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How Nail Polish Helped Keep the Panama Papers Secret; When Bernie was Bernard; Imagine a World. Aired 2-2:30p ET

Aired April 11, 2016 - 14:00:00   ET




FREDERIK PLEITGEN, CNN HOST (voice-over): Tonight: the investigative reporters who first received the Panama Papers and the extraordinary

lengths they took to protect the information, including -- get this -- using nail polish.


FREDERIK OBERMAIER, JOURNALIST: That was the part where my girlfriend really laughed at me, when I bought that nail polish but we wanted to put

it on the back of the computers to see if somebody tried to manipulate the PC or the working stations, because, for us, it was really important to

guarantee the safety of the data, because there's such -- the data is sensitive.

So, for us, it was very important to keep it secret.


PLEITGEN: Also coming up, ahead of a big U.S. Democratic debate in New York this week, Larry Sanders, Bernie's brother, tells me the outsider has

got what it takes to go all the way.


LARRY SANDERS, BERNIE'S BROTHER: Bernard is not elegant but he's very powerful. He's very intelligent. He's very forthright and he's very well




PLEITGEN: Good evening and a very warm welcome, everyone, and -- to the program. I'm Fred Pleitgen, in for Christiane today.

From political fallout to political fight-back. A week after the so-called Panama Papers revealed links between Britain's prime minister and an

offshore fund set up by his father, an under-fire David Cameron made this statement to Parliament to deny any wrongdoing.


DAVID CAMERON, PRIME MINISTER, GREAT BRITAIN: This is bigger. I accept all of the criticisms for not responding more quickly to these issues last

week. But as I have said, I was angry about the way my father's memory was being traduced. I know he was a hard-working man and a wonderful dad and

I'm proud of everything he did to build a business and provide for his family.


PLEITGEN: And, of course, Mr. Cameron isn't the only world leader feeling the heat after last week's data leak, which is the biggest in history.


PLEITGEN (voice-over): The scandal has already brought down Iceland's prime minister and a further 12 current or former world leaders are

mentioned, along with more than 120 other politicians and public officials.

How the information was leaked from law firm Mossack Fonseca remains a closely guarded secret. But it was first handed to the German journalists,

Frederik Obermaier and Bastian Obermayer, who spent more than a year sifting through the more than 11 million leaked documents before finally

making them public.

The two joined me a short time ago from the Hotel Bayer's Boztepe in Munich.

Frederik Obermaier and Bastian Obermayer, welcome to the program.



PLEITGEN: So, Frederik, tell me, you guys were approached by this anonymous source, that called itself John Doe.

How did that go and what did you learn about this person?

OBERMAIER: It was over a year ago that this anonymous source contacted "Suddeutsche Zeitung," saying, "Hello, my name is John Doe," and asked us

if we are interested in data.

The way we communicated with the source, we do not want to reveal it, due to the protection of the source. But we communicated with the source on

encrypted channels, in different encrypted channels.

PLEITGEN: And how did you guys -- I mean, you worked on these documents for a very, very long time. There were many other journalists involved.

How did you manage to keep all of that under wraps, as a secret, Bastian?

OBERMAYER: Well, we didn't talk openly, obviously, and we had a lot of security measures that we had implanted. And the most important rule for

everybody was to really be careful who you talk to and to, you know, keep it for yourself.

And this is really an issue but it's really interesting stuff that you would have to report on and you're not allowed to for a year. But well, we

all were a little surprised that we made it.

PLEITGEN: How worried were both of you for your safety in all of this?

Because you guys were getting a lot of, you know, quite damaging information about very powerful and potentially very dangerous people.

OBERMAIER: Well, we were more worried about the safety of our colleagues in Russia and in Africa and in the Middle East. You know, in Germany, it's

not that dangerous. But still, we had those thoughts once in a while, yes. Yes, we did.

PLEITGEN: And, Frederik, you guys went to extraordinary lengths to try and make sure that you yourselves weren't hacked, weren't discovered, that

people wouldn't break into this room that you guys had locked yourselves into. And you even bought, I hear, glitter nail polish. Tell us about


OBERMAIER: I mean, that's -- that was the part where my girlfriend really --


OBERMAIER: -- laughed at me, when I bought that nail polish but we wanted to put it on the back of the computers to see if somebody tried to

manipulate the PC or the working stations, because, for us, it was really important to guarantee the safety of the data, because there's such -- the

data is sensitive.

So, for us, it was very important to keep it secret. So there have been -- there has been alarming system. We had a safe, where we put the data in

when we have not been in the office.

So for us, that was not normal, normal working procedures. So -- but it was very important and, in the end, it paid out because, in the end,

nobody, as far as we can say, was able to get access to the data who was not allowed to.

PLEITGEN: What I find interesting is that I've heard that this was not one dump of information. This was something that was ongoing, where you could

see that this company, Mossack Fonseca, knew that someone was getting information out of it.

But at the same time, you almost had a real-time view into them trying to prevent you from getting that. You had access to their e-mails. So you

saw the way they were reacting to the fact that they knew someone was inside their system.

OBERMAYER: Well, some e-mails have been leaked to us lately and we saw that they made some decisions, like they didn't allow the employees to use

the (INAUDIBLE) phones for e-mails and stuff like that. So they got a little alarmed over the month. But we didn't know exactly the measures

they did.

PLEITGEN: What do you think is the central lesson from what you guys have uncovered?

Because offshore accounts, in and of themselves, are not illegal. But, clearly, some of the things that have been done with them go well beyond

what's legal and also what's ethical.

What stood out to you the most?

OBERMEIER: It's very important to see that Panama Papers is not only about tax avoidance and tax evasion. And we do see in the Panama Papers that, in

the offshore world, criminals do hide their wrongdoings. People evade sanctions. They break or bust sanctions.

So everybody should realize that, if we talk about offshore, it's not only about taxes, it's about -- also about criminals and other shady people

hiding their doings.

PLEITGEN: One of the interesting things is that Mossack Fonseca has obviously since then come out and they said, we're a company that sets up

these offshore accounts for people. It's really not up to us what the people do there.

I want all of us to listen to an interview sound bite from Ramon Fonseca, who is the co-founder of the company. Let's listen to that real quick.


RAMON FONSECA, FOUNDER, MOSSACK FONSECA (through translator): We're a firm with nearly 40 years' existence. We have formed nearly 250,000 anonymous

corporations through our history and we take care only of the legal part. We do not participate in the activities of the company nor do we have any

responsibility over what the company does.

We sometimes don't know many times who the owner of the company is, because we will sell it to a lawyer or a bank, a financial or a trust company and

this company, that customer, has its final customer.

Remember that due diligence is something recent. Ten years ago, there was no due diligence. The term was not even known.


PLEITGEN: "Due diligence is something recent."

Why do you guys react to him saying something like that?

OBERMEIER: I mean, we heard -- in the last days, we heard several interviews like that, when Mossack Fonseca claimed that they are not doing

anything wrong.

But what we see in the data, that there are several, there are dozens of examples where we do see that they realize what their -- what the end

customers are doing with those companies. So they are clearly aware of it, because we see the e-mail conversations about -- between the compliancy

department and the departments speaking about end customers and their business.

For example, there's one case, when we see that they speak about the cousin of Bashar al-Assad, who was sanctioned in 2008 by the U.S. And they

realized that he is using some of the companies they set up but they kept him for a customer.

PLEITGEN: Yes, it's interesting, because that case was one that really stood out. And we're talking about Rami Makhlouf, who is sanctioned by the

U.S. since 2008. And there's a quote from one of the papers that you guys have provided to us, where Mossack Fonseca says, "As far as I can see,

there are allegations, rumors but not any facts or pending investigations or indictments against these persons."

What do you think is the significance of that document coming to light?

What does it tell us?

OBERMEIER: I mean, this is only one document among dozens, where we do see that they've realized who is Rami Makhlouf, that we saw documents where

they call him out. He is the cousin of Bashar al-Assad. There are documents where they realize that has claimed or alleged to be one of the

financiers of the Syrian regime.


OBERMEIER: But it seems that they didn't really care at the beginning. For years, for them, it was like, yes, we do have Rami Makhlouf as an end

customer, using our companies. But they kept him.

So this really shows me that when they speak about due diligence, they should speak about flawed due diligence because there was the warning, the

red flags of their compliance department. But they overruled it.

PLEITGEN: What do you think are the implications for a company like Mossack Fonseca, dealing with Rami Makhlouf?

Because we keep talking about how not all of this is illegal but some of it is unethical.

Where do you think dealing with someone like that lies in the realm of this?

OBERMEIER: I mean, this could be a real legal problem for Mossack Fonseca, because, although the company is headquartered in Panama, they have offices

in the U.S. So there would be a possibility for U.S. authorities to get after Mossack Fonseca.

PLEITGEN: I mean, this is -- I know you guys have done investigative work in the past. But this is a global thing that is -- that has brought one

government, basically, down or has led at least to a government crisis in Iceland. We've seen the British prime minister under pressure. We've seen

the circle around Vladimir Putin react angrily.

When did you notice that this was big?

OBERMEYER: When we countered like in 2015, which we knew this was going to be a big story. And the numbers of heads of state that we found with the

data or their really, really close allies or relatives is now nearly 70.

PLEITGEN: And I hear that one of the first people to actually see it online was Edward Snowden.

Is that correct?

OBERMEIER: Yes, for us, that was a surreal moment, because it was before the time for publication that we set. It was at a time when we at

"Suddeutsche Zeitung" internally tested our Web page, so because our technicians told us that they had to test it some minutes before the

official publication date.

And then we then saw Edward Snowden tweeting about this publication; that was a surreal moment.

And for us it was, like, whoa, was it really just Edward Snowden tweeting about the project we worked the last year on?

And for us -- but at the same time, for us, it was great, because through Edward Snowden there was a big audience getting known -- knowledge about

this project and we even saw it on our home page. We set up our English Web page of "Suddeutsche."

And in the first 24 hours, there have been more English-speaking readers than German readers and that was the first time in the history of this


PLEITGEN: Bastian Obermayer, Frederik Obermaier, thank you for joining the program.

OBERMAIER: Thank you.

OBERMAYER: Thank you, Fred.


PLEITGEN: And just want to bring you this as well.

In response to the possibility that authorities in the U.S. or elsewhere could pursue Mossack Fonseca over the Panama Papers, Ramon Fonseca, who you

saw in that sound bite, told the "Financial Times" -- and I quote -- "I don't expect this to lead to one single legal case."

Now coming up on the program, as Bernie Sanders and Hillary Clinton vie for New York's delegates in the U.S. presidential race, I speak to the man who

knew Bernie when he was Bernard. My interview with his brother, Larry Sanders, coming up next.





PLEITGEN: Welcome back to the program, everyone.

And just days from now, Bernie Sanders will debate rival Hillary Clinton in the place he was born, in Brooklyn.

It's an uphill climb for Sanders to clinch the nomination but there's no question that, whatever happens, the Vermont senator's popular push for

equality has made its mark on election -- on this election and beyond.

With New York's primary one week away, Sanders held a rally outside his childhood apartment in Flatbush. It was here where he lived with his

parents and his older brother, Larry.

Larry's also a politician but right here in Britain. So I got to sit face to face with the candidate's brother and ask about the man he knows better

than anyone else.


PLEITGEN: Larry Sanders, welcome to the program.

SANDERS: Thank you very much.

PLEITGEN: So how surprised are you by the fact that your brother, at this late in the game, is still doing so well?

SANDERS: I'm not completely surprised. I think the message he's got -- and which is getting across but slowly; it takes a long time for a whole

country to wake up -- is very powerful and resonates. So I think I expected that.

PLEITGEN: But on the other hand, even though he is doing well, there's not very many people at this point in time who actually give him a chance of

beating Hillary Clinton.

Do you think that he still has a chance to --


PLEITGEN: He's down pretty far as far as the delegates are concerned.

SANDERS: He's not that far down. He's about 200 delegates down in terms of the people who have actually been elected.

There are several hundred more who have not been elected, who've said that they would vote for Hillary. Now if Bernard keeps on winning primaries and

if the polls continue to show that he's the stronger candidate against the Republicans, a lot of those guys are going to think again.

PLEITGEN: Why do you think his values, his message resonates so well in this day and age?

SANDERS: Well, I think people have -- we've been through an awful long time of not -- things not being very good and sometimes being very bad for

the majority of people. This growing inequality, this 1 percent business, has been going on quite steadily for 40 years. And it gets worse, of

course, the more it goes on --


PLEITGEN: Do you think that it's backlash against the political establishment or against actual policies then?

SANDERS: I think it's backlash against the way the country is being run and the people who run it.

I think most people are now aware that sometimes the politicians are not really pulling the strings, that it's the people who contribute vast

amounts of money, who have lobbyists who own the newspapers, television stations, they have a huge amount of power and they use it for their own


PLEITGEN: But do you think that the policies that he's putting forward, many people have said they believe a lot of it is not achievable,

especially with the way that Washington is structured right now.

You have things like universal health care, breaking up the banks. I mean, it's stuff that others have tried in the past and it doesn't -- it just

doesn't work.

SANDERS: Well, the truth is that nobody's really tried since Franklin Roosevelt.

And he was --

PLEITGEN: Well, you had Obama, for instance.


SANDERS: Well, Obama didn't really try. Obama is a very good man and his values are good. But he decided very early on that he was going to play

ball and try to get the Republicans to play ball with him.

Bernard's idea is that you really have to go to the people. And if the people get interested in what you're after, then you win. But not just by


PLEITGEN: Who do you think -- who do you think are these people who support your brother?

Do you think that it is a sort of not very silent majority?

Or do you think that these are people on the fringes, even though that fringe is getting bigger, who feel somewhat disenfranchised by the economy

of the United States, by the political system of the United States?

SANDERS: It's very hard to call it a fringe. The recent polls show them, Ms. Clinton and Bernard, 50-50. So a very, very large fringe.

PLEITGEN: He's not a prototypical candidate, though, is he?

I mean, he's not somewhere where you would say, he necessarily looks like the next president or he doesn't necessarily sound like the next president.

He's not one of those polished speaking machines, is he?

SANDERS: He's a very powerful speaker. He is different from -- Mr. Obama's a beautiful -- if that's the right word -- man, very elegant.

Bernard is not elegant but he's very powerful. He's very intelligent. He's very forthright and he's very well trusted.

PLEITGEN: You obviously know him probably better than anyone else. So tell me something about him that would surprise us, that we don't know yet.

We hear so much from him and about him on the campaign. But there's got to be depths to him that we don't know about.

SANDERS: Well, I will mention something and it's coming to the fore. He is secular, in the sense that he doesn't have a concept of an individual

God that he prays to and so on.

But his -- the depth of his feeling that people need to support each other and help each other is very, very deep. He's beginning to call it

religious. I think he's right.

And I think the fact that he and Pope Francis resonate so well and, of course, Bernard is going to the Vatican to speak on these issues in a

couple of days. I think that that's something that most people wouldn't have thought of a few months ago.

PLEITGEN: You guys come from a very modest background, from a very modest upbringing.

How do you think that that shaped him?

How did you two also influence each other growing up?

And how big of an influence is that on you?

And how big of an influence do you think you were on him?

SANDERS: Well, the fact that we -- our family didn't have financial security impacts, because when --


SANDERS: -- our parents didn't argue a lot. But when they argued, it was about money. It was about the fear, if you spent this money, you won't

have it next week, we don't know what's going to happen next month. And I think that enters very deep into children.

And Bernard has carried that through his life. He's been a very successful man for 40 years now. But I think the depth of that feeling is important

to him. And he resonates therefore with millions and tens of millions of other people in --


PLEITGEN: Does he consult you nowadays?

Or does he --

SANDERS: No, no. He's never consulted me. We do talk about politics. The problem is, we agree too much and I think he's so much a better

politician, I would not give him political advice.

PLEITGEN: What do you think of the general current climate in America?

The way that the campaign is run there?

The way that the candidates there are attacking each other?

More so on the Republican side than on the Democratic side. But the general political debate in the U.S. at this point.

SANDERS: Well, the debate on the Republican side has been quite ridiculous. They hardly talk about issues. They just are angry at each


The Democratic side has been much more about issues. Ms. Clinton represents a very important strand of American politics. I think Bernard

is right to call it establishment. She gets her money and her support from people who have been doing that for her and for others for many decades.

Bernard comes from a different background. I think they're very legitimate opponents.

PLEITGEN: Do you think that America can overcome that divisiveness though?

Because it's been going on for such a long time. I remember it back to 2000, when all of this was new, with Karl Rove and the Republican

establishment, the perpetual campaigning.

Do you think that that's damaged American society?

And do you think that America can walk back from that?

SANDERS: I think what damages America is the underlying economics of it. You cannot deprive and disregard such a large proportion of the population

without paying a price.

And I think if Bernard is elected and begins to make good on that, then America will come together.

PLEITGEN: What do you think his foreign policy would be like?

Because we are an international TV channel.

SANDERS: OK. Well, I think his foreign policy would be -- America has, for many decades, for better and for worse -- in my opinion, mainly for

worse -- thought of itself as the policeman of the world.

Bernard does not think of America as the policeman of the world. He knows it's powerful and must have an impact on the world but he wants to see it

much less as it -- as a policeman. And I think you will see fewer wars, fewer interventions. And I think that that will be for the good.

PLEITGEN: What about Hillary Clinton?

Do you think that she would make a decent president?

SANDERS: Hillary Clinton -- Bernard has been very careful to say he respects her, she's very bright. I think that her background -- myself --

this is me speaking, not Bernard. I think her background of being in the same team with people like Goldman Sachs and all the rest of those people,

whose greed has brought us to a very sorry path, I think that limits her effectiveness.

PLEITGEN: What do you think that he needs to achieve now, going forward?

Obviously, New York is going to be very important. There are some other very important states coming up.

Do you think that he is ready for those challenges?

Is he still up for the fight that goes on?

Because a campaign like this -- I mean, we've all covered them -- is so draining. There's so many personal attacks. There's -- there are so many

harsh words that are exchanged.

SANDERS: Well, Bernard has the advantage that he doesn't have to keep shifting his policies. By and large, he's had the same policies for 30 or

40 years. So he knows where he comes from and he knows what he wants to accomplish.

He's got incredible stamina. You're quite right. I couldn't begin to do half of it. I think he's come this far, he'll go all the way.

PLEITGEN: Larry Sanders, thanks for joining us.

SANDERS: Thank you very much.


PLEITGEN: And as presidential candidates get their claws out in the fight for the nomination, we imagine a world earning its stripes. Tigers, making

a comeback, coming up.





PLEITGEN: And finally tonight, imagine a world clawing its way back from extinction.

For the first time in 100 years, the world's tiger population is growing with around 700 new tigers found since 2010 in the wild, when little more

than 3,000 were recorded.

Like any good news, after a century of decline, which almost wiped out the 100,000 tigers roaming the Earth's jungles. Now the big cats are becoming

more abundant in the wildernesses of India, Nepal, Bhutan and Russia and conservationists are pouncing on the new data, exalting the teamwork of

governments, charities and local communities.

But, of course, major challenges still remain. In Southeast Asia, for instance, the demand for palm oil has led to major deforestation,

devastating the animals' natural habitat in countries for instance like Indonesia.

To capitalize on the successes and to halt the failures, this week, India is hosting a summit of the world's 13 tiger countries in Delhi. Together,

they hope to double the tiger population by the year 2022 and show that, though tigers can't change their stripes, the world hopefully can.

And that's it for our program tonight. Remember, you can always listen to our podcast, see us online at and follow me on Facebook and

Twitter. Thank you for watching and goodbye from London.