Organized Crime & Corruption

Exposes global criminal enterprises uncovered by OCCRP

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drew sullivan is a social entrepreneur and co-founder of the organized crime and corruption reporting project in short drew oversees an elite team of investigative journalists who aim to expose crime and corruption so the public can hold power to account so far his organization's work has contributed to more than seven billion dollars worth of fines and monies seized and returned to the public sphere rightful owners looting laundering theft drew's team has covered it all and more remember the panama papers occrp broke that story and won a pulitzer prize for it please welcome drew sullivan hello i want to uh thank randy and all the great folks at imagine solutions for the opportunity to speak to you all today my name is drew sullivan i'm the editor and publisher co-founder of the organized crime and corruption reporting project

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and we're going to start off today with a video that was made for us by the skull foundation which gives you a little background on occrp we won their social entrepreneurship award last year so why don't you take a look at this and then i'll be back my problem is not the fake news actually my problem is that there's not enough real truthful news out there the european commission says the level of corruption is breathtaking when you look at criminals that operate across borders you see this global kleptocracy that amasses huge amounts of wealth that's not distributed to anyone else corruption and crime account for probably 20 of the global economy it's really one of the most destructive thing on earth we're trying to tell this story to the world people have power they can change these systems a fair trade watchdog reports that

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two-thirds of the 177 countries it surveys are below average in the corruption stakes we're looking at organized crime and especially cross-border organized crime there are criminal groups that operate at ease across frontiers across continents crimes ranging from drug trafficking to trafficking in women and children and forced labor and they laundered money you destroy the lives of millions and millions of people by not allowing businesses and economies and environments to to develop their enemy should be law enforcement agencies but these law enforcement agencies can't really leave the office they can't go across borders to investigate a crime and you don't have any global structure to investigate organized crime so what's left then is the investigative reporters who can go across borders and can investigate these guys in multiple countries at the same time because we work in networks occrp is a coalition of 45 investigative

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centers stretched around the globe the story i would like to highlight today is about a finance minister that are really dedicated to tell the people what's happening so that they have the information to make change you don't want to only look at assets of him and his family you want to look at assets that they've got hidden our job is really about following the money we follow organized crime across the borders we follow the companies we follow the banks villains dictators authoritarian regimes bad companies come and go but the core figures in the system the banks that facilitate the movement of funds the accounting firms the trust firms this is the the core of how corruption works do you have 2014 as well can i take a look just to see what happens these expenses sound completely fake and made up so it's not real when you investigate organized crime and corruption what you realize is that the criminals employ the same method to steal public money you see a lot of

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patterns so that's when we started this initiative called the investigative dashboard where we collected as much data as possible if you've got a good system where you've captured large amounts of data we can build out the topography of their network and identify assets that are hidden that we suspect are owned by them if you look in the case of azerbaijan we've continued to publish stories that have really defined the regime as a corrupt dictatorship that is stealing large amounts of money from the people danish lender danska banks says billions of euros flowed through its accounts from russia and ex-soviet states maybe the most important effect of this investigation was that dusky bank which is one of the most important european banks which was at the center of this scandal was suddenly in the public spotlight there was a huge public outcry in denmark chief executive thomas borgen quit following the money laundering investigation saying

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it's clear that dank's bank has failed to live up to its responsibility this went like a shockwave through the banking industry eventually these systems under their own corruption collapse the president of bosnia's muslim croat federation has been arrested in an anti-corruption probe the cases that occip brings to us really makes our policy work better you can talk for years before to them you have to change this this is dangerous due diligence is due nothing happened they're not going to pay attention it's when those occipital stories are coming out this is when policymakers really listen investigative reporters were kind of troublesome people we are really truly the last people defending the truth in some of our countries we want a global community of investigative reporters sharing data

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sharing techniques working across borders that is firmly tied to the public and the public good they are stealing and stealing but at the end people will say no [Music] all you can do is keep putting the facts on record so that the public as a jury builds up that momentum to pressure the change that needs to happen we reveal the truth we put out real news that is useful to the citizens to make informed decisions and demand justice so that gives you a little sense of who occrp is to define it more specifically occrp is a platform um a global platform for investigative reporting um and also a media organization so our job is to really um not so much develop an organization but develop an industry

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we're trying to to bring cross-border collaborative investigative reporting to journalists around the world and get them to work together on the important stories that are global in nature now you've probably never heard of us but you have probably heard of some of our stories through many the the organizations that publish us we've worked on the panama papers we did the work in russia and ukraine and eastern europe on that project you've probably heard the term laundromats a movie was named after it that comes from us it was a series of stories we did on some all-purpose fraud vehicles that were out there and we've been everywhere in places that that you don't necessarily see any offshore story you know that comes in globally has some connection to us often we help a lot of organizations we work with a lot of organizations so let me tell you uh just about an example of one of our stories that i think is kind of interesting um one of our reporters was looking at

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a um a a deal that had gone bad it was a romanian businessman who was buying tires from belarus which in the world of things is not very important but he had bought some tires before from this particular dealer and everything was fine and then one time he made a very large order of hundreds of thousands of dollars and he never got his tires and so he complained to the police the police investigated they got some documents but they didn't really understand what was happening and they let it drop um our reporter heard about this um and happened to be in moldova where the case file was and he went to the court and he just decided to look at the documents and in it he found documents that basically the police had gotten of the bank account where that report where that businessman had sent the money um and the police had gotten these records looked at them and they didn't know what to me it was all offshore companies it was weird stuff um

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and so we looked at it and we said huh this is kind of interesting it's going all over the world what what struck us first is it was a huge amount of money it was almost 900 million dollars that was flowing through that one account it happened to be in a bank account in latvia which we knew uh is a big money laundering um locale it still is a big money laundering locale and so we got interested in it and we broke it apart and reporters took a bunch of the transactions and they they looked them up and we noticed something very interesting the money coming out of this bank account didn't look like it was coming from a particular business some of the money was coming from a russian organized crime it was coming from triads vietnamese organized crime which was based in moscow the vietnamese triads it was coming from moldovan and ukrainian organized crime and it was mixing and was coming in from the sinaloa drug cartel as well but it was also coming in from uh

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the the government of ukraine uh the government of russia the government of moldova was coming in from state companies in russia and moldova and ukraine um and was going all out to to buy you know luxury uh apartments it was buying you know um uh you know uh expensive you know hundred thousand three hundred thousand dollar cars um so it was really kind of going all sorts of weird places and it didn't make any sense and one company would you know it would it would send once out to buy you know 500 million dollars in steel and then the next day it would buy flowers from the same company and then would buy computer parts and clearly this was not real business this was some kind of fake business what we call papering transactions they make up fake transactions to cover money flows and that's what we realized what was happening but what shocked us was all these different companies that were doing this and all these different different entities and groups and what we discovered is we called we wrote

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a story about it called the proxy platform but as we started to look deeper what we realized is there was a number of these that this was not just one account but this account was trading with a bunch of other companies and other accounts that looked exactly the same and as we got more information and as we talked to more people we realized there was this criminal enterprise that was going on that was shared by state actors and criminals all over the world um and uh we dubbed this a laundromat um so a laundromat is an all-purpose um a set of companies um that could be used to do just about everything so what it is it's a bunch of offshore companies and different jurisdictions and you put money into one of these companies and then it flows through these fake transactions with all the other companies and then they get spit out back to one of your own offshore companies in another place and so this happens all the time other people's money are coming in it's all commingled it's sent around the

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world in these fake transactions and pops out somewhere else and we've identified five laundromats but we believe there's probably in the dozens or even the hundreds of laundromats that are out there and many of these were doing 20 30 40 50 billion dollars in business and this is all kind of fake international trade and what we realized is governments were using this the government eizer by john was using it the government of russia was using it and it included many names of big banks we eventually helped uncover about danske bank and they had a branch in estonia and ski bank was a major danish bank but money was being laundered through a laundromat that was working out of donsky bank working with the russian um uh investment company called troika dialogue and so consequently what we realized is this was really part of the developing world economy

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this type of corruption this type of illegal stuff you can use it to launder money but you can also use it to you know steal money from your own organization or you can use it to steal money from a state organization or you can use it to bypass customs or you can use it to buy to avoid taxes you know um there's all sorts of different things if you've got an offshore company that you can pretend to somebody else but it's really you you can do business dealings with them so if your taxes if you've made a profit at 20 million at the end of the year you contract an offshore company to do some brand management for you for 20 million dollars and your profit goes away now you pay more no taxes and your money's offshore in a great location that you can use it for all sorts of other shenanigans um so you know there was all sorts of ways that this was being used for and it pretty much was impossible for law enforcement to track because if you were law enforcement you'd have to file a mutual legal assistance treaty which means you ask another country for

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information but that's probably an offshore country they may not have the information but even if they do give the information it takes on average two to three years to get a response to an mlat the problem is this account that we were looking at only lasted for eight months and these accounts only last for six or seven months because they know how long it takes for law enforcement to become aware of them and start to research them by then they're gone the company disappears the bank account disappears and it's set up somewhere else and it's doing it again and what we realized is many of the world's biggest players are playing through this and money was going through deutsche bank and was going through uh us banks and uh you know we we ended up getting a lot of banks closed down in in latvia because of this but there's more banks that are replacing them and there's banks in russia and there's banks in eastern europe and there are banks in offshore locations and so this continues to this day and as we move into uh cryptocurrency it's even going to be more difficult

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you'll see a lot of countries like russia and turkey and others want to set up cryptocurrencies uh in their countries and we know what that's for that's basically to keep all these things off the international books so that the the us correspondence accounts which deal with us dollars will never see them and then they'll never be get into trouble so that's one of the stories we worked on so uh what i want to talk about today is um the sense that i think that we all have that the world is really kind of a scary place not like it was when we were growing up in a lot of ways what's really scary about it is it it just doesn't really make sense things that seemed so clear before are not sure and you can't trust people like you used to be able to you know you can't trust the media you can't trust politicians you can't trust what you hear sometimes you can't trust your own friends and family um and that's made a lot of us really uneasy and in some senses it is true the world has

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changed a lot from from when many of us were young um and uh let us try to explain from our point of view what we think is happening and i think once you realize how things are working um they start to make a little bit of sense um and then they're uneasy from another standpoint um so our theory is that about 30 years ago um uh we there started to be what we call the criminal services industry and the criminal services industry was a small organization that would typically in offshore locations help criminals launder their money and that started to grow and grow and grow and became a rather large industry and started to spread around the world and the criminal services industry is really the law firms the banks the registration agents you know the hedge funds the business intelligence firms uh all

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those companies um who purposefully or unpurposefully go into business and help organize crime and corrupt people around the world move their money around and help them do stuff and as the world kind of globalized we talked about globalization all the time as the world started to globalize really the criminal services industry was a big part of that they really started you know connecting legitimate people but they also started connecting illegitimate people and it kind of created a perfect storm because of some other things that were happening those other things were the fall of the berlin wall suddenly there was large amounts of resources and money that had been trapped in eastern europe and in communist countries that started to get free and was able to move around to different parts of the world and also the development of a lot of developing countries you know suddenly countries like turkey and

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mexico and brazil became much larger and their resources much more exploited and those countries started to pour a lot of money into the international markets and so consequently there was this tremendous unlocking of funds around the world at the same time there was really the globalization of organized crime from the androngoda in italy which is about a 90 billion dollar industry to the mexican drug cartels to the colombian drug cartels we suddenly saw global drug trade become extremely profitable and extremely globalized and these same criminal service people started to help that industry so you had all these kind of big unlocking of money um and money that was not you know particularly good money in fact the money from the east was actually very profoundly undemocratic money and it started to pour in and it started to get stolen by people and it started to go

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into things like real estate in london and new york and in hedge funds in the united states and there's literally trillions of dollars that were looted and then moved and unlike business money which tends to be used right away organized crime and corruption money tends to sit in accounts and sit in real estate and suddenly became very important to the global economy these big pots of money that could be used and borrowed and and and basically go into play when it needed to and so this really supercharged the criminal services industry and like a lot of industries it's a small industry at first and it started to connect people so suddenly an oligarch from russia could come and meet an american lobbyist and get a a german bank and you know a london law firm to represent them and suddenly they became part of our

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global economy and the organized crime mixed with the corrupt politicians mixed with billionaires um you know libertarian billionaires tech billionaires you know all these billionaires who were interested and suddenly much more ideological than they had used to be and we had this kind of critical mass of all these people work together and suddenly what everybody realized is you know democracy is kind of a problem for us you know those are the ones who are going after us the law enforcement you know the the voters changing the laws and what happens if we could control that and what happens if we could manipulate that and so you saw a situation where suddenly the interests of a billionaire was in line with an interest of a drug dealer which was in line with an interest of a eastern autocrat and these connections actually started to happen and people became very powerful and influential

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and because this money was so undemocratic when it moved when when that oligarch went and bought his house in hyde park um and when he got his bank accounts there and when he got his children in school he suddenly said things like wow wouldn't this be nice if england wasn't part of the the eu what happens if it was its own little offshore um that we could manipulate um and consequently things like brexit came around um so suddenly in the the moneyed interest began to work at undermining law enforcement rule of law and democracy not in all cases but enough that it became a problem the other kind of critical part of the storm was social media and suddenly your big money could suddenly influence politics there's always been a backdoor to politics super pacs you know is is in the united states it's a situation where you can have a politician take a billion dollars from a corrupt person and it's okay that's freedom of speech in america and

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unfortunately that allowed an entry into the system and so we saw foreign nationals lobbying and foreign money represented by a blue blood american lawyer and a blue blood american hedge fund sitting down at the table and demanding changes in laws and and and messing with the system and funding extremist groups and and other people um who wanted to basically uproot the system and so um uh it things became quite crazy and you know we've been around this business about 15 20 years we know many of the characters that are involved in this and um we started in eastern europe where autocracy you know where we saw autocracy come out of democracy you know by doing things like capturing the media and capturing voters and capturing political parties and we can see that it can happen

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just as easily and has been happening in the west and that's really disconcerting and it's really depressing because in many ways we've always looked to the united states as being that bulwark of democracy and justice in the world and suddenly even the united states is getting undermined by um uh you know this propaganda misinformation that's being propagated from all sides for all different purposes and so um you know we we became concerned um about what was happening economically you had money leaving the developing world where it was really needed and where where businessmen you know now pay very high rates to get you know money for their small business and it's flowing in to apartments that are never used and large houses and hedge funds and it's made money very cheap in the west very expensive in the east and so trillions flow out of there and then we send back millions

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in food aid meanwhile our middle class people can't afford the major cities anymore uh property values have gone have been huge and there's lots of cheap money floating around which has made many of our businesses basically gamblers rather than true business people so it's a negative thing all around for everybody and consequently what we wanted to do is have people help people understand how this works and who's really behind the money so that's why occrp was formed we realized that this was a global network uh you know with the lattice work being that the criminal services industry and we needed a global network to follow this money and to track it so you need a network to track a network and that's what occrp has become so one of the problems with tracking organized crime and corruption internationally is that there really is no world

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policeman the united states is as close as uh we come to a world's policeman because the united states has been very proactive at trying to enforce laws but in many parts of the world they're you know national the law enforcement stops at national boundaries and so there's some protocols and some agreements and some treaties but they're weak and so there really is no world policeman so there's no natural enemy to organize crime it really moves very effortlessly across borders it's becoming stateless as our many autocratic leaders are becoming stateless as our company is becoming stateless so all these entities are operating in a place where there really is the wild west and i can assure you having sat and looked at bank accounts and business deals and everything for the last 15 years the world is far more corrupt than you understand it is far more corrupt it's really the wild west out there and this is putting all of us at at great risk um and so uh

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what you need to do to understand is is to to basically connect all those dots and most media you know media this is the other part of the the you know this this storm you know media is the weakest as it's ever been the internet has disrupted its business models and it's you know journalists uh organizations which were once 1200 reporters in big cities are now you know 100 reporters and so consequently a lot of stuff is just not getting covered although it is the golden age of investigative reporting because there's probably more investigative reporters uh working in the non-profit investigative industry which is sprung up to to continue the work that needs to be done so you'll see pro publica an international consortium of investigative journalists and all those organizations out there who are really working hard to tell the story and that's what we're trying to do and one of the problems is um it's a global story now you saw with with president trump

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many of his connections were global you know but you know president biden and his son are global you know um these people now have global footprints and we as journalists need to connect all over the world and with increasing uh difficulty and decreasing funds in the on the whole industry it makes it very challenging to do that so what we want to do is make it cheaper better and faster by connecting all those investigative reporters using a similar standard and a similar set of tools um to be able to communicate more effectively and it's working um we've gotten about 7.3 billion dollars seized from these bad guys and given back to states which is about a 50 000 return on the investment that's been made in us by the institutional donors and governments that fund us so consequently it's a very effective technique if you do go and look at these kind of global patterns

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and report on them so we've had over 500 people arrested because of our work we've had a couple leaders of countries uh who've lost their positions we had a revolution recently in kyrgyzstan because of the work that we wrote about there but a lot of the united states is not connected to these these global money flows these dark money flows and that's what's really important so occrp its job is to connect everybody all over the world together working with developing tools to be a platform for this investigative reporting to get done and to be able to get that information back in the hands of the people um so that they know what to do with it you know um we believe in the democratic system we believe people will make good decisions if they have all the good information but with misinformation and disinformation and propaganda and all the stuff that's out there that has really destroyed this this trust in news media it's going to be hard to kind of rebuild uh that credibility you know

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credibility is and credibility is a young tree and every time um yet you do something bad you hit it with an axe and eventually you kill it and the news media has seen a lot of exits and it's still not in the place where it needs to be but our job is to go back to old-fashioned investigative reporting where we go in and we try to prove everything with documents fact checking all provided on our website which we ask you to go look at at occrp.org so that's kind of the mission that we're on um and you know if you want to find out more about us if you want to read our content please go to occrp.org and and think about where you're getting your information and how you're finding out about how the world works and how your friends and your family are finding out how how the world works and i think eventually as we start to get those credible organizations rebuilt and connected in a global network um

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then we want to um to connect with the people in ways that haven't been so that they can actually contribute to the stories um more aggressively than has been in the past so that's kind of the mission of occrp i really appreciate the time today and i wish you all a good day thank you