Leaks with Integrity
Air Date: November 12, 2016
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HEFFNER: I’m Alexander Heffner, your host on The Open Mind. Integrity. It’s seldom a word applied to politicians in 2016. Given the vested interest in an undemocratic governing class, office holders here in the US and around the globe, are more uniformly oligarchic than ever before. This is the painful reality president Obama described in his farewell speech at the UN, a world in which one percent of humanity controls as much wealth as the other 99 percent, will never be stable. The president continued, “I understand that the gaps between rich and poor are not new, but just as the child in the slum today can see the skyscraper nearby, technology now allows any person with a smartphone to see how the most privileged among us live, and the contrast between their own lives and others.” … “Expectations rise,’” he said, “faster than governments can deliver, and a pervasive sense of injustice undermine people’s faith in that system.” Today we’ll explore the system her refers to with Peter Bale, CEO of the Center for Public Integrity, which oversees the international Consortium of Investigative Journalists. Bale is the former vice president of digital news operations for CNN International. Peter it’s a pleasure to met you and have you here.
BALE: Alexander, thanks very much for having me.
HEFFNER: Because of your organization’s involvement in this revelation of the Panama Papers, I thought it would be pivotal for us, important for us to begin there, how did your team unearth what is being called the “crime of the century”, revealing to the American public the degree to which those actors that president Obama talked about at the UN, were manipulating uh, corrupting, and failing their constituencies, their populations with um, actions that we would deem to lack that fundamental integrity?
BALE: I, I think the, The Economist called it the “leak of the century”, and it was certainly that. whether it’s the crime of the century, I think there’s, you know there’s a few other candidates for that. The point about the leak, is that is the largest leak in history. It’s far outstripped the Snowden leaks and anything else that’s come out of the, and, and what it is about is a 5 year or so history, in the ICIJ of managing very very large leaks and coordinating and reporting the analysis of that information. It’s very important to remember the leak came to us from a character known as John Doe who delivered it to a Munich based newspaper, Suddeutsche Zeitung. When the uh, my colleagues at Suddeutsche Zeitung realized how big it was and the scale of it, they realize they needed to call their partners and friends at the ICIJ in order to analyze the scale of the leak and also to coordinate the reporting of it. The point of it is, to me, not so much the leak itself in a sense or the content, although that’s incredibly important, the radical aspect of it is 400 journalists working on this content around the world together, to make these revelations and, also the fact that over a years work, that leak did not leak.
HEFFNER: What was the common thread in terms of these journalists’ approach to the data?
BALE: As Louie, Louis Brandeis said, sunlight is the best disinfectant. And the point of this is to make this stuff known. You know, in some countries um, company registrars are open, but the whole point of the offshore network, the whole point of an offshore banking system, and the way these company structures works, is to create an impossible Russian doll set of companies that nest within each other and make the true ownership impossible to discover. And what you find with investigative journalists is, once you give them a little thread, just a little tiny thread that’s sticking out of that carpet, they pull and pull and pull and pull until they have to expose the whole lot. And, and the point of that is that, um, people who use offshore networks like this are trying to hide something. They’re either trying to hide the ownership of something, or they’re trying to hide the fact that they are avoiding, evading tax, or that they are shifting assets from one country to another. Very important to remember that there are legitimate reasons to use offshore companies, but there, what we’ve, what we’ve uncovered about this is the web uh, that exists of secrecy, and the web that allows people to move enormous sums, um, out of governments, out of the hands of tax people and so on. It’s not just about um, corruption. It is, it is, well it is fundamentally about corruption, but it’s a fundamental lack of transparency about the use of these, uh, offshore networks. So the point of, for me of the Panama Papers, and the last big project we did about 18 months ago now, called Swiss Leaks, which was about, uh, HSBC in Switzerland, um colluding, or creating circumstances for child smugglers, drug smugglers, and all sorts of people to use these networks, is to expose the network. And by that, what you’re really saying is to the governments and the OECD and so on is, ‘What are you going to do about it? You talk about transparency. You talk about, um, combating international corruption, what are you actually going to do about it? Here is the network. Now what are you going to do about it?’
HEFFNER: We think about the malicious hosts of the bank accounts, so the networks where the moneys reside. But we also have to reflect on the fact that the money was being transferred, presumably at some point from a domestic account, from a fund that is managed within a whole host of countries, from the UK to China.
BALE: So, in terms of finding the root cause, of what allowed the domestic entity to go unscrutinized…
HEFFNER: What have you found, and is really that the way we should think about it? Because there are always going to be those actors, those bad actors who create havens, whether it’s for terrorism or fraud.
HEFFNER: But thinking about how western and democratized governance can protect against those kinds of transfers, what have we discovered as a whole about the checks that can be put in place?
BALE: Well I think there are very, there are very few checks. I mean this is, this is the problem. One of, one of the issues you’ve got here, the leak, the Panama Papers leak primarily came from a law firm based on Panama called Mossack Fonseca. It’s only one of several major international law firms which provide these kind of Russian doll company structures which become impenetrable and allow you to do this kind of thing. It was particularly good at it, it was particularly skilled at it, and it was also a law firm that you would go to when other firms wouldn’t do what you needed to have done. They, their argument is, ‘Oh we were just doing it for our clients, the banks,’ So you know, there is a direct linkage if you like from a regulatory point of view between the responsibilities of domestic regulators in the UK and in the United States and everywhere else for their banks, uh, and then their connections to these companies that provide, these legal companies that provide these offshore entities. So, I think there’s gonna be another wave of the Panama Papers revelations really, as the regulatory inquiries into the involvement of the banks with Mossack Fonseca come out. And that will, that’ll happen this year or the next year. The, the financial conduct authority in the United, in the United Kingdom has asked all banks in the UK to report, uh, to it, on their engagement with Mossack Fonseca. It’s really, it provides the mechanism for hiding money and for hiding assets. And we see I the newspaper everyday, we see in magazines, um, all banks offering services to high net worth individuals to protect, to effectively protect their wealth tax. You know, it’s a, it’s an open secret.
HEFFNER: And that of course exacerbates the inequality that is so pervasive that the President discussed at the UN, and I thought I’d read a little more. “So just as I’ve pursued these measures here at home,” in terms of grappling with income inequality, “So has the United States worked with many nations to curb the excesses of capitalism, not to punish wealth, but to prevent repeated crises that can destroy it. That’s why we’ve worked with other nations to create higher and clearer standards for banking and taxation. Because a society that asks less of oligarchs than ordinary citizens will rot from within.” That’s exactly what happened here.
BALE: Well it’s a very powerful statement and it also, um, you know follows up on, it’s funny, the issue of inequality was very big two years ago when the uh, book by the French economist Thomas Piketty was out. Uh, and it’s sort of gone off the boiler a little bit and I think it’s very interesting that the President has raised it again. It’s been a big issue for him. It’s been a big issue theoretically for the former British Prime Minister David Cameron, and inequality is at the heart of this problem. It isn’t, this isn’t, our role in this and our interest in this, is not about bashing wealth and it’s not, it’s not anti-capitalistic, but, one of the things that I really liked about our coverage of the Swiss Leaks, uh, leaks about 18 months ago, was we had Thomas Piketty in that story explaining why this kind of secrecy and the transference of money out of government hands adds to inequality.
HEFFNER: It’s a rigged system. That is an example that is, without dispute, without question, the idea that the billionaires can be sheltered from any due responsibility to their fellow country men, whether it’s here in the states or the UK.
BALE: As Leona Helmsley would say, ‘Tax is for little people.’
HEFFNER: Right, little people, and the little people are charging back with a populist fervor which is something xenophobic and nativist but also rooted in that fundamental economic reality, so, Peter, what say you about the reforms that have been triggered as a result of the Swiss Leaks, the Panama Papers leaks, are the stakeholders, um, it seems to me that Brexit is not a direct link, um, nor is the Trump and Sanders phenomenon here, because it hasn’t incited the kind of policy solutions…
HEFFNER: That would protect people.
BALE: Okay, so I’m not a philosopher, Alexander, but I do have someopinions about this.
BALE: Uh, I’m, I’m just a journalist, but in my opinion part of the, and I’m you know, in a sense don’t get me started on Brexit because we could devote the next 25 minutes to that…
HEFFNER: Sure, sure, sure.
BALE: Because I’m very upset about it as a, as a UK citizen, as a citizen of the world.
HEFFNER: The, the problem, and the problem with that, is, in totality or, in terms of the ramifications of that decision, it, it doesn’t grapple with…
HEFFNER: The fundamental questions here.
BALE: Right, correct. So there’s a, there’s a group of people who clearly feel left behind. There’s a group of people who feel, particularly since the 2008 banking crisis, that the money has all gone to the bankers, that we put, that the governments concentrate much more on protecting the banking sector than they did on perhaps a tradition Keynesian response uh, to a recession of investing in infrastructure and so on. And so, you know, there’s a big group of people, economically disenfranchised people who are angry, and they are voting for Mr. Trump, or they’re voting for Brexit to give the establishment a bloody nose. I think on this issue of transparency though, uh, we have to look at whose interest it is to preserve these networks. And it’s in the interest of the wealthy and it’s sometimes in the interest of the governments, to be able to move money as they see fit, to fund things to, to, you know, you’ve gotta, we’ve follow the pathways of interest in this, and who’s actually keeping the offshore networks offshore and secret.
HEFFNER: But in that pursuit of identifying, um, within democratic governance, mechanisms to prevent that kind of transfer, um, because of the incrimination of the Prime Minister, the family, the Prime Minister being explicitly attached to this, you would think those, those populists would be clamoring for more regulatory scrutiny.
HEFFNER: So are there specific legislative or public policy acts…
HEFFNER: That have been instated since…
BALE: Yes, that’s a very important, very good point.
HEFFNER: The papers were published?
BALE: So, I come from New Zealand, and I was there recently giving a speech about he Panama Papers. New Zealand was identified by the leaker, and the New Zealand Prime Minister, John Key was identified by name by the leaker in his or her statement of intent, the manifesto. And what was extraordinary about that, was it was the only world leader who was mentioned by name in about an 800 word manifesto. And what was extraordinary to me when I went back to New Zealand is the government had announced a public inquiry into um, tax legislation in New Zealand and offshore, the use of offshore, um, trust, to avoid tax, and was about to launch new legislation to cover up all of those loopholes. That’s exactly the way it should work in a healthy democracy, that journalists expose these problems and politicians deal with them. It’s not us, not up to us to come up with the solutions. We expose the problem and say, ‘What are you going to do about it? What is the, you know what is the appropriate democratic response?’ and in that case, in New Zealand, there has been. There is a European Union inquiry going, European Commission inquiry going on now about this. As I said, the UK is investigating the role of it’s own banks. Less so in the United States but just because in that particular basket of leaks, there were very, there were relatively few US clients identified. But I mean, the US has got to look at Delaware, Nevada, Wyoming, these places that have, that have pretty elaborate structures to avoid scrutiny as well. You know there’s a domestic issue here too.
HEFFNER: In the United States, there are those same foreign entanglements, if you look at the Clinton Foundation and the Trump business. Um, how do you bring that same dimension of integrity to reporting on the conflicts of interest that are inherent in the business model of the foundation, both foundations, and the entire Trump business?
HEFFNER: I think it’s very important that we talk about those as potential conflicts of interest, or apparent conflicts of interest, because there are often perfectly reasonable explanations, but the only way you can get to those explanations is through a little bit of transparency and a little bit of explanation. I think organizations that are, uh, registered charities and registered non-profits really ought to be, um, very, very clear about the origins and source of their material and be prepared to explain it. And that includes the Clinton Foundation. Businesses will need there own, um, you know you know their own official criteria about this, but there needs to be an explanation of some of these things. Otherwise, you know the apparent conflict of interest then become a cover up. And the cover up, as we know from many things, is always worse, or in many cases worse uh, than the original act.
HEFFNER: So when public confidence in the integrity of our government is at an all time low…
HEFFNER: How do you insure integrity? How do we take steps to ensure integrity that has been so missing in the political process?
BALE: I’m not sure it’s missing so much as compromised. You know it is, it is very hard sometimes working for an organization that has, public integrity, in its name. you know that’s a pretty loft goal. And the objective is to hold governments and government organizations and state governments and others, including um, commercial companies, to hold them to account. Um, you know, I think it’s not so much, that I think most politicians strive for, to do their public service, they’re there to do public service. There is a direct connection though in the United States with politics and money. that is so intertwined um, that the compromises are very clear and constant, you know, because of the electoral cycle, because of the cost of politics here. The, the intrusion of money into political acts and regulatory acts, is incredibly pervasive and it has stunned me in a sense journalistically with the kind of projects that we’re doing. Virtually every area that we look at, whether it’s the environment, or direct money in politics, or health, or juvenile justice, has a money in politics element, where vested interests are spending money on either combatting regulation or influencing political decision making, right through the board, and it affects, tends to affect the weakest in society. It tends to effect minorities, racial minorities, and economic minorities, which are often very much the same thing.
HEFFNER: How do you model the integrity within the reporting team that you lead? There, there was a discussion about tax returns just as Edward Snowden revealed NSA secrets, this notion that a conscientious objector within the IRS could reveal a leading presidential candidate’s returns, and have a kind of moral high ground in the same way that, with Snowden, there was at least an argument he was articulating, that he had the moral high ground and there was an, an injustice being carried out that he was identifying. Um, what is the relationship between these sources…
HEFFNER: The courtship of these sources and these leakers, and your responsibility because you could very fairly argue that there has been an abdication of integrity with respect to Wikileaks and some of the activities of Greenwald and Snowden.
BALE: I agree on Wikileaks and I’ll address that in a moment. I’m not sure about Glenn Greenwald and Edward Snowden. I have, I don’t know what you’re referring to there, but I haven’t seen them expose sources or do things in a way that I think would be damaging to the source or, or reflect ill intent. I think there’s a slightly different issue with Wikileaks which I’ll address…
BALE: If you don’t mind.
BALE: Um, I think the, these are situational questions. I saw Daniel Ellsberg, the leaker of the Panama Papers, I’m sorry, Daniel Ellsberg, the leaker of the, uh, Pentagon Papers, talking about, he and um, Edward Snowden having a higher duty than their employment contracts with the NSA and the Pentagon, and that duty was to the Constitution, and the Constitution trumps all. And I think that’s a, that’s, you, I think you should never forget the importance of the First Amendment. And I think it is, something that I can tell you as an American, is incredibly precious to me running an American organization that is theoretically protected y the First Amendment. So, I think there is an aspect here of genuine public interest. And of course that always becomes, is it just what the public is interested in or is there a genuine public interest? And if you’re exposing over-reach by government departments, or you’re exposing hypocrisy and corruption, there is clear public interest there. Uh, in the case of the Panama Papers, I think it’s also very clear that President Obama, David Cameron, The Organization for Economic Cooperation and Development, and other world leaders have talked abut the need for this information to come out, so, we feel we have a very strong uh, public interest, uh, protection in a sense.
HEFFNER: Contrast that against the Wikileaks philosophy.
BALE: Yeah, I think the Wikileaks philosophy really change. Uh, Julian Assange, the founder of Wikileaks uh, had a major sort of personal and moral crisis after his uh, deal with the Guardian and the New York Times and El Pais and Le Monde, to release the Bradley Manning, or Chelsea Manning material. Uh, and and, he decided that he wanted to just have it all out there, that he didn’t, he no longer wanted the journalistic filter. Now, I respected the use of that journalistic filter, because what it means is that you have uh, people with the public interest in mind, uh, assessing it, assessing the risk of publishing those people’s names, and assessing that material. Snowden chose to do his leak by using the journalistic filter, he did not leak the material himself publicly. He leaked it to people he felt he could trust to make good editorial judgement…
HEFFNER: And he also didn’t…
BALE: To protect those people, just…
HEFFNER: Have political animas…
BALE: That’s true, but, in Julian’s case, Julian Assange’s case, he’s, or Wikileaks has decided to be very absolutist about this, and we don’t follow that particular, um, vision. We are doing this from a journalistic basis. There are tens of thousands of people’s names and children’s names, and information that’s in the Panama Papers, that we’ve deliberately chosen not to release. We’ve gone for a public interest, solely public interest, um, approach to that. And that does mean we are sitting on, you know, cast quantities of information. But we’ve made a journalistic determination about the value of that. Wikileaks regards that as a compromise too far. We’re journalists. I’m sorry they’re not. They’ve chosen to be sort of absolutist about this and we’re not in that game.
HEFFNER: All you have to do is look a the evolution of the Twitter account, the Wikileaks handle, and see that the tone went form more dispassionate, revelatory right, to political snark, sarcasm, and even some incest with the alt-right movement in this country, which is interesting, that an open source network would team up with a cult of bigots in perpetuating some stereotypes about the leading, first female presidential candidate. But in any, in any event, the campaign is behind us, in so far as the, what I think, you mentioned about fidelity to the Constitution is so important, and that is that there could be a higher calling,
HEFFNER: That supersedes the professional…
BALE… of secrecy, absolutely…
HEFFNER: And so, in the instance of Snowden, the parallel to an actor who wants for expose the, either fraud or unfairness inherent in the tax returns of a leading presumptive office holder, there would have been an argument this campaign, and there still is that, that supersedes and IRS employees relationship with that entity, because the threat is to our Constitution…
HEFFNER: An authoritarian who will not govern democratically and therefore, it’s shocked me that over the course of this campaign there hasn’t been that kind of source stepping forward, and it may still happen, but, what, why do you think that hasn’t happened? I’ve asked folks at Pro-Publica, across the investigative journalism circuit. The only answer I’ve gotten is, “they’d have to flee like Snowden,” and no one in the IRS is willing to, or was willing to commit something that would be a felony for the public good.
BALE: Well I think the, case of. well the treatment of whistle blowers, if this person would be a whistle blower, the treatment of whistle blowers under the Obama administration, I think has shocked us all. The, Eric Holders’ behavior towards journalists and whistleblowers has been absolutely extraordinary to me as a, as an Attorney General through, throughout that period. So I think the treatment of whistle blowers has shown people, has probably made an enormous number of state employees extremely nervous in the United States. And then also you’ve got people, got them pursuing people like James Risen of the New York Times for years on end to reveal sources. And I think these are direct assaults on the First Amendment, and a direct assault on the sanctity if you like, not that journalism is necessarily a sacred space, I mean that sounds pretentious, but, you know you’ve got to be very, very, careful when you start attacking the messenger and when you close or make so dangerous the possibility of whistleblowing that um, it becomes impossible for someone to, someone to do that, with no matter what the, they need protection. They need a system that protects them. They need a system which assesses that material, and a system which protects the journalists with, with, who receives them.
HEFFNER: And doesn’t that require that there be an integrity of the whistle blower?
BALE: Yes. And I think that’s very hard to measure sometimes. There is always, you know in my experience, journalistically over many years, there’s always an intent behind someone wanting to get information out. It’s either the honorable, ‘I think this needs to be got out because it’s like, Abu Ghraib for example,’ or there is a malicious or a bitter intent somewhere along the line. But, you know, we’ve got to work that out. And that’s that’s, journalists and editors do that every day of the week. What’s the intent behind this leak, is the leak more important than the intent? Which is often the case, you know that you, ‘Why am I, why am I being given this leak?’ is the first question you ask. And then you look at the leak and you say, ‘How important is it? Is it in the public interest to get this out? How do we cover the fact that we, how do we explain the fact that we don’t know the intent behind the leak?
HEFFNER: And presumably Peter, to conclude, those are the questions that your journalists are asking folks in the wake of the Panama and Swiss Leaks. What is on their agenda now, moving forward into 2017?
BALE: Well once you become highly competent as the ICIJ has become, and let me just be very very clear about this, you know, that is an extraordinary team of journalists, that is a kind of self contained part of an operation that I’m responsible for, and I’m very proud of what they’ve achieved, once you become competent uh, in dealing with that kind of material, you tend to get more of it, you know. That is an organization that is not deliberately set up to do this whole offshore banking expose area. It just happens to have been uh, an area that they’ve done I think four or five major leaks on, so once you show you can be trusted, that you don’t expose the source, that you can get the material assessed, you become a good place to go. And so there are other leaks coming.
HEFFNER: Peter Bale, CEO of the Center for Public Integrity, thank you for joining me today.
BALE: Thanks so much Alexander, it’s really fascinating to talk to you about it all.
HEFFNER: And thanks to you in the audience. I hope you join us again next time for a thoughtful excursion into the world of ideas. Until then, keep an open mind. Please visit The Open Mind website at Thirteen.org/openmind to view this program online or access over 1,500 other interviews. And do check us out on Twitter and Facebook @OpenMindTV for updates on future programming.