The following post is by Chris Taggart, a participant in T/AI’s upcoming Follow the Money Workshop in Berlin. He is the founder of OpenCorporates and sits on the UK Government’s Local Public Data Panel, the UK’s Tax Transparency Board, and Open Knowledge Foundation’s open government working group.
Last month OpenCorporates released Who Controls It, an open-source, proof-of-concept, very much “alpha-version” Beneficial Ownership Register.
We don’t expect this project to solve all the problems created by opaque and anonymous companies, particularly those used for criminal purposes – fraud, organised crime, money laundering, tax evasion, corruption, etc. That’s going to take a lot longer, and understanding who controls companies is only one essential step along the way.
No, the point was to get started now on this long road and, with the help of wider open data and transparency community the community make real progress. We particularly want to show governments and others that collecting this data in a granular and useful way is really not that difficult. We also believe it can become a resource that honest, transparent companies can use to self-declare beneficial ownership.
But why is OpenCorporates’ doing it? That’s easy. There are three reasons:
1. Somebody has to do it
There’s always a hesitancy to go first, because making those first—inevitably somewhat wrong—attempts can be painful. But doing so is critical, and doing so in public to get feedback (and help) from the wider community even more so. OpenCorporates is built on the idea of just getting on with it, and it seemed important to us that someone take the first step. But because it’s open source, anybody who’s interested in making progress in this area can contribute too, and help to guide the project.
2. It’s about who controls companies
‘Beneficial ownership’ is just jargon for who controls or benefits from companies, which, remember, are just legal constructs created by states. So, in order to say that Person A controls Company X, we need a list of known companies –which means connecting to or building on top of OpenCorporates— currently listing over 80 million companies in more than 100 jurisdictions—or trying duplicating the years of work that’s gone into it.
In many of the most interesting cases, the chains of control can be long and complex (e.g.,, person A controls company X through nominee agreements and multiple intermediate companies). Its very important to understand the issues around this. We think that the ground-breaking work on corporate networks that OpenCorporates has done is an essential foundation for this (thanks to the Alfred P Sloan Foundation for funding that work), and with possibly the most sophisticated relationship model in the world, we think we’re best placed to lead this work.
3. It needs to link to other corporate open data
OpenCorporates has fought tirelessly for corporate transparency, and was a significant player in the campaign to publish the beneficial ownership register in the UK (though Global Witness should rightly take most of the credit). In addition, this register, scheduled for release in 2016, is going to be transformative in the fight against money laundering, fraud and other criminal activity. But much of this will only be revealed when the beneficial ownership data is combined with other datasets, including government procurement, licences, environmental citations, and other public data.
OpenCorporates has been working on this aspect of “Follow the Money” for many years. We started FlashHacks, a series of events that spur community scraping projects to help ensure that ultimately not just every company information is freely available for all OpenCorporates but also every piece of company-related public data, to give a full reflection of each company and its interactions with the public world.
Of course this is a huge project and there are many more questions. Questions such as:
Who’s paid you to do this?
Nobody. We haven’t received any grants funding for WhoControlsIt, although Global Witness kindly offered to pay for the food at this week’s hack day in Berlin, and Transparency International provided the space. We have self-funded all the other costs, from staff costs to hosting (even flights and hotel for one of the hackers at the hack day).We do this because more than anything else, our reason for existence is improving corporate transparency for the public interest.
Ultimately this will require more money than we can provide, but we think it will be self-sustainable in the long-run and with seed funding we’re confident about growing this quickly.
What’s the governance model?
Honestly? There isn’t one yet – except the natural oversight that comes by doing this in public and open source. But one will definitely need to be developed, and is an area we will need help with, in the form of input as well as funding. If you’re interested in this area, do drop us a line at: community at opencorporates dot com.
What are the next steps?
There is increasing momentum behind creating a global register of beneficial ownership, one that is open for all to see, use and contribute to. We are hosting today’s hack day to work on the code that is the backbone of Who Controls It. As it is an open source and open data project, we have invited talented coders and professionals who care about this. So far, we’ve only spent a couple of days on Who Controls It so far, and already one can see how much the platform can do. Who Controls It also helps governments thinking about opening up that there’s potentially a better way.
Who Controls It is very much still at an early stage, but it is rapidly moving from the conceptual toward something that has power to permanently alter this debate.