The first are the reflections of Zachary Pergrossi, a senior in finance who became interested in ethical codes in accounting, finance and business.
The release of the documents from the Panamanian corporate service provider Mossack Fonseca (see
Mossfon.com), dubbed “The Panama Papers”, has caused quite a bit of controversy surrounding the
parties involved and the ethical breaches they committed. The leak has already seen lasting
repercussions for notable figures worldwide. Ties to political leadership (including Russia’s Vladimir
Putin and the Prime Ministers of Iceland, Britain, and Pakistan, among others) 1 have already caused
sudden responses from the public. The resignation of Icelandic Prime Minister Sigmundur Gunnlaugsson, in particular, showed the response that a breach of ethics can cause. As a member of Iceland’s Progressive party, a violation of the public’s trust brought non-partisan support for nation-wide protests. Results like these come from a clear breach of the ethical codes our societies subscribe to, but these were not the only codes bent or broken during the revelation of the Panama Papers.
Many codes were broken in the years-long process to reveal the information. So why, then, is the
breach of code by the whistleblowing hacker 2 celebrated while those of Mossack Fonseca and its clients are reviled? A close look at each code can help us to understand the public sentiment toward this issue.
The first thing to note about this situation is that Mossack Fonseca has no specific code of ethics
whatsoever. Their site boasts of their services and accomplishments but does not specify the codes they operate under. However, following the leak, Mossack Fonseca detailed some of the rules they follow in dealing with clients:
we conduct due diligence on clients at the outset of a potential engagement and on an ongoing
- we routinely deny services to individuals who are compromised or who fail to provide information we need in order to comply with “know your client” obligations or when we identify other red flags through our due diligence;
- we routinely resign from client engagements when ongoing due diligence and/or updates to sanctions lists reveals that a party to a company for which we provide services been either convicted or listed by a sanctioning body;
- we routinely comply with requests from authorities investigating companies or individuals for whom we are providing services;
- we work with established intermediaries, such as investment banks, accountancies and law firms, as part of the regulated global financial system. 3
dodgers worldwide. The failures of codes of ethics to prevent situations like this are one of the most
common arguments against the documents. Some argue, even, that “aspirational” codes of ethics
simply reveal the organization’s commitment to not being able to follow their own code. A code made simply ‘for show’ will do nothing to prevent unethical behavior. Unfortunately, many codes seem to be made as public relations pieces rather than a governing document. A strong code, though, provides protections for both professionals and the people they interact with.
Where Mossack Fonseca’s code failed them, the journalists’ did not. Each was a member of the
International Consortium of Investigative Journalists (ICIJ) and held to a strict set of principles about how the information was to be handled. While journalists from the Sueddeutsche Zeitung had access to the data for over a year, the maintenance of their code of ethics allowed them to work with ICIJ members during this time for over a year without information being leaked to the public. A concerted effort from the ICIJ members allowed them to release the information in unison to maximize the effect of the documents. This coordination was important to the journalists because of the potential harm a mistake could cause. Naming an individual in a case like this was a serious matter. Beyond that, the nature of the information could potentially put the journalists at risk for retribution; only a simultaneous release could protect them, and only a strict code of ethics could accomplish that.
Even now, the journalists stick to their ethics. Asked to release the raw data, employees of the
Sueddeutsche Zeitung explained that they could not:
“We are not going to release the raw data and we have valid reasons to do so. The source
decided to give the data to journalists and not, i.e., to Wikileaks. As journalists, we have to
protect our source: We can’t guarantee that there is no way for someone to find out who the
source is with the data. That’s why we can’t make the data public.
And as responsible journalists we also stick to certain ethical rules: You don’t harm the privacy
of people, who are not in the public eye. Blacking out private data is a task that would require a
lifetime of work - we have eleven million documents!” 4
While weak ethical stances allowed Mossack Fonseca’s clients to dodge taxes and regulation on a global scale, strong ethical codes allowed the Panama Papers to make an impact on the corruption of the world’s elite. A code of ethics made to be seen will prevent nothing, but a code of ethics meant to be followed will make all the difference.
To bring one of the latter type to your company or organization, please see the IIT Ethics Code
Collection’s resources on writing and improving codes of ethics.
1 http://www.nytimes.com/2016/04/06/world/europe/panama-papers- iceland.html
2 http://www.usnews.com/news/articles/2016-04- 06/mossack-fonseca- blames-panama- papers-leak- on-hackers
3 http://www.mossfon.com/media/wp-content/uploads/2016/04/Statement- Regarding-Recent- Media-Coverage_4-1- 2016.pdf
4. https://www.reddit.com/r/IAmA/comments/4fi6ck/we_are_the_investigative_journalists _who_worked
http://www.usnews.com/news/articles/2016-04- 06/mossack-fonseca- blames-panama- papers-leak- on-hackers
http://www.mossfon.com/media/wp-content/uploads/2016/04/Statement- Regarding-Recent- Media-