Luxleaks: a very modern scoop

The publication on Wednesday of details from 28,000 pages of leaked files from PricewaterhouseCoopers, by media organisations in 26 countries, about the tax affairs of some of the largest multinationals on the globe is an example of the way technology is changing journalism.

The investigation has exposed the complex tax arrangements of many companies and individuals, including the Irish food group Glanbia and members of the Sisk family, which owns the construction and healthcare group of the same name. Their methods, which are perfectly legal, save large sums in tax.

The "Luxleaks" story began in 2011, when Edouard Perrin, then a staff reporter at France 2, the state-owned TV channel, investigated tax avoidance. He ended up with files relating to tax agreements that PwC had negotiated with the tax authorities in Luxembourg.

After Perrin produced two programmes, broadcast in 2012, that focused on French companies, he still had a huge amount of material about companies and transactions around the globe, most of it surplus to his immediate requirements.

We don’t know who leaked the PwC documents to Perrin. The leak is the subject of an inquiry in Luxembourg. PwC, in a statement this week, described the documents as stolen. It appears likely that the documents, given their volume, were leaked using modern technology, such as USB sticks. In that sense it is a very modern journalistic story, one that might never have come about if a person had had to carry several heavy boxes out of an office.

The next step came when the International Consortium of Investigative Journalists, in Washington DC, contacted Perrin, having managed to get hold of the same documents. The Consortium is a new type of media organisation. Funded by philanthropy, it is one of a number of groups responding to the internet’s undermining of the business model of traditional newspapers.

“

Losing our eyes and ears” “The news media, hobbled by short attention spans and lack of resources, are even less of a match for those who would harm the public interest,” the Consortium

says. “Broadcast networks and major newspapers have closed foreign bureaus, cut travel budgets and disbanded investigative teams. We are losing our eyes and ears around the world precisely when we need them most.”

The International Consortium of Investigative Journalists is funded by donations from groups such as the Ford Foundation and the David and Lucile Packard Foundation; it is a project of the Centre for Public Integrity, an institution founded by Charles Lewis, a former producer with ABC News and the CBS News programme 60 Minutes.

The centre works on issues that do not stop at national frontiers, such as cross-border crime, corruption and the accountability of power. Using computer-assisted reporting specialists, public-records experts, fact-checkers and lawyers, it provides resources and state-of-the-art techniques to media organisations around the world.

In June of this year 40 journalists working for media groups from Japan to the US gathered in an office at the Belgian newsppaper Le Soir, in Brussels, where Perrin and staff from the Consortium briefed them on the PwC documents. Among the journalists were this reporter and the business editor of The Irish Times, John McManus.

It was an unusual meeting in that it involved news organisations that normally try to scoop one other coming together to pool resources on a single story.

Because TV crews were involved, and because the documentation was extensive and complicated, a common publication date, five months away, was agreed.

In the meantime the Consortium had set up a secure website for reporters working on the project, who could use keywords to find documents relevant to their countries – in our case "Ireland", "Irish", "Dublin", "Irlande" and "Irlandais".

The consortium also created a secure forum so reporters could update each other on their work, and upload new documents and any video and audio material they had gathered. It has been where the Washington-based group and the reporters working on Luxleaks for the Guardian, Le Soir, Le Monde, Süddeutsche Zeitung, Asahi Shimbun, the Danish Broadcasting Corporation and CBC Canada, among others, have been communicating with each other this week.

The Australian Financial Review shared some of the PwC data with the Australian tax commissioner, Chris Jordan. In his response Jordan said he had already written to Australia's tax-treaty partners to raise the topic of the data and any "tax risks" it might reveal. Ireland is one of those partners. The Australian Financial Review told its Luxleaks partners before publication about Jordan's response.

Since 9pm on Wednesday, when the story broke, the reporters involved in the project have been emailing and tweeting (#luxleaks) about how their reports have been playing out in their countries. By 10.45pm the #luxleaks Twitter tag was trending so well that the Islamic State propaganda machine started to piggyback on it, attaching a link to an Isis video to the #luxleaks tag.

This reporter appeared on Morning Ireland, on RTÉ Radio 1, on Thursday to discuss the leaks and Luxembourg's role in global tax avoidance, and the story generally was covered by both public and private television and radio stations here.

Stories organised through organisations such as the International Consortium of Investigative Journalists get a global boost that is unusually powerful for a topic such as tax planning. No doubt the powers that be in Luxembourg, and the new president of the European Commission, Jean-Claude Juncker (a former long-serving prime minister of Luxembourg), had mixed feelings about that fact on Thursday morning.

Likewise, no doubt, the companies whose tax plans were revealed, and whose PwC files are now freely available on the Internet (icij.org). The structures detailed in the Luxleaks files – groups of companies swapping huge amounts of money in complex financial manoeuvres – are themselves products of the internet age.

From the point of view of a multinational tax planner, “location” now has more to do with tax rates and the interfaces between national tax practices than with geography or distance. But if this is a product of modern technology, so is the phenomenon of global scoops based on databanks that journalists could once only have dreamed of.

Newspapers and other traditional media are under financial pressure from the internet. But as Gerard Ryle, the Irish-born head of the Consortium, said in Dublin last month at the Cleraun media conference, technology may also mean that investigative journalism is entering its golden age.