Diving into how Paradise Papers leak unfolded
A trip to Germany kicked off nearly a year of sifting through documents
This story is part of the Star’s trust initiative, where, every week, we take readers behind the scenes of our journalism. This week, we look at how the Star’s involvement in the Paradise Papers leak came about.
It was early one morning in January 2017 and the phone on Toronto Star reporter Rob Cribb’s desk rang. It was Marina Walker Guevara, deputy director of the International Consortium of Investigative Journalists.
“There’s been another leak,” she said. “I think you’re going to be very interested. There are a lot of prominent Canadian names. Can you come to Munich for a meeting?”
And with that, the Toronto Star’s involvement began with the Paradise Papers, which, like the Panama Papers in 2015, are a trove of leaked electronic records revealing the ways many of the wealthiest people and companies in the world stash money in tax-free offshore investments.
Cribb and colleague Marco Chown Oved jumped on a plane and headed to the offices of the Süddeutsche Zeitung, the Munich-based newspaper that obtained the leaked documents. There, the pair met up with more than 100 other journalists, all members of the ICIJ, brought in by the Süddeutsche Zeitung to help parse some 13.4 million leaked documents from prestigious offshore law firm Appleby, trust company Asiacity and company registries in 19 tax havens.
After several days of marathon meetings to get a sense of the leak, the journalists returned to their home countries to meticulously go through the material — emails, Microsoft Word documents, scans, spreadsheets, images, and audio files, to name just a few formats — and identify potential public interest stories. The Toronto Star and CBC/ Radio-Canada are the Canadian media partners of the ICIJ for the Paradise Papers.
“The great frustration was, after spending a year with the Panama Papers database, with which I was familiar and understood, the format of the Paradise Papers was completely different, much less intuitive to navigate and much more archaic,” Cribb said in an interview.
Cribb and Oved, with the oversight of editor Lynn McAuley, decided the best way to start tackling the data would be through keyword searches of prominent Canadians: prime ministers, premiers, members of Parliament and NHL players.
“At the beginning, we didn’t know where to start. It was a total scattershot search,” said Oved.
In March the investigative journalist consortium decided on a worldwide publishing date of Nov. 5, 2017. Cribb and Oved needed to identify potential stories quickly so they had time to report, do due diligence and write.
Star data analyst Andrew Bailey and CBC data journalist Valérie Ouellet were brought in to run more than a thousand computerized searches of the ICIJ database. They created their own database of Canadian entities and individuals and their connected offshore accounts.
Once names jumped out, Cribb and Oved had to read thousands of pages of documents to grasp the context and determine if there was any journalistic value. There were plenty of red herrings. For example, the Waterloo-based company Research In Motion, now BlackBerry, appeared repeatedly in communications. But upon further investigation, Oved found that the name was coming up because people in the leak had received emails telling them to update their BlackBerry software.
In other cases, the plodding re- search paid off. Stories that have come out of the Paradise Papers so far include the use of offshore trust funds by two generations of Liberal fundraisers, Stephen Bronfman and his godfather, retired senator Leo Kolber. Among the thousands of pages of documents were emails and financial records that appeared to show evidence of the use of fake invoices, secret payments and gifts to avoid paying tax.
Bronfman said in a statement he has “never funded nor used offshore trusts. His Canadian trusts have paid all taxes on all their income to the Canadian government.”
The documents also revealed that former prime minister Jean Chrétien was listed in an internal registry as having received 100,000 stock options in Madagascar Oil Ltd., a company registered in the tax-free haven of Bermuda, for consulting work. Chrétien told the Star and CBC in an interview that while he worked for Madagascar Oil for a short time in 2007, he never received any options, documents or annual reports, and did not know the company was incorporated in a tax haven.
“Here’s a guy who’s been at the highest levels of Canadian political power doing work for a company that apparently he has no idea is offshore,” said Star parliamentary reporter Alex Boutilier, who was brought in to work the political angle of the project. “It speaks to the nature of the offshore world where even accomplished business people and politicians may not be able to see through the structure of these companies.”
One question the reporters are often confronted with is “what’s the problem?” given that offshore trusts are legal.
“The problem is that billions of dollars in taxes from the wealthy and corporations aren’t being collected because of tax havens. And those billions for schools, hospitals and roads have to come from somewhere, so everyone else has to pay more,” said Oved.
“Remember, estimates put the offshore tax gap at $6-8 billion each year. That’s two Scarborough subways, or four rebuilt Gardiner Expressways, this year, next year, every year! Think of what that money could pay for and ask yourself why more people don’t care.”
Clearly, however, some people — those who leaked the documents whose identities are unknown — do care, and have taken risks in shining a spotlight on this poorly understood world of international finance. But why are so many large leaks of this nature — think Edward Snowden, various WikiLeaks releases, as well as the Panama and Paradise Papers — happening in recent times?
“I believe there’s a feeling that the powerful are untouchable, that authorities in a variety of realms have abdicated their responsibility and that the only way to change things is to get journalists to put it on the front page,” said Cribb.
“It creates a tremendous responsibility on us to make sure we dig deep, take the time to get it right and ensure we reflect our findings with texture and balance.”
“At the beginning, we didn’t know where to start. It was a total scattershot search.” MARCO CHOWN OVED STAR REPORTER