Charmian Gooch: anonymous company ownership is fuelling corruption

"The tide is turning, and transparency is an issue whose time has come," Charmian Gooch, cofounder of corruption-busting non-profit Global Witness, told the audience at WIRED2014. "A sound business principle for setting up and launching a company is being abused by criminals across the planet -- we are all being ripped off, particularly the poorest on the planet."

Gooch is talking about anonymous company ownership, a legal business practice that is fuelling drug wars and enabling corrupt politicians across the globe to redirect funds and steal from their citizens. She and her cofounders have been battling the sources of corruption and environmental devastation for the past two decades, investigating how the illegal timber trade was funding the Khmer Rouge genocide back in 1995. That first undercover investigative report led to the Cambodian-Thai border being closed off, and contributed to the downfall of the regime. It also woke the world up to a practice that is far too prevalen, and which continues to operate relatively unhindered -- partly due to anonymous company ownership.

"So many countries rich in natural resources are home to some of poorest and most dispossessed people on the planet," said Gooch. "We call it the resource curse."

"Over the years, there has been one thing in common -- anonymous company ownership, time and again to hide elicit assets of corrupt politicians or those disguising wholesale looting of state assets."

She points to a recent World Bank Study that looked at 200 cases of corruption across 80 countries -- diverted funds amounted to $56 billion (£35 billion), and in 70 percent of cases the perpetrators had made use of anonymous company ownership.

"This, amongst other things, is helping keep poor countries poor."

Gooch gave two recent examples of this practice in action today.

It was revealed that Los Zetas, the infamous Mexican drug cartel, has been using anonymous companies since 2008 to launder money -- those companies are in the US, which continues to wage its "war on drugs", and include an Oklahoma company that hid the money in purchases of race horses. The problem, described in Global Witness report The Great Rip-Off, extends to human trafficking schemes, the sale of fake health insurance plans and government officials stealing millions meant for IT school projects.

She also cites the ongoing case of ENI and Shell's purchase of a Nigerian oil field for $1.3 billion -- shortly afterwards, it was revealed the majority of the cash ended up in a company linked to a former Nigerian oil minister.

"He was also previously convicted of money laundering," said Gooch. "Shell and ENI say they only dealt with the Nigerian government, and that money should have gone to Nigerian state coffers. Instead, it went to five companies with anonymous owners that are part of a network headed by obscure individuals. It's only thanks to investigations from authorities that we have any idea where it ended up."

Gooch asserted throughout her talk that she is not "anti-business" by any means. She is simply "against the practice of secrecy that has such negative impacts for everyone".

"It has helped Mexican drug cartels launder billions of dollars through big name banks, while thousands die in their drug wars. This needs to change. We need to look at this differently."

In a post-NSA world, she notes, we are all "freaked out about personal privacy". "But this is not about delving into people's private lives -- it's about having enough information to know who owns a company."

And things are certainly changing. David Cameron has called for a concerted and co-ordinated effort from the G8 and EU, and the European Parliament voted in favour of a change back in March. The G20 finance ministers are due to meet, and anonymous business ownership is also on the agenda, says Gooch.

"Anonymous companies are not in and of themselves a crime -- but they are the getaway car of choice for people responsible for all kinds of wrongdoing and they make it impossible for law enforcement to do their job."

Despite the positive moves being made, we are only at the start of a long battle, Gooch reminds us. But for her part, she will be at the heart of that battle, along with her Global Witness cofounders. And earlier this year she was awarded a $1 million (£600,000) TED Prize, which she will put towards a global campaign on the topic, and the creation of the first prototype of a public registry for the collection and publishing of all the critical information on who owns a company.