Generations X and Y Unveil Tax Haven Secrets

All smiles: "Left to right: Giannina Segnini (project manager), Rigober­to Car­vajal (data scientist) and Matthew Caruana Galizia (developer)." Image Source: The Times of Malta. (Hat tip: Clyde Meli.)

The Times of Malta reports on an interesting new online resource:

A young Maltese man is one of a handful of journalists and web developers who helped to create Offshore Leaks, an international database exposing secret companies and funds in offshore tax havens. Matthew Caruana Galizia, 27, translated “big, very poorly constructed databases” into graphs that show the connections of every person or company involved.

This is another example of Generations X and Y being handed a dysfunctional world and turning it inside out with high technology. However, one commenter on the article reserves enthusiasm: "If I may ask where did he read this information from?" Good question. The app was developed by staff at La Nación newspaper in Costa Rica with over 100 journalists around the world for the International Consortium of Investigative Journalists, based on publicly-available results from official investigations.

Video Source: ICIJ via Youtube.

The International Consortium of Investigative Journalists describes the app as follows:

Readers can search information about the ownership of more than 100,000 offshore entities in tax havens and discover the networks around them.

When Bernard Madoff built his $65 billion house of cards; when food distributors passed off horsemeat as beef lasagna in Europe; and when Apple, Google and other American companies set up structures to channel their profits through Ireland — they all used tax havens.

They bought secrecy, minimal or zero taxes and legal insulation, the distinctive products that tax havens market and that allow companies to operate in a fiscal and regulatory vacuum. Using the offshore economy is akin to acquiring your own island where the rules that most citizens follow don’t apply.

The International Consortium of Investigative Journalists publishes today a database that, for the first time in history, will help begin to strip away this secrecy across 10 offshore jurisdictions.

The Offshore Leaks Database allows users to search through more than 100,000 secret companies, trusts and funds created in offshore locales such as the British Virgin Islands, Cayman Islands, Cook Islands and Singapore. The Offshore Leaks web app, developed by La Nación newspaper in Costa Rica for ICIJ, displays graphic visualizations of offshore entities and the networks around them, including, when possible, the company’s true owners. [Key findings include:]

• Government officials and their families and associates in Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and other countries have embraced the use of covert companies and bank accounts.
• The mega-rich use complex offshore structures to own mansions, yachts, art masterpieces and other assets, gaining tax advantages and anonymity not available to average people.
• Many of the world’s top’s banks – including UBS, Clariden and Deutsche Bank – have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways.
• A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct.
• Ponzi schemers and other large-scale fraudsters routinely use offshore havens to pull off their shell games and move their ill-gotten gains.

The project lead, Giannina Segnini, is a Gen Xer who has mobilized Big Data to support traditional investigative journalistic techniques since she started work in 1994: "Data-driven journalism empowers journalists with better tools to tell better stories." You can read a 2011 interview with her at Global Editors Network here.

The ICIJ Offshore Leaks Database is here.