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‘Following the money’ and tax abuse by multinationals were on the agenda at the world’s biggest gathering of investigative journalists in Lillehammer, Norway. But many were discussing how to pay for such reporting
"What you have to realise," said David Cay Johnston, holding a bank note in the air, "is that this is just like taking some money out of one pocket, and putting it into your other pocket."
Johnston was speaking at the 2015 Global Investigative Journalism Conference in Lillehammer, Norway, which brought together 950 people from 121 countries. He is an expert on how multinational companies avoid tax, having written books such as "Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else".
By moving a bank note from one pocket to the other, he was explaining the accounting practices that multinationals employ to reduce their tax bill - moving money between different subsidiaries of the same corporation to ensure profits are reported where the tax rate is low. But what interested me was that this was the second time in as many days that I had seen this illustration used.
The first was by Simon Bowers, Senior Financial Reporter at the Guardian, who spoke at the conference the day before. Bowers was talking about the #LuxLeaks affair, in which the International Consortium of Investigative Journalists, and others, reported on a trove of documents that had been leaked from the Luxembourg office of PricewaterhouseCoopers.
The documents showed the many and varied schemes that multinationals were using to reduce their tax liability. Bowers did the same thing: took some money out of one pocket and placed it in the other. "There is no other reason you would do this," he said, "except for tax purposes."
I was intrigued to see how often issues of tax came up at the conference, with discussions on offshore banking, digging up corporate data, and how tax is avoided in the extractives sector, to name a few. The Thomson Reuters Foundation made its own contribution, running a session titled "Finding Africa's Missing Money", which drew on our ongoing Wealth of Nations programme funded by Norad. (You can see a summary of the session here.)
Four journalists involved in our programme discussed their investigations into tax affairs, such as Musikilu Mojeed, managing editor of Nigerian investigative outlet Premium Times. He explained how his team investigated the so-called "Abacha Loot" - the billions of dollars that were stashed in Swiss bank accounts by the late Nigerian dictator Sani Abacha. They found the Abacha family had been granted immunity from prosecution if they agreed to return only part of the money; one non-governmental organisation labelled this a "tragic triumph of impunity."
How to trace money was one hot topic, but another was how to make it - as a news organisation. This is a challenge faced by media outlets in the developed and developing world alike, especially when resource-heavy investigative journalism is concerned. The conference programme reflected an increased interest in this with sessions on business models, crowd funding and fundraising.
What emerged? Encouragingly, the sheer number of ways in which media organisations are raising revenue while remaining independent is bewildering. For example we heard from the Korea Centre for Investigative Journalism, which has over 35,000 people giving monthly donations to keep it running, and from the German investigative non-profit CORRECT!V, which publishes books and even graphic novels as one way of raising revenue.
Also speaking was Teun Gautier, a publisher from the Netherlands who has started a number of journalistic initiatives. He presented his recent paper on this topic, which lists 52 ways to make money from quality journalism. The list features some unusual ideas - one is "consultative journalism", in which a journalist would act like a management consultant to help an organisation function better, but would employ journalism techniques and great storytelling to make it a more engaging process.
Meanwhile other ideas were more familiar, and some might make journalists shift uncomfortably in their seats (see "branded content", also known as native advertising). In Gautier's view, news outlets could need 10 or more of these "revenue streams" running simultaneously if they are to be sustainable.
Whatever the case, this is a challenge no one can ignore any longer. Reporting on complex issues such as tax abuse requires significant time and resources, and there's no doubt there are many cases of tax avoidance that are yet to be uncovered. You could say that while multinationals are busy moving money from one pocket to the other, independent media outlets need to work out how to put money in both pockets - and fast.
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