Bastian Obermayer and Frederik Obermaier - The Panama Papers

This is an interesting and very thoroughly researched account of the ‘Panama Papers’ leak from the law firm Mossack Fonseca that began in 2015.  The amount of data released is staggeringly large, some 11.5 million documents or 22.6 terabytes of data.  The journalists involved needed very expensive and advanced computers to search such a large database, including a $20,000 super computer!

The German journalists who originally received this data leak from an anonymous source shared the data with other investigative journalist around the world through an organisation called ICIJ (The International Consortium of Investigative Journalists).  As such, hundreds of journalists from different countries simultaneously searched the data for high profile figures in their countries and collaborated together on building evidence and writing stories.  The whole project was kept secret for probably 12-24 months, which is a staggering achievement given the sensitivity of the data and the number of people involved.  It says a great deal about the integrity of the consortium and its members!

Essentially, there is really one story; the rich and powerful make extensive usage of offshore companies and trust structures to move and conceal their assets.  These same structures are used by thieves, gangsters, terrorists, drug and human traffickers and all sorts of other criminals too.  They are also used by lots of the world’s largest corporations to avoid tax.  We are taken through several iterations of how the journalists built up evidence of such dealings for politicians, art dealers, corporate executives and footballers.  This gives a good example of the journalistic technique involved but the point, for me at least, always remains the same: Why are these structures allowed to persist? I really struggle to think of a legitimate use for a company with nominee directors, nominee beneficial shareholders and zero transparency on ultimate ownership.

I read in the FT yesterday (May 2017) that assets in the BVI have doubled since 2010 to $1.5trn.  Two-thirds of these companies are used by corporations for ‘tax structuring’ so it certainly doesn’t seem like the Panama Papers have caused a big fall in their usage.  It is probably worth noting that the majority of corporations using these structures don’t use illegally obtained assets, which making them less gratuitously illegal than say Putin’s best friend amassing billions of dollars in Russian shares.  However, the question still remains as to why these structures are allowed to survive, and flourish, today.  One possible answer might make appeal to the sanctity of privacy whereby we shouldn’t be obliged to divulge everything to the government.  However, as the authors point out, all that would be required here is the name, date of birth and business address of an asset’s owner.  This sort of system already exists in some Scandinavian countries although, presumably, their citizens could still use offshore structures to avoid it!  A more likely explanation may be that these structures suit the rich and powerful very nicely and so they will be very reluctant to seem them go.  This argument holds for countries as well as individuals as both the US and the UK benefit from the existence of tax havens within, or closely linked to, their jurisdictions.  Neither argument have much merit to me but the latter strikes me as the far more likely explanation for their continued existence.

These structures are really a slap in the face to the average citizen of an average country.  They’re saying explicitly what many people probably intuited already; there is one rule for you and another for people with money or power.  I see this as a serious problem and one that is only likely to get worse as changes in technology and data leaks like this one make secrecy harder and harder to achieve.  As Brunello Cucinelli, the CEO of cashmere company whose clients would certainly be rich enough to use the type of products offered by Mossack Fonseca, says, “Mankind is becoming more ethical, but it is not happening because man has decided to become better than he was 100 years ago. It’s because we know we live in a glass house where everybody can see.”  Leaks like the Panama Papers demonstrate the veracity of this idea and it seems like increasing digitisation will see this trend continue notwithstanding improvements in encryption.

One of the most evocative examples given in the book concerned a man whose father had lost a famous Modigliani painting, Seated Man with Cane, to the Nazis in occupied France.  The painting had been auctioned by the Nazis, disappeared for a while and then been auctioned again by Christie’s in 1996 to an offshore company without named beneficiaries.  When a relation of the looted art collector attempts to have his painting restored to him, the court finds it has no official owner and so the suit is withdrawn.  The Panama Papers reveal that the gallery owner Helly Nahmad, who had displayed the painting twice since its purchase at Christie’s and was suspected to be the current owner, was in fact the ultimate beneficiary even though he denied this on several occasion in order to keep the stolen painting.  It’s a sad story of dishonesty and a lack of decency.  I can’t comment on the strength of the legal case presented but I think it is obvious to everyone that Nahmad lied about his ownership of the painting.  Encouragingly, this painting was seized at the Swiss Freeport in 2016 as a result of the Panama Papers.

What about all the other people mentioned in the leak?  Have they been held to account and brought to justice?  Without having investigated each case individually it’s hard to comment definitively.  However, I have the overall impression that not a great deal happened after these incredible revelations.  Perhaps it’s because, in most cases, the ultimate beneficiaries of these companies and trusts are protected by the law.  If that’s the case, it’s simply yet another restatement of the double standards that exist for the rich.  Or as Leona Helmsley said famously, “only the little people pay taxes”.  In the end, whether it’s stolen state assets or untaxed assets moved offshore, the rich and powerful are still taking from those who don’t have much, which is the bleak and uncharitable reality.

This book is moving and powerful for the spotlight it shines on the dark corners of the global financial and legal systems.  It was also fascinating to learn about the journalistic practicalities of dealing with such a large and sensitive leak.  The negative points for me were the fact that, even though the individuals involved are different in each case, the stories have the same essential narrative.  So and so shouldn’t have an account or, better still, claims he doesn’t have one but then, lo and behold, he or she does have one! The style of prose was also slightly grating to me.  There is a lot mock surprise and attempted irony in the vein of, “X said he didn’t have any offshore dealings so it was confusing / surprising to find….” or “if X really didn’t have any knowledge, it’s odd to find him sending an email to….”.  I didn’t particularly enjoy it and found it got a bit repetitive.  On the whole, it was an informative account of an amazingly large data leak and the staggering amount of hard work the journalists involved with the ICIJ did to bring their findings from the data to press.  All of them deserve our thanks and congratulations for doing such important, and in some cases dangerous, work.

Nick Bilton - Hatching Twitter

I’d like to preface this by saying this is the only book about Twitter I’ve ever read.  I didn’t know anything about the company or it’s founders before I started and this is the only source that I have consulted in forming my opinions about it and them.  As such, I don’t claim any kind of objective veracity for my opinions, which are simply the impressions I formed while reading this author’s account.  In fairness to Nick Bilton, he seems to have researched this topic deeply and diligently but his is only one perspective, formed at some remove from the actual events, and I feel like these limitations should be acknowledged from the outset.

With that having been said, I found all four of the main figures are a bit nauseating personally!  With social skills in short supply, they all seems to betray one another and never air their true feelings face to face; preferring to go behind each others backs and avoid confrontation.  

To attempt a basic outline, Ev Williams is a quite likeable tech entrepreneur who is passionate about ‘push button publishing for the masses’, which seems worthy of respect.  To this end, he founds Blogger, sells it to Google and then quits to start another business, Odeo, with his neighbour Noah Glass.  This business focuses on podcasts and dies a death when Apple enter the market via its, then dominant, iTunes platform.  A young programmer called Jack (Dorsey) working at Odeo with Ev and Noah comes up for the basic idea for Twitter while DUI with Noah.  The three then work up the idea via ‘hackathons’ with various other employees at Odeo including the fourth co-founder Biz Stone.  Noah is the project’s first leader, helping incubate it with Jack at Odeo.  Jack, who seems to have brilliant ideas but be a little socially dyslexic, promptly goes behind Noah’s back and tells Ev to sack him and make him boss.  Ev does this and Jack runs the project, and latterly company, until Ev decides he wants to be CEO and ousts Jack as CEO by going behind his back and getting the board to remove him.  Ev also owned the majority of the company at this time and it seems money definitely spoke in this instance.  However, despite his effective removal from the day to day operations of the company, Jack, who retained the title of (silent) Chairman, goes on a media fuelled propaganda tour to inflate his profile before repaying the favour and managing to convince the board to get rid of Ev and re-appoint him!  Admittedly, Dick Costolo serves as interim CEO to soften the blow and Jack returns under the title of ‘Executive Chairman’ but it’s still an impressive feat for Jack to convince essentially the same board that got rid of him to then reinstate him despite Ev being the majority shareholder.  I should point out that I am assuming that Ev was still the majority shareholder but the book doesn’t go into much detail on the capital structure and equity holdings as the company evolves. I would’ve liked to know more, especially as I feel it’s relevant to the power struggles.  There would certainly have been further funding rounds since Ev became CEO so perhaps he had been diluted?  The book doesn’t relate.  Regardless of how impressive and tenacious this move was, I was still left feeling like all of the co-founders had a phobia of speaking openly with their so-called friends or treating them decently.  Is this just the nature of working with your friends at a company that is growing almost unthinkably quickly?  I sincerely hope that I’d have the decency to speak to someone face to face about a problem I had with them.  There again, perhaps these ‘friendships’ within Twitter actually signified little more than shared passions for technology, the project, fame or fortune that had nothing to do with love and personal affection.  The overall impression leaves you thinking, ‘it’s hard to believe how badly these so-called friends treat each other!’ Biz Stone comes off a little better but it is the best of a bad bunch, really.  His role seems fairly ill-defined but, according to the book, the venture capital investors were genuinely worried by his threats to quit meaning he must have been important at the company.  Perhaps mediating between the gigantic egos, power struggles and passive aggressive non-confrontations of the other founders; predominantly Ev and Jack as Noah had been ousted so completely, and so early in the piece, despite having an absolutely central role in the products creation, including the name.  However, this assessment of Biz’s job may be uncharitable given he is also mentioned on numerous occasions in connection with forming and preserving the culture of the company.  While this is hard to measure empirically it is of indubitable importance.  Perhaps the best example is when Biz attempts to stop Jack becoming a ‘moderator’ of some Twitter event with the President on the basis that the company’s culture forbade any role of this kind as it could be construed as Twitter participating in the conversation rather than simply hosting a platform on which it could take place.  Incidentally, when Biz sends an e-mail to point this out he finds that the recently returned Jack, now Executive Chairman, has suspended it!  This is typical of the kind of interaction between the four.

Another group who come out of the leadership struggles and changes looking very bad are the venture capital investors and board members.  Why are they condoning, and indeed facilitating, so much backstabbing and intrigue within the management, which must surely be detrimental to the company culture?  A charitable interpretation would probably appeal to the vastly different types of CEO a rapidly growing tech company needs during the various different stages of its development.  However, I don’t think this really holds true in this case.  Seemingly, Ev fires Noah in 2006-ish and Jack is CEO until late 2008 when Ev uses the board to remove him.  Seemingly this same board, plus one Peter Fenton from Benchmark was very enthusiastic about reinstating Jack and may also have bought a whooping great stake in the company, then ousted Ev in favour of Jack in only late 2010! Can so many changes really be justified by the needs of the company alone?  To me, it sounds far more like bunch of disingenuous schemers playing politics for money and power; both at the board and management level.  Fred Wilson and Bijan Sabet, from Union Square Ventures in NY, come out looking the worst at the board level.  Having helped Ev plot his removal of Jack in 2008 they then plot with Jack to remove Ev in 2010; talk about a toxic environment and a lack of trust!

The book itself painted some quite vivid pictures of the founders’ early lives and the early days of Twitter.  On the whole though, I found it a bit long on description and ‘setting the scene’ and a bit short on detail.  For example, the text has no dates in it so it is hard to get a firm grasp of the chronology.  I’ve also mentioned before I would have appreciated more detail on the capital and ownership structures.  Perhaps this sort of information is too niche for this type of book.  However, I felt like it would have benefitted from a few more dates and a few less descriptions of how many drinks these crrrrazy young entrepreneurs were imbibing! Given the large-ish cast of founders, company members, investors and hangers on the book should have had an index.  The prose can be a bit clunky in places too with one passage referring to how, “their sneakers tickled the concrete sidewalk”! Another passage I found irritating was, “In the past, history was always written by the victors.  But in the age of Twitter, history is written by everyone.  The victors became the ones with the loudest voices who get to tell their version of history”.  To me, this is deeply ill-conceived and does little more than restate, at length, and misinterpret the original material.  Namely, “the victors write history”.  In the past, accounts of what happened were clearly written by both the victors and the defeated.  However, the victors, who possess more money and power, have far more success in disseminating their version.  Exactly the same seems to be true of Twitter; lots of people write about an event and, ordinarily, those users who are most famous or have most followers succeed in disseminating their versions most effectively.  The passage does serve to raise the question of whether people tweeting are really ‘writing history’ or more accurately ‘writing source material’.  It’s possible to view the two as the same thing.  However, on the whole I felt like the both this passage, and the book in general, had a slightly awestruck tone in relation to Twitter’s technology itself.  Obviously, Twitter was a hugely disruptive and innovative force within society and has changed the way many people consume media.  However, I would probably have stopped short of describing it as changing the way history was written.  Has anything we consider ‘history’ today even been written in the past ten years, for instance?

There was one aspect of the book that caused me more trouble than any other.  It relates to the civil war between Jack and Ev.  Around p148 we are informed that Jack has been fired as CEO and will occupy a new role as ‘(silent) Chairman’, crucially without a vote on the board, which we are informed has been transferred to Evan.  To quote, “it would belong to Ev, who would maintain Jack’s voting rights...and would now have two board seats”.  Confusingly though, by the time we reach p259 and Jack is now in the role of ouster and Ev in the role of about-to-be-fired-CEO we find Jack seconding a motion to remove Ev.  How exactly has he managed to do this without a vote?  I found this bit the most troublesome because, unless I’ve missed something, the book seems to contradict its own assertion about what had happened, which is a fairly major flaw for a book purporting to be historical.  It’s quite a good example of how the author prioritised these sort of atmospheric, movie scenes above factual detail or lucid explanation of the chronology.

I learned something about Twitter’s history from this book, and it was enjoyable in places, but there were too many annoying mistakes and omissions for me to rate it very highly.

Gabriel Garcia Marquez - One Hundred Years Of Solitude

The beginning of this book blew me away.  I loved the prose although I did wonder if it might be even better in the author’s native Spanish!  It’s incredibly vivid and full of fun with almost cartoonish characters and magical situations and happenings.  The whole things brims with an originality, creativity and vivacity that’s totally infectious.  I loved the relationship between the original Buendia and Melquiades, his gypsy friend and trading partner, which is wonderfully rich and well described.

Sadly, the vibrant and engaging opening quickly gives way to future generations of Buendias and as these generations proliferate the characters become ever sketchier and events become increasingly haphazard and disjointed.  Indeed, I found it very difficult to work out what was going on after about the halfway point.  A family tree or list of characters is absolutely essential but, sadly, there was none in the edition I read.  The confusion is deepened by the fact that the successive generations of Buendia’s all have the same names. I didn’t enjoy the second half nearly as much as the first largely because of the increasingly frenetic pace at which new characters and ideas are introduced only to be discarded in favour of even newer ones.   This may have contributed to the following impression I formed during the latter part of the novel.

Namely, I found the characters and content of the second half of the book chaotic and orderless.  The prose remains engaging and evocative but I started to feel like it was more of a collection of fantastical, broadly unconnected short stories rather than a coherent whole.  Scenes such as the brothel filled with exotic animals struck me as flights of stylistic fancy with little or no connection to the broader plot.  It made me wonder if there was an elaborate allegory contained within the novel to which I was completely oblivious, which I continue to entertain as a distinct possibility.  However, the allegory would have to be very complicated, and the reader would have to have a very detailed knowledge of it, to require such an enormous cast.

Given my crescendo of confusion as the novel continued,  I found myself wondering at the book's conclusion what I had really understood from this novel.  Certainly, the repetitiveness or cyclicality of history and families was one theme I felt was ubiquitous.  The book starts with a pig-child born of incest and finishes with the same.  Characteristics and events are echoed down the generations and while it’s not the case that each generation lives the same life there was a definite sense of a historical cyclicality that is larger and more powerful than the individuals within it.  Indeed, this sense of cyclicality, that prosperity will turn to poverty and hubris to nemesis, was an enjoyable aspect of the book for me.  I only felt that it had been rather lost in the riot of characters and magical events.  

Another theme that seemed to be contained in many of the magical happenings concerns a loss of senses.  For example, for a long period in the town no one sleeps and, later on, Ursula goes blind.  As to the wider significance of this, I was unsure.  Perhaps it points to periods in history when everyone is in thrall to some new and fashionable idea and is unaware of the damage such a break with the past will bring; here I’m thinking mainly about the collective insomnia about which the townsfolk are initially enthusiastic before realising its drawbacks.  Another incident with obvious historical and philosophical implications is the massacre of 3,000 people in the town square.  This bloody incident and the denial of it by both the government and the banana company seem to point to the ability of powerful elites to manipulate the historical record and create their own reality quite apart from the facts of the situation.  This section feels angry and politically motivated and may refer to the treatment of anti-government elements in the author’s native Columbia and subsequent revision of the historical record.

The role of women is clearly most directly encountered through the role of Ursula, the original Buendia’s wife and the matriarch of the family through the one hundred years covered in the book.  Her resilient, capable character seems to illustrate the central importance of feminine influence within a family.  However, the suffering of tormented men at the hands of Buendia women, for example Amaranta, preclude any simplistic interpretation of women struggling to maintain order and decency amidst a shower of immoral and impulsive men!  

Both men and women indulge in the extremely wild and promiscuous sexual behaviour throughout the generations and the novel.  There are large quantities of inappropriate sexual relations, incest and illegitimate children.  However, this doesn’t necessitate equally large quantities of sexually explicit prose and it’s impressive that Marquez achieves the feeling of sexual intimacy and renders it vividly without being particularly graphic.  

On the whole, my enjoyment of the book was marred by the proliferation of characters and circumstances in the second half.  It was too much to keep track of and I felt the quality of each character or circumstance decreased the more of them Marquez kept adding!  However, the quality of the prose and his incredible eye for details remained magical throughout.  Never ending rains, a whole town without sleep, an orphan girl who’ll eat only whitewash and earth, a man followed constantly by swarms of yellow butterflies; these are only a few examples of features that really capture, and ignite, the imagination in a way few other books I’ve read have.  For this reason, it’s a magical book.  Albeit one best read in conjunction with something deeply practical and unmagical; a family tree!