Follow the money: investigative journalism using data (chapter)

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Follow the money: investigative journalism using data

Kathryn Corrick assesses the power of open data and websites that aggregate financial and company information when investigating

company finances and government spending, and offers some useful tips for would-be investigative data journalists

Introduction When Ben Bradlee, executive editor of The Washington Post from 1968 to 1991, was asked of the lasting legacy for Watergate, he replied: ‘Follow the money’ (The New York Times, 1997). The phrase, made famous by the 1974 film All The President’s Men telling the story of the Nixon Presidential scandal, has been a rally cry and methodology for investigative journalists from there on in. But it’s not just investigative journalists who need to understand where money and the relationships between business, government, third sector organisations or individuals lie. Often the most straightforward articles require basic information or facts about a business to give context.

Over the last five years a large amount of government, company and spending data has become openly available globally and a number useful tools and services to access this data have come online. What’s more some of these services have begun doing some investigative journalism themselves to show what’s possible or to scratch an itch. Company website, LinkedIn and Wikipedia searches are useful but they do not always reveal key data or enable systematic data queries. National governments hold registers of companies for tax and other purposes. Wikipedia has a list of 197 country company registers at https://en.wikipedia.org/wiki/List_of_company_registers.

In the UK Companies House holds this data. Its database holds more than 170 million records (Companies House, 2015), which can be explored, for free at https://beta.companieshouse.gov.uk/ or via their API at https://developer.companieshouse.gov.uk/api/docs/. Companies House data includes a filing history, where appointments and terminations of directors, full

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accounts and annual reports are available to download as PDFs. As an example, PDFs of Marks and Spencer PLC’s submitted files can be downloaded for free currently back to March 1995: https://beta.companieshouse.gov.uk/company/00214436/filing-history.

Electronic data of filed accounts is available as a daily download at http://download.companieshouse.gov.uk/en_accountsdata.html formatted as XBRL or iXBRL. eXtensible Business Reporting Language is a freely available and global standard for exchanging business information. XBRL allows the expression of semantic meaning commonly required in business reporting. Currently about 60 per cent of Companies House filed accounts are submitted electronically (Companies House, 2015).

Whilst searching the national company registers may be an obvious place to start, many countries have not made this data freely available, and not all companies are named in ways you’d expect, or have multiple holdings and subsidiaries across jurisdictions. Registers can sometimes be held at state rather than national level - as with the US and Mexico. Even if the register is publicly available it may not include data such as directors, latest accounts or shareholders. One way to check if a national government has made company data available publicly is to go to http://registries.opencorporates.com. Those researching companies in the UK, Denmark and Norway are the most likely to find information they are looking for.

Where else to begin? Founded by former journalist Chris Taggart, OpenCorporates.com have an open database of more than 85 million companies in the world, which is continually being updated and added to. You can access the data via their online search engine, or through their API at http://opencorporates.com. Data can be searched by company name, address, number or director’s name and filtered by fields such as jurisdiction, company status and company type. Similarly named companies and both active and inactive directors are also listed and many pieces of data are links which can be used for cross-referencing or further exploration.

Crucially, where data is available, search results show how a company connects to a wider corporate grouping. Such a group will highlight holdings, non-profit companies, subsidiaries and offices in different jurisdictions. A list of corporate groupings collected to date can be found at https://opencorporates.com/corporate_groupings. For example, Google’s corporate grouping has 60 companies known by OpenCorporates (Open Corporates, 2015), which include Base Steel Ltd in the UK, Get Found on Google Inc. in Michigan and Google Energy Private Ltd in India. Disney, by comparison, has 667 companies listed in its grouping (Open Corporates, 2015). Such relationships are often complex and obscure how citizens often understand a corporation as a single entity.

For example, Amazon paid £11.9m in UK tax in 2014 from a recorded profit of £34.4m of its British-based Amazon.co.uk limited subsidiary. Yet the


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Amazon group posted a strong UK sales performance with overall takings rising 14 per cent to £5.3bn representing 9.4 per cent of its global sales. As the Guardian explained:

‘As in previous years, the UK accounts make clear Amazon.co.uk Limited claims not to sell to British online shoppers: instead the group’s Luxembourg arm fulfils that role. Amazon.co.uk Limited’s much more modest turnover of £679m comes from providing “fulfilment and corporate support services” to Luxembourg’ (the Guardian, 2015).

Amazon’s UK sales, as well as those from Germany, France and other European countries, are taken through its Luxemburg company Amazon EU Sarl. Confusingly, Amazon EU Sarl reported a loss last year through the use of other company structures to move profits from Amazon EU Sarl back to the US (Guardian, 2015). As this shows, beginning to gather data on these subsidiaries and their relationships (and there is a long way to go in doing so) makes it a little easier to follow the money.

To show the power of this data OpenCorporates worked with data visualisation company Kiln to produce an online interactive map showing a selection of corporations (Open Corporates, 2015).

Figure 44: Source: Data visualisation of Goldman Sachs company holdings by location, and chains

of control, screen shot, Open Corporates, 2015, https://opencorporates.com/viz/financial/index.html#goldman

Companies in the investigation included Goldman Sachs, Morgan Stanley and JP Morgan. The visualisation gave a point on a map for each holding, which could then be hovered over to see its relationship (chain of control) and connections with the rest of the group and with its headquartered offices. OpenCorporates differentiated companies located in tax havens as well as who controlled each company. The map for Goldman Sachs, for example, showed that the number of subsidiaries Goldman had registered in the tax haven of the

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Cayman Islands - population 58,435 – was more than any other country outside the US and only half that of their subsidiaries registered in the US – population 318.9 million. Additionally the control chain of companies was sometimes found to be 15 deep.

Less sophisticated network and tree maps are available for a number of company groupings, such as this tree map of The Gap’s known companies: https://opencorporates.com/companies/us_de/2157877/network. To take this further OpenCorporates launched Map The Banks (http://mapthebanks.com/) - a global data collection and crowd sourced project to collect, publish and link banking regulator data with company data on banks. Their rationale: ‘The financial crisis cost society over $10tn. Before we can disrupt the industry, we need to understand what it looks like.’ (Map the Banks, 2015)

As these visualisations of financial firms begins to show, tax is only one issue such company group data helps reveal. It can also show the nature of a less well-known company’s business and understand the real scale of a corporation’s activities. This may seem rather innocuous and abstract until applied to an industry such as oil, where ownership and management of land and resources, the environment as well as the value chain, national economies and politics are combined.

Consultancy and publisher, OpenOil aims to make ‘the world's oil contracts available at a click’ (Open Oil, 2015). They have so far collected 732 contracts across 72 countries, which can be searched and downloaded using their wiki at http://repository.openoil.net. In partnership with OpenCorporates, they have investigated the network of oil companies and contracts in Nigeria and BP’s corporate network (Open Oil 2015). Their Nigeria network map (Open Oil, 2015) shows primary production contracts awarded to oil companies by the government, secondary service contracts awarded to producing companies to service companies and companies involved in the oil industry in Nigeria. For each data point in this network they provide a reference to the data source. This can either be a website link to a company report, government website or media article; or a link to a document they have extracted from the Nigerian company register.

For contracts on which they have data they include: the dollar value of the contract; the field and license area relevant to the contract; the announcement date; and duration of the contract. For production sharing contracts they also include the percentage share of the contract held by each company (Open Oil, 2015) OpenOil have released some of their data (which goes beyond BP and Nigeria) as an API (Open Oil, 2015), which could be used for further investigations, to answer questions like: ‘who holds exploration licenses in Brazil?’ Another data source for those looking to follow the money within the extractive industries is Resource Contracts (beta) http://www.resourcecontracts.org/#documents which has 374 documents (mostly contracts) across 53 countries. Whilst less extensive than OpenOil, some of the documents date back to 1958.


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These contracts remind us that the biggest relationships companies often have is with government, and that citizens taxes go to provide services, supplied by both the public and private sector. But before putting in a Freedom of Information request to understand a national government’s spending or budget it’s, again, worth discovering if this data is already available.

Since 2013 the Web Foundation have annually surveyed 86 countries on their publishing of open data. You can view country summaries as an interactive graphic at http://www.opendatabarometer.org/report/analysis/explorer.html where, amongst other indicators, it shows whether budget, spending and company data are available.

Figure 45: Graphic shows Open Data Barometer Country Explorer for Canada, source:

www.opendatabarometer.org/report/analysis/explorer.html, David Tarrant, Creative Commons, Share Alike (CC-BY-SA)

In the UK, a prime ministerial letter in May 2010 outlined requirements for the publication of expenditure as open data (Cameron, 2010). As well as the publication of all new items of central government spending over £25,000 and all items of local government spending over £500, it included the request to publish contracts and tenders. But be warned, how such data should be published was not part of the requirements. This has meant that publication and format vary by authority and department from PDFs through to machine-readable data. One of the first sites to exploit the release of spending data in the UK was a project called ‘Where Does My Money Go?’ (Where Does My Money Go?, 2015), run by the Open Knowledge Foundation and supported by Channel 4’s digital investment fund, 4IP. The project visualised macro departmental and regional spending, as well as calculating roughly how much an individual’s income went on tax and where it was proportionally spent.

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Figure 46: UK country and regional spending analysis. Source: Where Does My Money Go,

http://wheredoesmymoneygo.org/bubbletree-map.html#/~/total, Creative Commons license CC-BY 3.0

The project proved to be popular globally and morphed into the larger grassroots site OpenSpending.org, again run by the Open Knowledge Foundation. It believes that ‘by understanding how governments spend money in our name can we have a say in how that money will affect our own lives’ (OpenSpending, 2015). Run by volunteers and crowd sourcing, its focus is on data collection and cataloguing rather than visualisations, and houses 1,064 spending datasets from 75 countries in 36 languages. Highlights include 395 datasets for Japan – the highest for any country listed; Albanian election spending; EU Commission grants; and commitments for Greece.

The publication of spending data isn’t always about what is said, but what is not said, what isn’t revealed at a granular level – none more the case than budgets for secret services. The US administration’s ‘Black Budget’ (OpenSpending, 2015) – its secret service operations budget – was leaked by Edward Snowden, and published by The Washington Post in August 2013 (Washington Post, 2013). As journalists Barton Gellman and Greg Miller reminded readers, that whilst the US government has annually released its overall level of intelligence spending since 2007, ‘it has not divulged how it uses the money or how it performs against the goals set by the president and Congress.’ (Washington Post, 2013) The Washington Post’s visualisation of the data (Washington Post, 2013) reveals for the fiscal year 2013 a US$52.6bn (£34bn) spend on covert action, surveillance and counter-intelligence across 13 US government agencies that included the Departments of Justice, Energy and Treasury, as well as the CIA


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and NSA. Data collection costs, topped a number of agencies’ spend with the CIA’s totalling US$11.5bn (£7.4bn), not including their US$387.3m (£250bn) spend on data processing and exploitation and $1.1bn on data analysis. For spending comparison, the UK spends £2bn in total across the three security intelligence services of GCHQ, MI5 and MI6. This is provided from the Single Intelligence Account and the National Cyber Security Programme (MI5, 2015). The Washington Post’s report or leaked documentation (Washington Post, 2013) does not however reveal how spending is apportioned to private sector contracts and to whom.

Whilst SpendNetwork (www.spendnetwork.com) can’t solve this challenge, it aims to make UK government spending and contracts data easier to use. Their target audience isn’t journalists but companies wanting to supply government. Their data so far comes from UK central government, English regions and Wales, but does not include Scotland or Northern Ireland. For a journalist with a local, business or government beat it could be of particular value.

Their main free tool currently has two types of searches – one for buyer/supplier data and the other for EU tenders. On entering a supplier in the buyer/supplier search users are shown a graph of revenue over time, the number of transactions, who made the transaction, the amount each transaction was worth, the date of each transaction and a link through to further details for each transaction. The data can also be filtered by buyer, listing all those who purchased a supplier’s services. For example, there are 11,476 transactions listed under ‘British Telecom’ by 83 buyers since 2011. Northumberland Unitary Authority spent the most, purchasing £7.95m of services on 356 transactions (SpendNetwork, 2015). Hillingdon Council have made the highest number of transactions to British Telecom with 1,854 and East Sussex County Council have paid the highest single transaction to British Telecom where their Economy, Transport and Environmental department spent £1.6m in December 2014 (SpendNetwork, 2015).

On entering a buyer, such as a government department, users are shown the reverse face of the supplier data – the buyer’s spending transactions, their worth, date and a link to further details. These can be filtered highest/lowest, most/least recent. Separately, entity data is also available, which brings together spend, tenders, contracts and suppliers, such as for the Cabinet Office here: https://www.spendnetwork.com/entity_spend/CAB010_CO_gov.

Using this spending data and - once again - OpenCorporates data, SpendNetwork worked with the think tank, Centre for Entrepreneurs, to investigate how much English and Welsh local authorities spent using small companies between 2011 and 2014 (Spend Small, 2014). At a time where government is claiming to want to support small businesses and to encourage local entrepreneurship, they found that of the £89.1bn spent on 42 million transactions by local authorities with companies only 12.5 per cent (£11.1bn) was spent with small companies. Monmouthshire County Council spent the highest proportion of its budget with small companies at 25.6 per cent and

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Barnsley Metropolitan Borough Council the least at 4.17 per cent (Spend Small, 2014).

Conclusion From the macro picture of Where Does My Money Go? to the more micro transaction data now available via SpendNetwork, much work has been done for understanding and making UK government spending data more usable in five years. And if open data keeps gathering pace globally, as we have begun to see, then we might expect similar tools to be appearing elsewhere. Whilst the stories such data potentially stores may not be as big as Watergate or Edward Snowden’s leaks, the ability to use company, government and spending data to fact check and make straightforward investigations, without the need for specialist data or coding skills, is now easier than ever.

Similar moves are also happening in the non-governmental organisation and third sectors, where organisations such as IATI, USAID, DfID, the World Bank, OpenBRF and Publish What You Fund are leading the way in aid and sustainable development spending transparency. But data by itself is never the story, only with context can it be used to create information, insight and may be that scoop.

Follow that money…

References Bowers, Simon (2015) ‘Amazon’s UK business paid just £11.9m in tax last year’ in the Guardian, 24 June, available at http://www.theguardian.com/technology/2015/jun/24/amazons-uk-business-paid-119m-tax-last-year, accessed 17 July 2015 Cameron, David (2010) ‘Letter to government departments on opening up data’ gov.uk, available at https://www.gov.uk/government/news/letter-to-government-departments-on-opening-up-data, accessed 27 July 2015 Companies House (ND) ‘Free Accounts Data Product’ available at http://download.companieshouse.gov.uk/en_accountsdata.html, accessed 13 July 2015 Companies House (2015) ‘Launch of the new Companies House public service beta’ available at https://www.gov.uk/government/news/launch-of-the-new-companies-house-public-beta-service, accessed 17 July 2015 Gellman, Barton and Miller, Greg (2013) ‘“Black budget” summary details US spy network’s successes, failures and objectives’ in The Washington Post, 29 August, available at https://www.washingtonpost.com/world/national-security/black-budget-summary-details-us-spy-networks-successes-failures-and-objectives/2013/08/29/7e57bb78-10ab-11e3-8cdd-bcdc09410972_story.html, accessed 27 July 2015 Map the Banks (ND) available at http://mapthebanks.com, accessed 27 July 2015 MI5 (2015) ‘Funding and resource allocation’ available at https://www.mi5.gov.uk/home/about-us/who-we-are/funding.html, accessed 27 July 2015


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Open Corporates (Nd) ‘Google search’ available at https://opencorporates.com/companies?jurisdiction_code=&q=Google, Accessed 17 July 2015 Open Corporates (ND) ‘Disney search’ https://opencorporates.com/corporate_groupings/Disney, accessed 17 July 2015 Open Corporates (ND) ‘How complex are international corporate structures’ https://opencorporates.com/viz/financial/index.html#goldman, accessed 17 July 2015 Open Oil (ND) http://openoil.net, accessed 27 July 2015 Open Oil (ND) ‘BP Corporate Network’, available at http://openoil.net/corporate-networks/bp-corporate-network, accessed 20 July 2015 Open Oil (ND) ‘Nigeria Corporate Network’, available at http://openoil.net/corporate-networks/nigeria-corporate-network, accessed on 27 July 2015 Open Oil (ND) ‘Open Oil API’, available at http://openoil.net/openoil-api, accessed 20 July 2015 Open Oil (ND) ‘Main Page’, available at http://repository.openoil.net/wiki/Main_Page, accessed 27 July 2015 Open Oil (ND) ‘Nigeria National Petroleum Corporation’, available at https://data.openoil.net/#nigeria_production, accessed 20 July 2015 OpenSpending (2015) available at https://openspending.org, accessed 27 July 2015 OpenSpending (2015) ‘Black Budget’ available at https://openspending.org/black-budget, accessed 27 July 2015 Safire, William (1997), ‘Follow the proffering duck’, in The New York Times, 3 August, available at http://www.nytimes.com/1997/08/03/magazine/follow-the-proffering-duck.html, accessed on 13 July 2015 Spend Small (2014) http://spendsmall.org, accessed 27 July 2015 SpendNetwork (2015) ‘British Telecom’, available at http://www.spendnetwork.com/topBuyersBySupplier/01626499_com# accessed 27 July 2015 SpendNetwork (2015) ‘Transaction – East Sussex County Council / British Telecom plc’, available at http://www.spendnetwork.com/transaction_detail/E1421_ESCC_gov_2014_12_496, accessed 27 July 2015 Unnamed author (2013) ‘Inside the 2013 US intelligence “black budget”’ in The Washington Post, 29 August, available at http://apps.washingtonpost.com/g/page/national/inside-the-2013-us-intelligence-black-budget/420/ accessed 27 July 2015 Unnamed author (2013) ‘$52.6 billion: The Black Budget’ (visualization) in The Washington Post, 29 August, available at http://www.washingtonpost.com/wp-srv/special/national/black-budget, accessed 27 July 2015 Where Does My Money Go (ND) available at http://wheredoesmymoneygo.org, accessed 27 July 2015

Economy & Finance

Follow the money: investigative journalism using data (chapter)