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Why Accuracy about Wikileaks Matters

Let me preface this post by saying that I’m perfectly willing to accept that Julian Assange is a narcissist, accused rapist, destructive hypocrite serving as a willful tool of Russia. I’m also happy to concede that his role in publishing the DNC and Podesta emails may have played a significant part in getting Donald Trump elected (though I think it’s down the list behind Comey and Hillary’s own (in)actions). Please loathe Julian Assange–that is your right.

But please, also, try to be accurate about him and Wikileaks.

There have been two funny claims about Wikileaks since the leak of hacked emails from Emmanuel Macron associates was announced on 4Chan on Friday. First, analysis of how the hashtag #MacronLeaks spread emphasized that Wikileaks got more pickup than right wing propagandist Jack Posobiec or the other right wing promoters of it.

The most important surge came when WikiLeaks began tweeting the hashtag. The tweet itself was cautious, pointing out that the leak “could be a 4chan practical joke,” but it was retweeted over 2,000 times, compared with over 600 times for Posobiec.

Yet people have taken that to suggest that everyone who shared Wikileaks’ links to the materials were themselves promoting the emails positively. That is, they ignored the extent to which people share Wikileaks tweets critically, which itself added to the buzz about the dump. The surge in attention, in other words, was in part critical attention to what Wikileaks was doing with respect to the leak.

More troubling, still, outlets including NPR claimed that Wikileaks posted the documents (it has since issued a correction).

Finally, there are absurd pieces like this which, after babbling that, “Macron, by contrast, is favored by those who want … a France looking to the future rather than clinging to the fearful and fictional nostalgia promulgated by Le Pen,” states,

Literally at the 11th hour, before the blackout would silence it, the Macron campaign issued a statement saying it had been hacked and many of the documents that were dumped on the American 4Chan site and re-posted by Wikileaks were fakes.

On top of being poorly edited — Macron’s statement said nothing at all about who dumped the documents — the claims as to both 4Chan and Wikileaks are not technically correct. The documents weren’t dumped on 4Chan, a post on 4Chan included a link to a Pastebin with them. More importantly, Wikileaks didn’t “re-post” them, though it did post magnet links to them.

The importance of the distinction becomes evident just two paragraphs later when the article notes that some of the tweets in which Wikileaks linked to the documents described the vetting process it was undertaking.

Meanwhile, Wikileaks jumped on the document dump, but didn’t seem to be familiar with the material in it. Responding to the Macron statement that some of the items were bogus, Wikileaks tweeted, “We have not yet discovered fakes in #MacronLeaks & we are very skeptical that the Macron campaign is faster than us.”

Curiously, the article doesn’t link to WL’s first tweet, posted less than an hour after the 4Chan post, which said it could be a 4Chan practical joke.

In any case, contrary to what some idiotic readings of this article claim — that Macron succeeded in fooling Wikileaks — in fact, Macron has not succeeded, at least not yet, because Wikileaks has not posted the documents on its own site (Wikileaks could yet claim it had determined the documents to be real only to have Macron present proof they weren’t). Indeed, while Wikileaks expressed skepticism from the start, one thing that really raised questions for Wikileaks was that Macron so quickly claimed to have determined some were fake.

Plus, it’s not actually clear that Macron did fool the hackers who passed them onto the 4Chan source. Here’s the full description from Mounir Mahjoubi, the head of Macron’s digital team, on what their counteroffensive looked like.

“We also do counteroffensive against them,” says Mahjoubi.

[snip]

“We believe that they didn’t break through. We are sure of it,” said Mahjoubi. “But the only way to be ready is to train the people. Because what happened during the Hillary Clinton campaign is that one man, the most powerful, [campaign chairman] John Podesta, logged on to his [fake] page.”

To keep the entire Macron campaign aware of such dangers, Mahjoubi said, “Every week we send to the team screen captures of all the phishing addresses we have found during the week.” But that’s just the first phase of the response. Then the Macron team starts filling in the forms on the fake sites: “You can flood these addresses with multiple passwords and log-ins, true ones, false ones, so the people behind them use up a lot of time trying to figure them out.”

If Mahjoubi was being honest about his certainty the hackers didn’t succeed, then the campaign would have no reason or means to feed disinformation. And the details offered here appear to be about disinformation in response to phishing probes — that is, disinformation about metadata — not disinformation about content.

But now, between the Daily Beast’s gloating and the sharing of it with even less factual gloating, coupled with Macron’s quick declaration that the dump included fake documents, raises real (but potentially unjustified!) questions about whether the campaign added the Cyrillic metadata that got so much attention. Not only has Wikileaks’ vetting process not (yet) been exposed as a fraud, but the reporting may create even more distrust and uncertainty than there was. [Note, I posted a tweet to that effect that I have deleted now that I’m convinced there’s no evidence Macron faked any documents.]

Moreover, even if it is the case that GRU hacked Macron and Wikileaks would have happily published the emails if they passed its vetting process (which are both likely true), Wikileaks didn’t get and post the documents, which itself is worth noting and understanding.

In other words, some inaccuracies — and the rush to gloat against Wikileaks — may actually have been counterproductive to the truth and even the ability to understand what happened.

And this is not the only time. The other most celebrated case where inaccurate accusations against Wikileaks may have been counterproductive was last summer when something akin to what happened with the Macron leak did. Wikileaks posted a link to Michael Best’s archived copy of the AKP Turkish emails that doxed a bunch of Turkish women. A number of people — principally Zeynep Tufekci — blamed Wikileaks, not Best, for making the emails available, and in so doing (and like the Macron dump) brought attention to precisely what she was rightly furious about — the exposure of people to privacy violations and worse. Best argues that had Tufekci spoken to him directly rather than writing a piece drawing attention to the problem, some of the harm might have been avoided.

But I also think the stink surrounding Wikileaks distracted focus from the story behind the curious provenance of that leak. Here’s how Motherboard described it.

Here’s what happened:

First, Phineas Fisher, the hacker notorious for breaching surveillance companies Hacking Team and FinFisher, penetrated a network of the AKP, Turkey’s ruling party, according to their own statement. The hacker was sharing data with others in Rojava and Bakur, Turkey; there was apparently a bit of miscommunication, and someone sent a large file containing around half of akparti.org.tr’s emails to WikiLeaks.

WikiLeaks then published these emails on July 19, and as some pointed out, the emails didn’t actually seem to contain much public interest material.

Then Phineas Fisher dumped more files themselves. Thomas White, a UK-based activist also known as The Cthulhu, also dumped a mirror of the data, including the contentious databases of personal info. This is where Best, who uploaded a copy to the Internet Archive, comes in.

Best said he didn’t check the contents of the data beforehand in part because the files had already been released.

“I was archiving public information,” he said. “Given the volume, the source, the language barrier and the fact that it was being publicly circulated already, I basically took it on faith and archived a copy of it.”

Without laying out all the details here, I think there are some interesting issues about this hack-and-leak that might have gotten more scrutiny if the focus weren’t Wikileaks. But instead, the focus was entirely on what Wikileaks did (or actually, on blaming Wikileaks for what Best did), rather than how the hack-and-leak really happened.

I get that people have the need, emotionally, to attack Assange, and I have no problem with that. But when emotion disrupts any effort to understand what is really going on, it may make it more difficult to combat the larger problem (or, as lefties embrace coverage of the Bradley Foundation based on hacked documents and more mass hack-and-leak reporting gets journalism awards, to set norms for what might be legitimate and illegitimate hack-and-leaks).

If you hate Assange, your best approach may be to ignore him. But barring that, there really is a case for aspiring to factual accuracy even for Wikileaks.

Update: Fixed description of what WL actually linked to — h/t ErrataRob.

Update: This article provides more detail on the hack and Macron’s attempts to counter the hackers.

“Il y a des dossiers qui ont été ajoutés à ces archives. Des dossiers dont on ne sait pas à quoi ils correspondent. Qui ne sont pas des dossiers d’emails, par exemple. Ensuite, il y a des faux emails qui ont été ajoutés, qui ont été complétés. Il y a aussi des informations que nous-même on avait envoyées en contre-représailles des tentatives de phishing !”, a expliqué Mounir Mahjoubi.

So some of the added documents (which, incidentally, are the ones that show Cyrillic metadata) are from someplace unknown, not the five hacked email boxes. There are fake emails, described has “having been completed,” which may mean (this is a guess) the hackers sent emails that were sitting in draft; if so there might be fake emails that nevertheless come with authenticating DKIM codes. The description of what the campaign did — counter-attacks to phishing attempts — is still not clear as to whether it is metadata (faked emails) or content, but still seems most likely to be metadata.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

Who Are The Non-Celebrities In The Panama Papers?

In the first stories about the Panama Papers, we got the names of a bunch of politicians, a few criminals, sports and other celebrities and one or two names of rich people. But in focusing solely on this kind of person, we miss the major point about tax havens. They are used by hundreds of thousands of people, including many who are not billionaires and who are not famous or otherwise newsworthy. They are commonly used by doctors, lawyers, accountants, small business owners and those who inherited money from such people.

Here’s a chart from the New York Times showing the mix of people making up the top 1% in income in the US; the chart is from 2012 and uses 2007 data. The cut-off for this level is the Census Bureau figure of $380K, while other studies put it higher. The Fed Survey of Consumer Finances, a better survey, has it at $690K in 2007. The cut-off for the top 1% in wealth was estimated at nearly $8.4 million in 2007. Those numbers went down after the Great Crash, but recovered smartly. By 2013, the cut-off for the top 1% in wealth was back to nearly $8 million, and climbing.

Lisa Kiester of Duke University, a sociologist who has published on the 1% describes a group she calls the double rich in this article. These are people who are in the top 1% in both income and wealth. Their median wealth was about $12 million in 2010, and their median income was in the range of $1.2 million. Both have no doubt risen since then. Kiester does not give an estimate of the number of the double rich, but this New York Times article, using 2007 data, says that there is about a 50% overlap between the two groups. There were about 117 million households in 2010 according to the Census Bureau. From that we can estimate that there are about 560,000 households making up the double rich.

Kiester examines the lack of discontent with wealth and income inequality in this 2014 paper. She offers five explanations with supporting evidence from research:

!. Homophily, the tendency to hang out with people like us. We aren’t often exposed to the impact or the magnitude of wealth inequality.

2. People think things will get better because they always have.

3. There is some evidence of social mobility, and it’s even possible for people to think they could move into the top 1%.

4. People are too busy, distracted and stressed to care.

5. People focus on poverty, not inequality. Academics are concerned about inequality because they think huge wealth gaps lead to power imbalances that favor the rich at the expense of the rest of us. That’s completely outside the scope of most people’s worries about money.

Gabriel Zucman, one of Piketty’s collaborators, estimates that individuals have approximately $962 billion of unreported assets in tax havens. Source: Data figure 4 tab 1 from a spreadsheet found here; click on Tables and figures included in the book. The book is The Hidden Wealth of Nations. For a description of Zucman’s methodology see this by Cass Sunstein.

Kiester says that 56% of the top 1% by net worth were self-employed in 2010. These are people who have the means to move money into tax havens, as are the rest of the top 1%. There are hundreds of thousands of US citizens who would benefit from tax havens, and there is so much money out there by Zucman’s estimate that it must be that case that tens of thousands of them have done so.

The ICIJ and its participating groups name politicians, celebrities, and crooks who hide their wealth in tax havens, and who won’t be prosecuted, but at least are shamed. But what about the huge number of the 1% who hide their wealth abroad and are not even shamed for their corruption?

This kind of disclosure would help break through the mental barriers to making inequality itself a force in politics.

Update April 15, 2016 From ICIJ:

The law firm’s [Mossack Fonseca] leaked internal files contain information on 214,488 offshore entities connected to people in more than 200 countries and territories. ICIJ will release the full list of companies and people linked to them in early May.

Notre Dame undergrad (math); JD, Indiana University at Bloomington; 1st Lieutenant, US Army.; private practice in corporate and securities law; Assistant AG in Tennessee for consumer protection and securities; Blue Sky Securities Commissioner, Tennessee; private practice, bankruptcy and corporate law.

I have had a lifelong interest in economics. For most of my career, that interest was practical, focused on the problems in front of me. Lately I have been more interested in economics as a theory, especially its impact on the lives of people like those I met in my bankruptcy practice, and on the politics of money in the US. I also enjoy reading philosophers, starting in college and steadily expanding my reading ever since. I wrote at FireDogLake for a number of years.

Generally, I think the problem facing the US is the dominance of neoliberal discourse. I think it clouds the vision, and limits the kinds of problems that can be identified and solved. For example, the existence and danger of climate change can easily be identified in a scientific discussion. However, the problem does not fit the neoliberal discourse because science insists that the pursuit of individual and corporate self-interest will lead to devastation. In neoliberal discourse, the pursuit of self-interest always leads to Eden.

The neoliberal project has two prongs. One is the police function of crushing dissent and alternative views. The police function is provided by government agencies and private and institutional actors. The counterpart is the economic system , which is operated by government and by private and institutional actors. Some of these actors operate in both spheres. I focus on the second prong.

Monday Morning: The Urge to Merge

In my eyes, indisposed
In disguises no one knows
Hides the face, lies the snake
The sun in my disgrace

— excerpt, Black Hole Sun by Soundgarden

Looks like this week is all about mergers. Enjoy this simulation on replay several times while listening to Soundgarden’s Black Hole Sun while we dig in.

Roll Call

  • Yahoo’s vulnerability brings all the nasty suitors to the yard (MarketWatch) — If Daily Mail wins, Yahoo will be one massive tabloid, and Tumblr will become a cesspool. Bidding’s open until next Monday; what other potential buyers may emerge this week?
  • Big names in hotels to join after shareholders approve Marriott offer for Starwood Hotels (UPI) — The vote came last Friday after Chinese insurance holding group Anbang withdrew from bidding.
  • Merger of beer producers SABMiller and A-B InBev still in holding pattern (Milwaukee Business Journal) — The deal is languishing for approval by South Africa’s Competition Commission. Part of SABMiller was once South African Brewing.
  • UK balks at Hutchins and Telefonica tie up (Reuters) — Cousins across the pond better watch out; this proposed merger, even if shot down by regulators, portends another telecom marriage ahead. With UK’s Competition and Markets Authority recommending a spin-off of either Three Mobile or O2 mobile network business in order to approve the deal, a divestment of one of these may happen anyhow.

The Yahoo and Hutchins-Telefonica deals bear scrutiny for their potential for mass surveillance depending on how the proposals play out. Yahoo could end up operating under UK laws, and some part(s) of either Hutchins or Telefonica could end up with a non-UK or non-EU partner.

All of these proposed mergers were in the works before the Panama Papers were released; none them appear to be motivated solely by tax reduction, but instead by economies of scale and weak market conditions. It’d be nice if executives of all companies raking in profits realized that failing to pay their hourly workers well has a direct impact on overall market demand. Their businesses could retain autonomy instead of spending time and money on M&A they could spend on employees’ wages.

Speaking of Panama Papers: revelations still shaping policy and politics

  • U.S. Treasury still working on tax rules to reduce tax avoidance and evasion by offshoring (Bloomberg) — Many large holding company structures use intra-group loans to move money out of the U.S. The new rules which may limit these moves may affect not only U.S. corporations but foreign corporations with subsidiaries in the U.S.
  • UK’s PM David Cameron facing heat about tax avoidance strategies used by his family (Scotsman) — Strategies included a tax-free gift of 200,000 pounds to Cameron from his mother. He is supposed to appear before Parliament for questioning.
  • Mossack Fonseca still getting hacked due to poor security response (The Register) — At what point do we ask if MossFon is really just a honeypot, given continued insufficient security?

Just for fun: Rockets!
If you didn’t watch SpaceX’s Falcon 9 launch on Friday, you really ought to make some time to do so for entertainment purposes. The first stage of the rocket returned successfully for reused, nailing a landing on a drone ship — a DRONE SHIP AT SEA. I missed the fact the landing pad was a drone vessel when I watched the first attempts. It’s a really narrow thing, landing on a speck of a pad in the ocean which is pushed around a bit by ocean currents in spite of the drone ship’s programming and/or remote control. (I would love to know who named the drone ship, ‘Of Course I Still Love You’ and why…)

What’s similarly remarkable is the SpaceX team — their excitement is off the map, rather like watching a K-12 FIRST LEGO robotics competition than an aeronautics business at work. Note in the video the team’s reaction just seconds (about 27:30) to the first stage return landing; it’s as if they KNEW they had it nailed before it happened. Wouldn’t you love to know just how they knew?

Also for grins: compare SpaceX’s landing on Friday (start at 23:48 into video) to competitor Blue Origin’s recent rocket return. Blue Origin is owned by Amazon’s Jeff Bezos; the return is so smooth and slick, but it’s in the west Texas desert where potential disruption of the landing has been minimized. Important to keep in mind that SpaceX actually delivered a payload after reaching orbit, where Blue Origin is still limited to sub-orbit elevation.

With that our week’s been launched — let’s go!

Blogger since 2002, political activist since 2003, geek since birth. Opinions informed by mixed-race, multi-ethnic, cis-female condition, further shaped by kind friends of all persuasions. Sci-tech frenemy, wannabe artist, decent cook, determined author, successful troublemaker. Mother of invention and two excessively smart-assed young adult kids. Attended School of Hard Knocks; Rather Unfortunate Smallish Private Business School in Midwest; Affordable Mid-State Community College w/evening classes. Self-employed at Tiny Consulting Business; previously at Large-ish Chemical Company with HQ in Midwest in multiple marginalizing corporate drone roles, and at Rather Big IT Service Provider as a project manager, preceded by a motley assortment of gigs before the gig economy was a thing. Blogging experience includes a personal blog at the original blogs.salon.com, managing editor for a state-based news site, and a stint at Firedoglake before landing here at emptywheel as technology’s less-virginal-but-still-accursed Cassandra.

Wednesday Morning: Whip It Good

When a problem comes along you must whip it
Before the cream sits out too long you must whip it
When something’s going wrong you must whip it

— excerpt, Whip It by Devo

Can’t tell you how many times I’ve thought of this song in the last couple of days.

Panama Papers fallout
Still not as much reporting showing up in global media as one might expect from a collaborative effort the size of that mustered by the International Consortium of Investigative Journalists (ICIJ) and German news outlet Süddeutsche Zeitung (SZ) around the leaked Panama Papers. But there is a slowly building debris field accumulating in the leak’s wake.

  • Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigned after ~7.5% of the population showed up at a protest rally (Channel NewsAsia) — But you probably know this much already, right? Icelanders don’t mess around with even so much as the appearance of conflict. Hope somebody will tell us if bananas are a thing at protests in addition to eggs, yogurt, and tissue paper. (see photo).
  • Chair of Transparency International’s Chile chapter resigned (Transparency.org) — Oops. But kudos to Transparency for the prompt and direct reaction after the leak revealed the Chilean chair had been involved with
  • China squelched reporting ties to leadership and revelations in Panama Papers (SCMP) — The suppression includes redirecting search engine queries to stories about sports figures involved in the scandal.
  • Amazon’s cloud now home to the Panama Papers source documents (Forbes) — And tiny Australian software firm Nuix has been helping with sifting through the documents.

What will today bring?

Related? Pfizer and Allergan nix their merger
Proposed changes to Treasury Department rules are blamed for the breakup of this corporate marriage, in which Pfizer would have moved its headquarters to Allergan’s location in Ireland to avoid U.S. tax rates. Public sentiment about offshoring after the Panama Papers leak may have clinched this split.

Miscellany

  • Heat pump technology could reduce energy use in clothing dryers by 40% (Phys.org) — Here’s a great use of our tax dollars, this research by U.S. Department of Energy’s Oak Ridge National Laboratories. Dryers are the largest consumer of electricity in households equipped with them. As much of U.S. energy is produced by fossil fuel, this could have a dramatic impact on CO2 output. Let’s hope Congress encourages more of this kind of research as well as tax credits for related corporate R&D and consumer purchases.
  • Orbeus, a photo-recognition software company, has been acquired by Amazon (Business Insider) — Imagine getting this message the next time you upload your personal photos to your Amazon Prime Photo account: “People who purchased your spouse’s belt on Amazon also purchased this underwear/lubricant/sex toy.” Just, no.
  • STARZ premium cable channel will now offer a direct streaming service for cord cutters (Ars Technica) — The offering will work much like HBO Direct. But will ISPs that offer STARZ (like Comcast and Charter) attempt to throttle this service as it cuts into their bundled sales? Net neutrality is going to get a work out as more cable channels offer their content straight to consumers.
Blogger since 2002, political activist since 2003, geek since birth. Opinions informed by mixed-race, multi-ethnic, cis-female condition, further shaped by kind friends of all persuasions. Sci-tech frenemy, wannabe artist, decent cook, determined author, successful troublemaker. Mother of invention and two excessively smart-assed young adult kids. Attended School of Hard Knocks; Rather Unfortunate Smallish Private Business School in Midwest; Affordable Mid-State Community College w/evening classes. Self-employed at Tiny Consulting Business; previously at Large-ish Chemical Company with HQ in Midwest in multiple marginalizing corporate drone roles, and at Rather Big IT Service Provider as a project manager, preceded by a motley assortment of gigs before the gig economy was a thing. Blogging experience includes a personal blog at the original blogs.salon.com, managing editor for a state-based news site, and a stint at Firedoglake before landing here at emptywheel as technology’s less-virginal-but-still-accursed Cassandra.

Tuesday Morning: What’s News, Tiwes?

[Screencap, Newsmap, 0815h EDT]

[Screencap, Newsmap, 0815h EDT]

It’s the day belonging to Tiwes, the Norse god of single combat. What will we engage in battle about today? Looks like sketchy news coverage is a good reason, after taking a peek at Newsmap this morning to check global media coverage of the Panama Papers.

Very thin reporting, according to the results. Canada, come on — Bill Cosby is bigger news than global corruption?

Ditto for India, which covered the HSBC money laundering scandal exhaustively last year. Very little coverage in that country’s English language outlets.

Don’t get all peeved off about the U.S. media, which hasn’t done a particularly good job over the last 24 hours. It’s not just us; the lack of coverage may say something about media ownership around the world.

One possible example on shore here: the acquisition of the Las Vegas-Review Journal last year. Nevada happens to be the eighth most popular tax haven in the world, and Las Vegas is its heart. Was this paper acquired in order to influence reporting in and about this topic?

Mossack Fonseca has a subsidiary in Las Vegas, by the way.

Let’s take a look at science and technology news…

  • No change yet to claims that Panama Papers were obtained by an attack on Mossack Fonseca’s email server (The Register-UK) — Of particular note, this observation by this tech news outlet:

    To date, The Register hasn’t seen a strong presence from the tech sector in the staged release of the documents, perhaps because the “Double Irish Dutch Sandwich” tactic favoured in this business works without hiding companies’ links to their international associates.

    The comments at that link are rather interesting, offering both a perspective from our overseas “cousins” as well as technical assessment about the leak.

  • Are you ready for some Thursday night Twitter streaming? (WaPo) — NFL’s awarded a deal to Twitter for streaming some of its games. This is an interesting development, given how much co-watching TV Twitter users do.
  • I’m afraid I can’t do THAT, Dave: humans aroused by touching robots special places (Phys.org) — Ewww. Don’t ask me to travel through the Uncanny Valley with you on this one.
  • Revolv’s home automation hub now a casualty in the Internet of Things universe (BoingBoing) — Device fell out of the product plans for Google’s home automation subsidiary, Nest. Unfortunately, Revolv was sold with a lifetime subscription which will be defunct in May.
  • “Routine management reshuffle” replaces three senior execs at China’s telecom manufacturer ZTE (Reuters) — coincidentally happens weeks after U.S. authorities revealed attempts by ZTE to circumvent sanctions against Iran.
  • Name a non-Zika disease also transmitted by Aedes aegypti mosquitoes, facing a drastic vaccine shortage (Science) — You win if you said yellow fever, which has no cure and can be deadly.
  • Article 27: Algorithmic Politics (Furtherfield) — Necrocapitalism. Wrap your head around that term. A thought-provoking essay about a world where algorithms are our political system.

That’s enough for your coffee break or lunch hour. Catch you here tomorrow morning!

Blogger since 2002, political activist since 2003, geek since birth. Opinions informed by mixed-race, multi-ethnic, cis-female condition, further shaped by kind friends of all persuasions. Sci-tech frenemy, wannabe artist, decent cook, determined author, successful troublemaker. Mother of invention and two excessively smart-assed young adult kids. Attended School of Hard Knocks; Rather Unfortunate Smallish Private Business School in Midwest; Affordable Mid-State Community College w/evening classes. Self-employed at Tiny Consulting Business; previously at Large-ish Chemical Company with HQ in Midwest in multiple marginalizing corporate drone roles, and at Rather Big IT Service Provider as a project manager, preceded by a motley assortment of gigs before the gig economy was a thing. Blogging experience includes a personal blog at the original blogs.salon.com, managing editor for a state-based news site, and a stint at Firedoglake before landing here at emptywheel as technology’s less-virginal-but-still-accursed Cassandra.

Why Do They Call It Panama Papers, Anyway?

Over the weekend, a bunch of media outlets let loose shock and awe in bulk leak documents, PanamaPapers, with project leaders ICIJ and Sueddeutsche Zeitung — as well as enthusiastic partner, Guardian — rolling out bring spreads on a massive trove of data from the shell company law firm Mossack Fonseca.

If all goes well, the leak showing what MF has been doing for the last four decades will lead us to have a better understanding of how money gets stripped from average people and then hidden in places where it will be safe from prying eyes.

Before I raise some questions about the project, I wanted to point to one of the best pieces of journalism I’ve seen from the project so far: this Miami Herald piece showing how its high end real estate boom has been facilitated by the money laundering facilitated by MF.

At the end of 2011, a company called Isaias 21 Property paid nearly $3 million — in cash — for an oceanfront Bal Harbour condo.

But it wasn’t clear who really owned the three-bedroom unit at the newly built St. Regis, an ultra-luxury high-rise that pampers residents with 24-hour room service and a private butler.

In public records, Isaias 21 listed its headquarters as a Miami Beach law office and its manager as Mateus 5 International Holding, an offshore company registered in the British Virgins Islands, where company owners don’t have to reveal their names.

[snip]

Buried in the 11.5 million documents? A registry revealing Mateus 5’s true owner: Paulo Octávio Alves Pereira, a Brazilian developer and politician now under indictment for corruption in his home country.

A Miami Herald analysis of the never-before-seen records found 19 foreign nationals creating offshore companies and buying Miami real estate. Of them, eight have been linked to bribery, corruption, embezzlement, tax evasion or other misdeeds in their home countries.

That’s a drop in the ocean of Miami’s luxury market. But Mossack Fonseca is one of many firms that set up offshore companies. And experts say a lack of controls on cash real-estate deals has made Miami a magnet for questionable currency.

The story is deeply contextualized with localized reporting that goes beyond the leaked documents. And it can lead to policy changes — restrictions on cash real estate transactions — that can help to stem (or at least redirect) the flow of this corrupt money. You could tell similar stories from big cities around North America (this has been a particular focus in NYC and Vancouver). And with effort, cities could crack down on such cash transactions, with all the negative effects they bring to localities.

But much of the other reporting so far remains at the level of shock and awe. Biggest leak ever! Putin Putin Putin! And much of the reporting reflects not just editorial bias, but some apparent innumeracy (though no one has yet released the real numbers) to claim that people from evil countries are proportionally more corrupt than people from good countries like the UK.

Where did these documents come from?

Screen Shot 2016-04-04 at 10.00.01 AM

Here’s how SZ describes how they got these documents.

Over a year ago, an anonymous source contacted the Süddeutsche Zeitung (SZ) and submitted encrypted internal documents from Mossack Fonseca, a Panamanian law firm that sells anonymous offshore companies around the world. These shell companies enable their owners to cover up their business dealings, no matter how shady.

In the months that followed, the number of documents continued to grow far beyond the original leak. Ultimately, SZ acquired about 2.6 terabytes of data, making the leak the biggest that journalists had ever worked with. The source wanted neither financial compensation nor anything else in return, apart from a few security measures.

Nowhere I’ve seen explains where this source got the documents.

For almost three years, we have openly debated what I consider a fair question: what was Edward Snowden’s motivation for stealing the NSA’s crown jewels and was any foreign country involved? People have also asked questions about how he accessed so much: Did he steal colleagues’ passwords? Did he join Booz Allen solely to be able to steal documents? I think the evidence supports an understanding that his motives were good and his current domicile an unfortunate outcome. And we know some details about how he managed to get what he did — but the key detail is that he was a Sysadmin in a location where insider detection systems were not yet implemented and credentials to have unaudited access to many of the documents he obtained. Those details are a key part of understanding some of the story behind his leaks (and how NSA and GCHQ are organized).

Somehow, journalists aren’t asking such questions when it comes to this leak, the Unaoil leak that broke last week, or the leak of files on British Virgin Isles have activity a few years back (which, like this project, ICIJ also had a central role in). I’m sympathetic to the argument that IDing who stole these documents would put her or him in terrible danger (depending on who it is). But I also think this level of description the Intercept gave — in the first paragraph of a story about stolen recordings of jailhouse phone calls that revealed improper retention of attorney client conversations — would be useful.

The materials — leaked via SecureDrop by an anonymous hacker who believes that Securus is violating the constitutional rights of inmates — comprise over 70 million records of phone calls, placed by prisoners to at least 37 states, in addition to links to downloadable recordings of the calls. [my emphasis]

The Intercept’s source, knowing of the problem, hacked recordings from an inadequately protected server.

As the Guardian’s own graphic makes clear, this leak dwarfs the leaks by Chelsea Manning and Hervé Falciani (the security engineer behind the HSBC leak). It probably dwarfs the Snowden leak (though oddly the Guardian, which had fingers in both, doesn’t include Snowden in its graphic). That ought to raise real questions about how someone could access so much more information than tech experts with key credentials working at the core of security in the targeted organizations could. And those questions are worth asking because if these files come from an external hacker — a definite possibility — than it ought to raise questions about how they were able to get so much undetected and even — as everyone felt appropriate to ask with Snowden — whether an intelligence agency was involved.

Where are the corrupt Americans?

As with the BVI leak before it, thus far this leak has included no details on any Americans. Some have suggested that’s because the Panama trade deal already brought transparency on US persons’ activities through the haven of Panama, except these files go back four decades and. Americans not only used Panama as a haven before that, but the CIA used it as a key laundering vehicle for decades, as Manuel Noriega would be all too happy to explain if western countries would let him out of prison long enough to do so.  Moreover, the files are in no way restricted to Panama (indeed, some of the stories already released describe the establishment of shell companies within the US).

Screen Shot 2016-04-04 at 10.17.39 AMNot only haven’t we heard about any Americans, but even for the close American friends identified so far — starting with Saudi Crown Prince and close CIA buddy Mohammed bin Nayef — the details provided to date are scanty, simply the name of the shell he was using.

Craig Murray has already been asking similar questions.

Russian wealth is only a tiny minority of the money hidden away with the aid of Mossack Fonseca. In fact, it soon becomes obvious that the selective reporting is going to stink.

The Suddeutsche Zeitung, which received the leak, gives a detailed explanation of the methodology the corporate media used to search the files. The main search they have done is for names associated with breaking UN sanctions regimes. The Guardian reports this too and helpfully lists those countries as Zimbabwe, North Korea, Russia and Syria. The filtering of this Mossack Fonseca information by the corporate media follows a direct western governmental agenda. There is no mention at all of use of Mossack Fonseca by massive western corporations or western billionaires – the main customers. And the Guardian is quick to reassure that “much of the leaked material will remain private.”

What do you expect? The leak is being managed by the grandly but laughably named “International Consortium of Investigative Journalists”, which is funded and organised entirely by the USA’s Center for Public Integrity. Their funders include

Ford Foundation
Carnegie Endowment
Rockefeller Family Fund
W K Kellogg Foundation
Open Society Foundation (Soros)

among many others. Do not expect a genuine expose of western capitalism. The dirty secrets of western corporations will remain unpublished.

Expect hits at Russia, Iran and Syria and some tiny “balancing” western country like Iceland. A superannuated UK peer or two will be sacrificed – someone already with dementia.

Now, in response to people like me and Murray and Moon of Alabama asking those questions, the SZ editor in charge of their side of the project promises dirt on Americans will be coming. Let’s hope so, because this is a worthwhile leak of data, and it would be unfortunate for Americans and Brits to be deprived of learning more about the corruption among their elite.

Does this project follow up on Ken Silverstein’s earlier reporting?

Back in December 2014, Ken Silverstein did a fairly thorough review of MF at Vice (though he worked at the Intercept at the time).

[A] yearlong investigation reveals that Mossack Fonseca—which theEconomist has described as a remarkably “tight-lipped” industry leader in offshore finance—has served as the registered agent for front companies tied to an array of notorious gangsters and thieves that, in addition to Makhlouf, includes associates of Muammar Gaddafi and Robert Mugabe, as well as an Israeli billionaire who has plundered one of Africa’s poorest countries, and a business oligarch named Lázaro Báez, who, according to US court records and reports by a federal prosecutor in Argentina, allegedly laundered tens of millions of dollars through a network of shell firms, some which Mossack Fonseca had helped register in Las Vegas.

Documents and interviews I’ve conducted also show that Mossack Fonseca is happy to help clients set up so-called shelf companies—which are the vintage wines of the money-laundering business, hated by law enforcement and beloved by crooks because they are “aged” for years before being sold, so that they appear to be established corporations with solid track records—including in Las Vegas. One international asset manager who talked to Mossack Fonseca about doing business with them told me that the firm offered to sell a 50-year-old shelf company for $100,000.

If shell companies are getaway cars for bank robbers, then Mossack Fonseca may be the world’s shadiest car dealership.

Silverstein clearly had some documents, though there’s no indication he had the trove that started getting leaked to SZ and ICIJ in early 2015, just weeks after Silverstein’s story.

On Twitter, Silverstein suggested his story never got published because this was the period when the Intercept wasn’t publishing (I had something similar happen to me while there).

But given the close continuity between Silverstein’s story and SZ receipt of the first documents, are they part of the same effort?

Why do they call it the Panama Papers?

These aren’t papers showing the corruption that flows through Panama (for that matter, neither did the BVI leaks show all the corruption that flows through BVI, and there’s a significant BVI aspect to this leak). Rather, they show the corruption flowing through a Panamian-based but global firm, Mossack Fonseca. Reporting on this tells us MF is only the fourth largest of these laundering specialists.

So, aside from the fact that few people have heard of MF, why are we calling this the Panama Papers and not “Here’s what the fourth largest of these companies is involved with”?

All of which is to say as huge as this leak is — which is good! — it’s still just a tiny fraction of what’s out there.

Let the resignations begin

None of this is meant to undermine the importance of this leak or the reporting the team of journalists covering it. Indeed, the story already threatens to take down the Prime Minister of Iceland whose conflict of interest the files revealed. We should have more of these leaks, covering all the havens and shell-creators.

Just remember, as you’re watching the coverage, that we’re getting selective coverage of one particular corner of that industry (ICIJ has said something about releasing files in several months). By all means let’s go after the crooks this story exposes, but let’s remember the crooks who, for whatever reason, aren’t included in this one.

Update: Fusion, which is part of the data sharing, admits there are only 211 Americans identified in the stash, though thus far this is just from recent years (that is, the years that might be affected by the trade agreement).

International Consortium of Investigative Journalists (ICIJ) has only been able to identify 211 people with U.S. addresses who own companies in the data (not all of whom we’ve been able to investigate yet). We don’t know if those 211 people are necessarily U.S. citizens.

All that said, the very good experts (including Jack Blum, who’s as good on these issues as anyone) don’t have very compelling explanations why there aren’t Americans in the stash.

Update: McClatchy describes some of the 200-some Americans whose passports show up in the files. All the ones it describes have been prosecuted (though several got light punishments).

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

Monday Morning: Welcome to BVI – Have a Tax-Free Day

Aw, shucks. Spring Break is over just as I find another warm place to visit. The British Virgin Islands expect a balmy daytime high of 84F/29C degrees today with partly cloudy skies.

And a 100% chance of tax havens galore.

Blood’s in the water, though, stay ashore. You may hear a lot in the media today about the Panama Papers leak dump in which the BVI feature prominently. What you won’t hear much about: this is the second leak about tax havens in exactly three years.

Jack-doodly-squat happened after the first one in April 2013.

The UK’s PM David Cameron was pressed in 2013 to do something about BVI’s tax laws. He said he would work with the G8 to tackle tax evasion. Of course, we now know why he sat on his hands; he had highly-rewarding and substantial familial interest in doing nothing but continue his family’s tax avoidance scheme. And yet he still managed to get reelected last year, the corrupt pig fucker.

If governments had felt any pressure at all to do something corrective, there wouldn’t be a second wave of leaks, right? But the 1% have continued to milk profits from businesses, transfer the money offshore, and buy themselves enough politicians and corporate media to ensure things remained nice and cozy.

Color me skeptical that anything will come of investigations into tax shelters which are for the most part legal, thanks to pwned and compromised governance. But the unfolding story sheds new light on older ones.

Like the decade-plus work on tax havens and abusive tax schemes by the U.S. of Permanent Senate Committee on Investigations, which did not slow or stop the offshoring of capital. B-schools continue to teach offshore tax shelters as ‘A Good Thing’, right alongside ‘Taxes Are Bad’ — because the 1% have amassed enough money to make sure legislators and B-schools’ leadership stay bought.

How much do the Panama Papers leak materials overlap with the Swiss Leaks scandal, including India’s investigation into HSBC, money laundering and influence peddling, reaching into the UK and beyond?

Or a more recent story about hacked elections, including Argentina’s. Has laundered money acquired the services necessary to manipulate elections in order to ensure nothing would change in tax laws?

Perhaps the Panama Papers will offer a more cohesive picture of just how badly the 99% are being screwed, if nothing else.

Nothing else, that is, besides the No Confidence vote Iceland’s Prime Minister Sigmundur David Gunnlaugsson now faces after the Panama Papers revealed his financial interests in BVI.

It’s actually rather quiet on the technology front as I write this. I’ll add a few snippets later after caffeination.

Blogger since 2002, political activist since 2003, geek since birth. Opinions informed by mixed-race, multi-ethnic, cis-female condition, further shaped by kind friends of all persuasions. Sci-tech frenemy, wannabe artist, decent cook, determined author, successful troublemaker. Mother of invention and two excessively smart-assed young adult kids. Attended School of Hard Knocks; Rather Unfortunate Smallish Private Business School in Midwest; Affordable Mid-State Community College w/evening classes. Self-employed at Tiny Consulting Business; previously at Large-ish Chemical Company with HQ in Midwest in multiple marginalizing corporate drone roles, and at Rather Big IT Service Provider as a project manager, preceded by a motley assortment of gigs before the gig economy was a thing. Blogging experience includes a personal blog at the original blogs.salon.com, managing editor for a state-based news site, and a stint at Firedoglake before landing here at emptywheel as technology’s less-virginal-but-still-accursed Cassandra.

Weekend Open Thread: You’re Gonna’ Need a Bigger Boat

We’ve been rather busy around the emptywheel this weekend, but it looks like we need something for conversations about two big topics.

First, the Panama Papers — here’s a short and sweet explainer at The Guardian to get you started. It’s the biggest leak-based, multi-outlet, global journalistic investigation to date. The server where the papers are located is already ready flooded with traffic (or attempts at DDoSing).

You might be interested in watching the story’s impact on world media. Go to Newsmap (turn off technology, sports, entertainment, and health news in the very bottom toolbar if necessary). Then notice how often “Panama Papers” is mentioned. Australia and some of the earliest EU outlets have picked up this story. Watch for the story to roll westward.

Second, the Associated Press announced this weekend its style would henceforth use ‘internet’ (lowercase i) versus Internet (uppercase I) in all cases. Which is all groovy for journalists who write using AP style, but a misrepresentation of the existence of the Internet versus the internet, because the Internet is still very much a thing. In my opinion, this looks more like word guys not understanding the technology they rely on once again. Hello, future shock?

Have at it below. I’ll catch you tomorrow morning as usual.

Blogger since 2002, political activist since 2003, geek since birth. Opinions informed by mixed-race, multi-ethnic, cis-female condition, further shaped by kind friends of all persuasions. Sci-tech frenemy, wannabe artist, decent cook, determined author, successful troublemaker. Mother of invention and two excessively smart-assed young adult kids. Attended School of Hard Knocks; Rather Unfortunate Smallish Private Business School in Midwest; Affordable Mid-State Community College w/evening classes. Self-employed at Tiny Consulting Business; previously at Large-ish Chemical Company with HQ in Midwest in multiple marginalizing corporate drone roles, and at Rather Big IT Service Provider as a project manager, preceded by a motley assortment of gigs before the gig economy was a thing. Blogging experience includes a personal blog at the original blogs.salon.com, managing editor for a state-based news site, and a stint at Firedoglake before landing here at emptywheel as technology’s less-virginal-but-still-accursed Cassandra.