In the wake of the Panama Papers leak, Ryle Dwyer looks at the Irish connection in the form of Gerard Ryle, the Kerry-born journalist with the drive to expose scandal worldwide
THE leaking of the files of Mossack Fonseca, the Panama-based law firm that specialises in creating offshore companies, became a global sensation.
Those files revealed details of the offshore holding of 140 politicians and public officials worldwide.
Associates of Russian President Vladimir Putin secretly passed as much as $2bn through banks and shadow companies. The families of other prominent officials were also exposed, including Prime Ministers David Cameron of Britain, Nawaz Sharif of Pakistan, and Iceland’s Sigmundur Gunnlaugsson, who stepped down amid the fall-out last week. This story is liable to run for some time because of its wide-ranging implications.
Economists estimate that funds invested offshore cost governments around $200 billion annually, with the US losing some $35bn and Europe $78bn.
Of course, all the people investing in offshore enterprises are not acting illegally, but many people have been using offshore facilities to evade tax.
The 11 million documents leaked from Mossack Fonseca’s reveal the company’s clients included individuals and companies blacklisted by the US because of links to drug trafficking and terrorism. The International Consortium of Investigative Journalists (ICIJ) broke the story.
The ICIJ was set up in 1997 by the Centre for Public Integrity, a journalistic initiative to deal with cross-border corruption by exposing those responsible who are in positions of power and influence.
It has a strong Irish connection, in that it now headed by an Irish journalist, Gerard Ryle, who was appointed Director of the ICIJ in 2011 after he got hold of 2.5 million secret files in relation to the tax havens in the Virgin Islands. He then broke a similar story based on those files.
Mr Ryle had been no stranger to international headlines since he emigrated to Australia from his home near Tralee, County Kerry, in 1988. He had trained as a journalist with the Irish Press and was quickly in the headlines with award-winning stories about the seizure of Aboriginal children.
Between 1917 and 1970, some 100,000 Aborigine children were taken away from their parents in a supposed attempt to assimilate them into Anglo-Australian society. The story read like a precursor of Nazi experiments, but it continued afterwards. Over 20,000 of those children were “taken into care” between 1951 and 1968.
Their parents were discouraged from trying to contact the children, who were often told that their parents were dead. Whole aboriginal families and communities were destroyed in this depraved social experiment.
Seizing the children was bad enough, but Mr Ryle and a colleague in The Age, the Melbourne newspaper, broke the story that church and state authorities running the orphanages with those children actually allowed drug companies to use some of them as human guinea pigs as late as 1970. For instance, 51 babies between 7 and 10 months-old were used in a search for a vaccine against the cold sore, Herpes Simplex.
All of those children vaccinated in one experiment caught herpes. In another experiment 69 infants in a Melbourne orphanage were injected in an attempt to find a whopping-cough vaccine.
Under the glare of these reports, Prime Minister John Howard issued an apology of sorts, but it was so begrudging that it only fueled further controversy. It was not the last time that Mr Ryle’s journalism was to land Howard in the proverbial soup.
The reporter caused of a further sensation during the 1990s with his accounts of police corruption in the state of Victoria. A Special Operations Group was formed in 1977 with state crime squads to investigate drug trafficking, major frauds, and other criminal activities. These led to a wave of noble cause corruption in which officers believed that good outcomes justified bad behaviour. Police engaged in a “code of silence” to protect the misconduct of each other.
Before long, however, many were involved in corruption for their own gain. The Age newspaper accused hundreds of police officers of taking kickbacks from window shutter companies.
When police were called to a business premises where a window or a door had been broken, they would call a shutter service to complete a temporary repair, if the owner was not on hand. Temporary repairs would be made at the expense of the owner, who would usually rely on the same company to complete the permanent repairs.
This practice began in 1978, and the shutter companies began paying kickbacks to police for calling on them. The police were paid about $300 for a plate glass window and $150 for a glass door. There were strong suspicions in some instances, that it was the police who did the damage in the first place.
In 1996 the media director of the police publicly accused Mr Ryle of being “anti-police” and announced that the force would not facilitate his inquiries.
“We don’t have any confidence in what we tell you being reported in a fashion that is anything other than anti-police, so I am really not prepared to assist you,” he openly told the reporter.
The Age newspaper backed its reporters, and the police initiated a high level inquiry, which ultimately vindicated the newspaper and its star reporter.
One police officer was caught on videotape accepting payment in a sting operation. The records of a shutter company seized during the investigation found that the company had paid $144,000 to the police from April 1994 to May 1995.
The inquiry uncovered 1,819 kickbacks, involving policemen at 56 of the 89 police stations investigated. Ultimately 550 police were charged and over 100 resigned from the force while under investigation.
After ten years reporting for The Age, Gerard Ryle moved to the Sydney Morning Herald, where he went on to break the biggest financial scandal in Australian history. This involved Tim Johnston, who managed to deceive the governments of Australia, Britain, Russia, and other countries with his bogus Firepower Pill, which was a fuel additive that supposedly increased fuel efficiency and cut emissions.
On January 7, 2007, the Sydney Morning Herald published its first expose on the scam, and four defamation suits were promptly filed against the newspaper, which went on to publish over 60 further articles under Gerard Ryle as news editor. After two years, Johnston’s lawyers dropped the defamation cases, and turned on Johnston instead for failing to pay them.
Mr Ryle published a best-selling book on the scandal in May 2009. Firepower: The Most Spectacular Fraud in Australian History, detailed the massive scam that deceived a wide range of people — including Prime Ministers John Howard of Australia, Tony Blair of Britain, and President Pervez Musharraf of Pakistan.
In their wake were business leaders, diplomats, doctors and sporting heroes who were essentially tricked into investing money in the super pill, which was just a placebo with no beneficial effects.
Millions of shares in Firepower were sold, and the company increased its profile by becoming the biggest sporting sponsor in Australia. The company took over the Sydney Kings basketball team, the Perth rugby union team Western Force, and the South Sydney Rabbitsohs rugby league team. It was estimated that ordinary Australian investors were unwitting divested of $100 million in the scam.
Mr Ryle won four Walkley Awards, the top Australian Award for journalism before he was enticed to Washington to head ICIJ project.
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