ICIJ would have to process the documents with optical character recognition software to make them searchable. It would be a mammoth undertaking. Then, once the documents were processed, teams of reporters would have to comb through the data to find their stories. Cabra knew they would need another data journalist. After she returned to Spain, ICIJ added a computer engineer, Miguel Fiandor, to the team to help with the reconstruction.
The German reporters said they wanted to publish in six months. Cabra told them it was impossible; there was too much to do. The Germans responded that they had already been investigating the leak for three months. Their bosses would not allow them to go beyond a November deadline. Besides, they already had enough great information to fill five separate front-page stories.
Cabra, who had just come off Swiss Leaks, where there was barely enough time to finish, called Ryle. This will be horrible, she told him, repeating the word horrible multiple times for emphasis.
“We cannot do this again,” she told him. “There is no way ICIJ could meet the deadline.”
Ryle agreed. “Leave it to me,” he said.
When Cabra and Carvajal left Munich, they took with them one terabyte of data. The Germans expected to receive about half a terabyte more from John Doe. They were off by a factor of three.
* * *
AFTER THE COMMERZBANK raid and Süddeutsche Zeitung’s Mossfon Luxembourg scoop, the German-language Swiss newspaper Tages-Anzeiger, part of the Tamedia chain and an ICIJ partner, interviewed Switzerland’s own Christoph Zollinger for a story. By the time Tamedia’s Oliver Zihlmann learned about the article, he already knew that the Germans had more Mossfon data, but it was too late to halt the feature without arousing suspicion.
Zollinger had moved his family to Switzerland from Panama in 2011, to raise his young children in his native land. He had also become obsessed with bobsledding, hatching a plan to train a Panamanian team to compete in the 2014 Winter Olympics in Sochi, Russia. The bobsled idea—a track well grooved by Hollywood, which had chronicled the 1998 exploits of a similar Jamaican effort—received widespread backing in Panama, including a plug from the country’s president. Zollinger even managed to wrangle diplomatic passports for himself and his wife. Despite procuring enough donations to train and produce a slick, albeit unintentionally comical, promotional video, the team’s hopes were dashed when Zollinger injured his foot and the Panamanians failed to qualify at the Olympic trials.
Zollinger claimed to Tages-Anzeiger that he had never been a co-owner in the Mossack Fonseca firm. He said that he had withdrawn from the business to distance himself. “I do not want to be held accountable for the wrongdoing of third parties for which I am not to blame,” he told the newspaper.
In truth, Zollinger had been a partner, with an ownership stake in the firm, for years. His technical and systems abilities had been a key ingredient in Mossfon’s growth. All of the most controversial issues the firm faced, when elevated to the partners, went to him as well. And his work on behalf of the firm had continued from Switzerland. Nonetheless, his desire to distance himself from its activities was understandable. The business model had clearly changed. The Luxembourg leak was yet another example that keeping secrets was not as easy as it once was.
Zollinger’s fellow partners, Jürgen Mossack and Ramón Fonseca, were also eyeing retirement.
In 2010, the partners brought in Rubén Hernández, a Salvadoran former chief financial officer of Heineken Panamá, as Mossfon’s chief executive officer. The idea was that Hernández would gradually assume control of the firm so that Fonseca and Mossack could reduce their responsibility for the firm’s day-to-day operations. However, neither partner envisioned future lives of idleness for themselves.
For Ramón Fonseca, retirement meant juggling three occupations instead of four or five. During his time at Mossfon, Fonseca had somehow managed to squeeze in a literary career, which in Panama was often more about prestige than profit. Between 1994 and 2000, Fonseca wrote three novels, one collection of short stories, and two books for young adults. All three novels won top prizes for literature in Panama.
Fonseca saw himself returning to books, putting pen to paper in a quiet writing cabin he planned to build on a mountaintop. In 2013, he purchased land for an orange plantation in Veraguas, where Father Héctor Gallego had worked. He gave away orange trees to local farmers in exchange for an agreement to sell the fruit to him for processing. He staked out the land for his cabin not far from the plantation.
Fonseca also entered politics, working to resuscitate his grandfather’s Panamañista political party. In 2009, the Panamañistas forged an alliance with Ricardo Martinelli’s Cambio Democratico Party. Martinelli and Fonseca were former classmates in grade school. It was yet another example of how in tiny Panama, childhood connections follow one through life. Martinelli won the presidency in 2009 and appointed Fonseca as counselor, a ministerial position. But two years later, relations had soured between the two old acquaintances. Fonseca went on television and called the president an autocrat. Martinelli fired Fonseca via Twitter.
Under Martinelli, corruption flourished. The former president spent most of 2017 in Miami fighting extradition to Panama, where he faces criminal charges over misuse of public money. Among the allegations is that he financed a vast surveillance effort that secretly monitored more than 150 Panamanian businessmen, journalists, and politicians. After Martinelli’s term ended, Fonseca returned to government, when Juan Carlos Varela, a close personal friend and the head of the Panamañista Party, won the presidency. Varela appointed Fonseca a member of his kitchen cabinet and put him in charge of the party.
Meanwhile, Jürgen Mossack had found contentment with his third wife, with whom he started a new family. On weekends, the couple traveled to show jumping competitions in which their daughters participated. Mossack became an active participant in the local Rotary Club and served on Panama’s foreign relations council. He also bought land in Boquete and planned to spend time building retirement homes for wealthy foreigners.
In 2013, according to an insurance document, the firm had $42.6 million in income. After his hiring, Hernández had visited the various offices to try to understand the business and make it more profitable. He focused on ways to save money and increase fees. But when Luis Martínez, the head of IT in Panama, told him the firm should invest in computer security, Hernández expressed little interest. He was more intrigued by a new tool to track statistics.
Meanwhile, Mossfon struggled to fulfill the compliance obligations of a new era. In the Seychelles, the firm, concerned about a possible audit, asked a competitor who had recently experienced its own review what to expect. For direct customers, the government required the name and due diligence on the beneficial owner. For all companies that came through so-called eligible introducers, such as lawyers, accountants, and bankers, the government wanted full information on them. Mossfon reviewed its Seychelles companies. It had 14,086 of them. The firm knew the actual owners of only 204 companies. More than 12,000 of the companies were from clients who were not compliant with Seychelles regulations.
A week before Cabra and Carvajal came to Munich to collect the data, Hernández presided over a three-day corporate strategy meeting. The partners were not listed among the speakers on the schedule. On the first day, after a brief speech by Hernández, the executives discussed Mossfon’s appearances in the media, covering the Nevada case, the Commerzbank story, and an unflattering piece in Vice titled “The Law Firm That Works with Oligarchs, Money Launderers, and Dictators.” In one of the last sessions, on the final day of the meeting, Luis Martínez delivered his forty-minute presentation, according to the schedule. His subject was “Data Loss Protection.”
* * *
JÓHANNES KR. KRISTJÁNSSON failed to make it home to his Reykjavík apartment in time for his scheduled Skype call with ICIJ’s Marina Walker. He pulled into a gas station and parked near a car wash to take the call on his cell phone. It was May 28, 2015. The burly, bear
ded Icelander had no idea what Walker wanted.
Kristjánsson was one of Iceland’s best-known investigative reporters, having already amassed enough triumphs and disappointments to fill several careers. Too curious and introspective for fishing trawler work, as a young man he gravitated to journalism, taking a job as a cub reporter for a weekly magazine in a Reykjavík suburb. He then found his way to the Icelandic television news Channel 2, quickly recognizing the power of television to bring a story to life. Not satisfied with the drudgery of a junior reporter, he pestered his bosses to allow him to investigate the growing influence of the Hells Angels in Iceland’s drug trade. He was granted permission to work on the story on his own time. Kristjánsson produced five reports on the subject. Their quality convinced Channel 2 to launch a newsmagazine with Kristjánsson, which became Kompás, an award-winning program, which quickly made a name for itself with hard-hitting investigations. In its biggest scoop, the program exposed one of Iceland’s most beloved and well-known Lutheran priests as a financially corrupt pedophile. The priest had run a rehab facility for teenagers with government funds. The stress over the story’s publication contributed to the demise of Kristjánsson’s first marriage.
In 2008, a few weeks after Iceland’s first bank collapsed, Kompás aired a program focusing on tax havens and Luxembourg, asserting that Icelandic businessmen and bankers used them for tax evasion. The broadcast singled out Jón Ásgeir Jóhannesson, the owner of Channel 2, and his family. A furious Jóhannesson called Kristinn Hrafnsson, who hosted Kompás, and threatened to sue him over the program. Hrafnsson, with Kristjánsson listening in, pointed out to the owner that his contract specifically made the station liable for any legal damages. Jóhannesson would essentially be suing himself. The media mogul thought about this for a second and acknowledged that Hrafnsson had a point. But three months after the tax haven program aired, Jóhannesson canceled Kompás, citing its high cost. The station’s CEO fired Kristjánsson and Hrafnsson by phone, telling them to gather their belongings and leave the building by day’s end. Hrafnsson went on to serve as a spokesman for Julian Assange’s WikiLeaks. Kristjánsson, devastated over the loss of a program into which he’d poured his heart and soul, left journalism to paint buildings in downtown Reykjavík.
After a few months, he went back to work for a tabloid. A few days before Christmas 2010, Kristjánsson’s seventeen-year-old daughter died from an overdose of fentanyl, a powerful opioid. He tried to bury the pain in work, writing a book about a young Icelander imprisoned in Brazil for drug trafficking. But the project failed to exorcise the demons.
He found his daughter’s letters and began to piece together the final year of her life, trying to find meaning in her death. Kristjánsson convinced the police to reopen an investigation into his daughter’s boyfriend, who had injected her with the drugs and was too stoned himself to do more than watch her die.
Kristjánsson also proposed a news program for state television in which he would take his camera deep into the underground of teenage drug addiction. The two-part program featured graphic images of teenagers abusing drugs, the slurred 911 call from the boyfriend as Kristjánsson’s daughter lay dying, and a reenactment of the ambulance ride to get to her. Kristjánsson personally rescued two girls from drug dens, taking them to rehab. It was powerful and disturbing television. Other Icelandic media outlets picked up the story, transforming it into a social phenomenon. The Icelandic health director investigated the prescription drug business. Several doctors who had overprescribed drugs had their licenses pulled.
After the program, Kristjánsson was hired by state television. He produced three influential investigative programs on the market manipulation by Icelandic banks in the lead-up to the financial crisis. The first one featured information leaked from the office of Ólafur Hauksson, the special prosecutor. Hauksson, who Kristjánsson says was not behind the leak, was attacked by defense lawyers for allegedly prosecuting his cases in the media. The next year, Kristjánsson was laid off due to budget cuts and instead put on a contract basis. When he took Marina Walker’s call, his contract had just run out.
After Offshore Leaks was published, Kristjánsson had contacted ICIJ about joining the project, but his calls and emails were lost in the avalanche of media requests Ryle fielded in the wake of publication. Then the wife of Iceland’s president was found in Swiss Leaks. Kristjánsson sent a letter to ICIJ and got Sven Bergman, a longtime ICIJ member and award-winning investigative reporter in Sweden, to intercede on his behalf. When Kristjánsson learned that the Icelandic tax authorities were investigating the first lady, he decided to wait to see what they would do first.
Walker told Kristjánsson about the Mossfon data and Wintris Inc., the offshore company belonging to Sigmundur Gunnlaugsson, Iceland’s prime minister, who had been elected on a platform of getting tough on the country’s creditors and their offshore dealings. Icelanders were not aware that their prime minister was himself involved in the very activity he was castigating.
As Kristjánsson listened, time appeared to freeze before him. He watched as a vehicle drifted into the car wash. Kristjánsson knew his countrymen and their anger over the financial crisis. This news he now possessed could topple the Icelandic government.
Walker invited Kristjánsson to attend a preliminary meeting on the investigation to be held in Washington at the National Press Club on June 30. Kristjánsson discussed the trip with his wife, Brynja, who worked as a freelance accountant. The couple had children to support. Finances were tight. A plane ticket on short notice was expensive. If he joined the project, he would work without pay, at least in the beginning, and alone. He would be confronting not only Iceland’s leader but the entire financial and political establishment of a relatively small country. Brynja did her best to stifle her fear, and said go for it.
* * *
THE IDEA BEHIND the Washington meeting was to brief a small group of committed partners who would investigate the data over the summer. In addition to the ICIJ team and the Süddeutsche Zeitung reporters, journalists with expertise on the biggest cases such as Iceland and Argentina were also invited. But what started out as a small gathering grew to more than fifty people.
Jóhannes Kristjánsson did not talk much at the Washington meeting, intimidated by journalists he recognized by reputation but did not know personally. Reporters from the BBC and Le Monde were there, as was Edouard Perrin, looking understandably glum. Less than two months earlier a Luxembourg prosecutor had indicted him for receiving the leak of the tax agreements. Economics reporter Kevin Hall and investigative editor James Asher, from the Washington bureau of the American news organization McClatchy, also attended. ICIJ’s Michael Hudson had recommended partnering with McClatchy, whose Washington bureau was among the first to question the justification for the Iraq War. ICIJ also liked that McClatchy owned multiple newspapers across the country, including the Miami Herald. Oliver Zihlmann and Titus Plattner from Switzerland’s Tamedia also came.
After group introductions, Bastian Obermayer and Frederik Obermaier presented some of what they knew. By this point Süddeutsche Zeitung had received 1.7 terabytes of Mossfon’s data and expected another 500 gigabytes to arrive soon. It was the largest leak received by journalists in history. There were 7.4 million files. It was an astounding number—and turned out to be an undercount.
Frederik Obermaier reviewed some of the cases they had already found. The data contained information on arms traffickers, drug dealers, CEOs, and the megawealthy. Roldugin and Putin were mentioned, as was Iceland’s Gunnlaugsson. Obermaier talked about the Báez case in Argentina and about the Israeli businessman Beny Steinmetz, who was under investigation for bribery over an iron-ore mine deal in Guinea. Mossfon had registered all the companies implicated by prosecutors in the court documents.
Bastian Obermayer then went into further detail about Mossack Fonseca itself. He discussed the personal background of the two founding partners and then drilled down into the firm’s organization. The Germ
ans had spent weeks trying to understand Mossfon’s corporate structure. Mossfon had more than two hundred individual companies under its umbrella, divided by geography and purpose. For those who knew little about the firm, it was clear that the two German reporters were deep in the weeds.
Mar Cabra presented next. She introduced the ICIJ team, which in addition to the now three-person data team also included two talented young women, Cécile Schilis-Gallego from France and Emilia Díaz-Struck from Venezuela, who handled everything from partner coordination to research. Rigoberto Carvajal had code-named the project “Prometheus.” In addition to being the god who stole fire from Mount Olympus and gave it to mankind, Prometheus was also the name of one of the most powerful combat vessels in Starfleet.
Cabra introduced the Global I-Hub, a Facebook-like application where members of the project could log in securely and confidentially share the information they found in the data. The I-Hub would become a second home for reporters scattered across the globe to gather and communicate. It offered the kind of operational flexibility and digital security Mossfon could only dream about.
Secrecy World Page 24
