How Do You Expose An Anonymous Company?

Jan 23, 2015
Originally published on March 2, 2016 9:36 am

Part 3 of the TED Radio Hour episode Keeping Secrets

About Charmian Gooch's TED Talk

Charmian Gooch's mission is to "out" corrupt companies. She details how global corruption trackers follow the money — to some surprisingly familiar places.

About Charmian Gooch

Charmian Gooch is co-founder of the watchdog NGO Global Witness, which was founded to address growing concerns about covert warfare funded by illicit trade in timber and other industries. Global Witness has shed light on trade in "blood diamonds" in Uganda, minerals in the Congo and illegal timber trade between Cambodia and Thailand. In 2014, Gooch was awarded the TED Prize. Her Prize wish: to learn who owns and controls companies, to change the law and to launch a new era of openness in business.

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So up to this point, we've been hearing about personal secrets, right? Secrets that we keep to protect ourselves or even the people we love. But what about secrets that can actually affect the lives of millions of people? Secrets that are worth billions of dollars? This story begins about 25 years ago. Charmian Gooch was a young activist and she and some friends wanted to stop human rights abuses in Cambodia. They suspected that the brutal Khmer Rouge regime in that country was funding itself by trading in illegal timber. So Charmian and the activists went to Cambodia with their own secret. They pretended they were timber buyers.

Did anybody ever suspect that you were not timber buyers?

CHARMIAN GOOCH: Yes. Yes, a couple of times. A few times we had to sort of make a run for it back to the car and get out of there. We had a sort of little few codes for if things weren't going well. But generally, it worked. We used secret cameras - pinhole cameras - gathering evidence and put that evidence out to the world and challenged authority.

RAZ: Charmian and the other activists exposed and then helped to shut down that whole operation. And eventually, they formed a group. They're now called Global Witness. And that was the beginning of a mission to expose the secrets of corruption.

Tell me about what you did in Angola in 1997. You went there as a tourist or a buyer, or - what was your - how did you...

GOOCH: Nope. I had a different cover story, which, to this day I don't think the Angolan government ever worked out what my story was.

RAZ: What did you do? When you flew down there you just said you'd be there as a tourist, or...

GOOCH: Well, I'm obviously not answering the question. (Laughter).

RAZ: I see, right. Got it.


ATO ESSANDOH: (As Commander Rambo) Give it to me.

RAZ: OK, remember, Charmian was there to expose a dark secret.


ESSANDOH: (As Commander Rambo) You are here to help us in our struggle against the government.

LEONDARDO DICAPRIO: (As Danny Archer) I'm here to do business with Commander Zero, all right?

RAZ: You might remember the movie "Blood Diamond." Leonardo DiCaprio plays a character who buys diamonds from violent rebel groups in Africa. Well, Charmian's secret operation helped expose the illegal diamond trade.

GOOCH: I was just trying to understand how it was that diamonds were involved in funding a very long-running civil war in Angola.


UNIDENTIFIED ACTOR: (As G8 Summit executive) According to a devastating report by Global Witness, these stones are being used to purchase arms and finance civil war.

RAZ: And Global Witness has been doing this kind of stuff for 20 years now.

GOOCH: And we look at that nexus where environmental destruction, corruption, conflict and natural resources all collide together.

RAZ: Charmian Gooch and her team fight to expose all kinds of corporate secrets for one very simple reason.

GOOCH: If you're in a country that more than 70 percent of the population are below the poverty line, they're trying to get by on a couple of dollars a day, and then you find out somewhere down the line that your president or the cronies around him have made some massive minerals deal in oil, gas or some other minerals deal, how does that make you feel? It's not an OK way, it's not a fair way to do business. And that has to be challenged and is being challenged.

RAZ: In her TED Talk, Charmian Gooch focused on a particular kind of secret, one that she thinks is especially problematic.


GOOCH: I've come here today to talk to you about a problem. It's a very simple yet devastating problem, one that spans the globe and is affecting all of us. The problem is anonymous companies. It sounds like a really dry and technical thing, doesn't it? But anonymous companies are making it difficult and sometimes impossible to find out the actual human beings responsible sometimes for really terrible crimes. So many of the countries rich in natural resources like oil or diamonds are home to some of the poorest and most dispossessed people on the planet. And much of this injustice is made possible by currently accepted business practices. And one of these is anonymous companies. Now, we've come up against anonymous companies in lots of our investigations, like in the Democratic Republic of Congo, where we exposed how secretive deals involving anonymous companies had deprived the citizens of one of the poorest countries on the planet of well over a billion dollars. That's twice the country's health and education budget combined. Or in Liberia, where an international predatory logging company used front companies as an attempt at to grab a really huge chunk of Liberia's unique forests. Or political corruption in Sarawak, Malaysia, which has led to the destruction of much of its forests. Well, that uses anonymous companies, too.

We secretly filmed some of the family of the former chief minister and a lawyer as they told our undercover investigator exactly how these devious deals are done using such companies. And the awful thing is, there are so many other examples out there from all walks of life.

RAZ: Can you describe a company that we would've heard of, that we know of, and that there might be evidence that even that company at the highest levels knew what was going on?

GOOCH: I could talk about this interesting deal, where Shell and the Italian oil company E-N-I, or Eni, paid just over a billion dollars for the rights to an oil block in Nigeria. They paid those billion dollars - 1.1 billion - to the Nigerian government. And then the Nigerian government transferred exactly the same amount into a front company.

RAZ: Owned by a government official?

GOOCH: It appears to be the case, a Nigerian oil minister. That money was then - went off into a whole lot more Shell companies. And that's where it becomes very hard to know who actually really, really and ultimately benefited. So we - Global Witness and others - found all sorts of emails from senior people within both of those big oil companies talking about meetings and money, and it was very, very hard if not simply incredible to believe that big, complex, sophisticated, multinational oil companies didn't understand who they were really doing business with.

RAZ: That's Charmian Gooch, head of Global Witness. In just a moment Charmian explains just how easy it is to set up a secret company. Our show today, "Keeping Secrets," and if you're listening on the radio, you can always hear the show whenever and wherever you are by subscribing to our podcast. It's easy. Just tap on the podcast app on your smartphone and look for TED Radio Hour and of course, hit subscribe. I'm Guy Raz and this is the TED Radio Hour from NPR.


RAZ: It's the TED Radio Hour from NPR. I'm Guy Raz, and on the show today, ideas about secrets. So before the break, we were hearing from Charmian Gooch who fights corruption around the world. And she says that secret companies are to blame for a lot of that corruption. They're called shell companies, where the ownership is kept virtually anonymous.

GOOCH: I think that for a long time people thought of corruption as, you know, an envelope full of money being paid to a corrupt African official.

RAZ: Yeah.

GOOCH: But really what corruption is about is this network of globalized business and facilitators that enable hundreds of millions, sometimes, of dollars - if not a billion or more - to be moved around the world and made safe. And it's been totally legal to do that.

So you and I can set a company up. We can pay somebody else to be the nominee director to use their names - again, totally legal. We can then create another company, and that's the parent company of that one with the nominee directors and so on and so forth until you have a huge web. And trying to unpick where the actual ownership is can be impossible.

RAZ: See, here's what I don't get. In, like, this globalized age where we're so interconnected and we can know what's going on in Tahrir Square, you know, 5,000 miles away in an instant and we can see images from around the world at any time, it would seem like it would be a lot harder to keep secrets now than ever before in history. But you're saying that - to the contrary?

GOOCH: I know what you mean. And sometimes I find it remarkable that these big deals don't get out. And I think maybe more of the deals are coming out and I think, inevitably, over time that is going to change. But this is a complex, sophisticated system of corporate structures and banks that are not being held to account and a way of doing business. That takes some challenging.


GOOCH: A recent study by the World Bank looked at 200 cases of corruption. It found that over 70 percent of those cases had used anonymous shell companies, totaling almost $56 billion. Now, many of these companies were in America and the United Kingdom, its overseas territories and crown dependencies. And so it's not it's just an offshore problem, it's an onshore one, too. You see, shell companies, they're essential to the secret deals which may benefit wealthy elites rather than ordinary citizens. There are those who believe that corruption is unavoidable. It's just how some business is done. It's too complex and difficult to change. So in effect, well, we just accept it.

But as a campaigner and investigator, I have a different view because I've seen what can happen when an idea gains momentum. In the oil and mining sector, for example, there is now the beginning of a truly worldwide transparency standard that could tackle some of these problems. In 1999, when Global Witness called for oil companies to make payments on deals transparent, well, some people laughed at the extreme naivety of that small idea. But, literally, hundreds of civil society groups from around the world came together to fight for transparency, and now it's fast becoming the norm and the law. Two-thirds of the value of the world's oil and mining companies are now covered by transparency laws - two-thirds. So this is change happening, this is progress.

But we're not there yet by far because it really isn't about corruption somewhere over there, is it? In a globalized world, corruption is a truly globalized business, and one that needs global solutions supported and pushed by us all as global citizens right here. Thank you.


RAZ: Charmian Gooch won the million-dollar TED Prize in 2014. She is using the money to make corporations less secretive. You can see both of her talks at Transcript provided by NPR, Copyright NPR.