Simple Truth: #PanamaPapers are not “Papers”

On Sunday, 11.5 million documents were leaked from the archives of Panama law firm Mossack Fonseca. The documents are said to be revealing secret transactions of important figures from more than 40 countries.

Putting aside the political aspect, I see a different story here. But first I want to clarify a few points.

How can a single law firm collect so much information?

Mossack Fonseca is (was) famous for their secrecy. Since 1977, they have been providing their clients with the comfort of the ability to keep things behind walls.

So, why did they fail to keep things secret this time?

In order to understand the situation better, we need to go back to 70s.

Are you with me?

Let’s begin then.

Imagine yourself in Panama in 1970s, the founder of a law firm. Meeting with clients, making contracts. All is well. But you can’t believe how much paperwork you have to deal with. Probably, most of your budget is spent on paper and ink. The only difference between you and Gutenberg is the typewriter.

Copiers are the newest technology you can get. It’s a nightmare to use them (even worse than it is today). But you’re thankful for it anyway. After all, they didn’t even exist 20 years ago.

With those “high-tech” machines, it costs an American worker’s hourly income to copy 6 or 7 pages ($1.65). A comparison: If you wanted to copy a single page from each of the documents in #PanamaPapers leak, it would cost you 3 million dollars. You would need 20 years to check whether your name is in them.

Have you ever imagined yourself working in a world where you can’t copy and paste something from one document to another? We call it 1977.

While it’s so hard to create or copy a file, the only thing you need for security is to keep the originals safe. For example, if you keep them locked in a safe inside a room which can be unlocked only by you and your partners, you get a good night’s sleep.

Chapter 2: 2000s

Your firm became a huge operation in decades. You’re still suffering from the same problem: spending a fortune on paperwork. Moreover, you can’t satisfy your clients while the competition is getting more and more technological. A terrible paradox: the more successful you get, the more documents you have to deal with. The more documents, the more trouble you have to solve. There has to be a solution.

Finally, you adopt every technology you can get to make your business more digital. You invest a lot in computers and networks so that you can copy, save and scan all your files more effectively. Problem solved. You’re now working with global clients much easier.

On the other hand, you’re buying softwares to protect your clients’ secrets.

Secrets?

But there’s a huge problem: no matter what software you’re using, your documents are a part of the global information now. The moment you made one computer online with company files in it, you made them available for the whole planet. Any wall you will try to build can be destroyed by a hacker or someone inside the firm.

This is the main difference between 1977 and 2016.

Back in 1977, a document used to stay as it is if you left it alone. In 2016, it will “procreate”.

In 1977, it used to be easy to hide and took effort to copy.

In 2016, it’s easy to copy and almost impossible to keep it secret.

So what?

This changes everything. I’ll give a seemingly irrelevant example.

I was born in early 80s. I remember the time when people rushed to a mirror and freshened up before someone took their photos (We didn’t have selfies then).

Most of that generation find it inconceivable to share casual videos on platforms like Snapchat. In their world, it’s an extraordinary situation to let a private moment go public -unless you’re a celebrity. They used to find it offensive when they felt a camera flash on them.

Today, you don’t have a clue when someone takes your photo.

But for Millenials, existence comes with exposure -as long as the camera is not held by a frightful authority. Even when their camera is not on, they know someone else’s is. They are smart enough to not trigger Streisand Effect.

In an environment of free flowing information, we are getting used to the feeling of inevitability. Someday, it will all end with a news story headline saying “The last person without a nude pic on the Web has passed away in Nanyang, China”.

Is this evil?

You can’t judge a natural process. It just happens.

The problem is: while individuals are adopting, institutions are falling behind. Companies and states are failing to adapt but their very existence is based on the premise of “keeping information secret”. They don’t know what to do when they can’t. An institution without secrecy is like a person without oxygen. Even if there’s nothing illegal.

Drawing lines, putting locks, controlling the flow… These are all in the nature of being an institution. Technology is increasing the possibility of crossing those lines. No precaution will cancel out this possibility. We will see bigger leaks in the future. Be it a celebrity’s private pictures, a company’s secret documents or the citizenship database of a whole country.

Walls were last century’s method to protect your lines. Today, every institution needs to plan what to do when those lines will fail to prevent those leaks.