens in the Caribbean insist upon.
Giannina Segnini, Director of the Data Concentration Program at the Columbia School of Journalism and prominent ICIJ member, argued the contrary, that in her years of investigating corporate finance, she very rarely finds a harmless case of a dissident protecting assets from a malicious home government.
Segnini walked the audience through the secure collaboration platform utilized by investigative journalists to connect and identify leads across borders. Beginning with a short film emphasizing the human costs of shadow finance, she underscored the challenges in processing such a large data dump.
“We are still finding new stories every single day,” she said of the Mossack Fonseca leaks, and the journey is far from over. Much of the data came in different formats, and journalists work to turn these documents into a searchable, indexed resource available to the public. “Imagine these projects are like pictures, so we needed to turn them into data, actual data, and to do that, you need to OCR [optical character recognition] every document, and if you’re talking about 11.5 million documents, it’s quite a challenge.”
Open and honest public discussions about offshore finance are relatively safe from the comfort of Columbia University in upper Manhattan, but in repressive regimes, investigative journalism carries deadly risk. Irina Malkova, a Paul Klebnikov fellow at the Harriman Institute and editor-in-chief of the Russian publication Republic, opened with the story of Andrei Kozlov, former deputy chairman of the Russian Central Bank and outspoken critic of money laundering in Russia. Kozlov was shot in Moscow in 2006, days after taking action against a bank suspected of nefarious practices.
Malkova herself has felt the looming political pressure on journalists in Russia after the Panama papers: when the extensive offshore holdings of cellist Sergei Roldugin, a close friend of Vladimir Putin, were revealed by Malkova and her colleagues at RBK, they were asked to step down.
Overall, the panel emphasized the complicity of large liberal democracies in shell corporations and their willingness to skirt the rules to protect their clients. “It does happen in Britain, it does happen in this country, it happens all the time”, said Sharman. After all, he noted, the 20 billion USD Russian laundering scam was carried out not in the Cayman Islands, not in Mauritius, but by Scottish partnerships.