Following digital data is like following a “trail of blood that leads to the knife for the murder investigation,” said Karen Greenaway, a U.S. Federal Bureau of Investigation agent. Greenaway, who has more than 20 years of investigation experience, was speaking at the Using Data to Counter Corruption and Money Laundering workshop at the International Anti-Corruption Conference (IACC) in Denmark.
How can one expose crime when money is being shuffled around from country to country, and how can one trace those behind illegal transactions that serve to launder money illegally? These were some of the central questions posed.
Here are some of the strategies and tools panelists shared:
1) Open Data
Open data of business registries is part of the solution, the panelists at the workshop said.
Datasets on corporate registrations and their beneficial owners that are freely accessible online provide a toolbox for scrutiny. Yet, as anti-corruption NGO Global Witness’s Anti-Money Laundering Campaigner Nienke Palstra said, this access is currently only provided by the United Kingdom, with governments arguing that not enough people would use it.
Palstra disagrees. “People are using it, and people are scrutinising it,” she said, adding that access rates had “skyrocketed”, with six million access points per year before it became free of charge, to two billion access points a year afterwards.
Howard Cooper, managing director of Kroll, a private corporation based in the United States that investigates corruption and money laundering, said public records – such as geotagging – held vast information that could uncover clusters of relationships.
2) Politically Exposed Persons (PEP) Database
To ensure money is not laundered through financial transactions, fellow panelist Daria Kaleniuk from Ukraine’s Anti-Corruption Action Centre (ANTAC) said that banks had to verify their clients, which could lead to the freezing of assets if they suspected money-laundering. She says that as banks often act globally, many times they fail to exercise their due diligence.
“It’s a comfortable excuse to say: ‘You know what, we were not able to identify PEP [politically exposed person] among our clients, because there is no such database by government or international institutions’”, she said.
To “kill the argument,” Kaleniuk and her organisation created a database in 2015 that kept track of all politically exposed persons – broadly speaking, people of political interest and their family members – and their investments. She said banks can use this database to check their clients.
“This will help create problems for the money laundering processes… across the western jurisdictions,” she said.
3) Use of Leaked Databases
Petra Blum, senior researcher with International Consortium of Investigative Journalists, said leaked information from corporations is crucial to uncovering money laundering abroad. For example, law firms often have access to information on beneficiaries of corporations.
“We think that the whole topic of offshore is about connections,” she said. “This is the philosophy of our database: it is about making those connections visible.”
