Mossack Fonseca Clients Awake To Find Themselves Adrift Offshore In A Leaky Boat

Today the executives of Panamanian-headquartered international legal and trust services firm Mossack Fonseca awoke to news that 11 million confidential documents spanning 40 years of the firms operation had been leaked to 107 media organisations in 78 countries. The documents purport to show how Mossack Fonseca has helped clients launder money, dodge sanctions and evade tax. Neither the identity of the leaker, nor the source material of documents itself have been publicly revealed. Instead, the source and his or her precise motivations remain secret, and we can expect a drip-feed of stories and revelations over the coming weeks and months as media organisations seek to maximise their commercial return from the 9-months of work we understand this investigation to have taken.

Putting to one side the moral and ethical arguments for and against the use of offshore tax havens, what do the Panama Papers tell us about the state of Information Security at Mossack Fonseca?

Back in 2010, we wrote about the US State Department leak of over a quarter of a million sensitive and secret cables spanning 35 years. We detailed ways in which an organisation, any organisation, can reduce the likelihood of sensitive confidential files (including personal and private information of its clients) escaping into the public domain. We described a framework that any organisation can use to reduce the likelihood of a catastrophic leak of company secret information. That article is here.

Let’s examine this latest leak, and consider whether or not Mossack Fonseca could have learned something from the events of 2010. We will take each consideration in our framework in-turn.

Recognise Where You Are Vulnerable
Given how little we know about who provided the confidential information and their motivations, it's hard to make many assumptions about whether or not the firm knew it was vulnerable to this particular person or the methods they may have used to steal information. The leak may have come from an insider, a longstanding employee, perhaps even a senior executive, he or she may have been acting alone or with help, and may even have been coerced into exfiltrating the documents by an as-yet unknown 3rd party. However given what little we do know it seems unlikely that the board of directors at Mossack Fonseca truly understood quite how vulnerable they were to such a leak. If they did then they would have done something about it.  According to public sources, the company has between 200 and 500 staff around the world, and 20 former members of staff. It is a relatively small firm where Information Security should have been a tractable problem. When considering your vulnerability to a leak, think about the following:

• Where is confidential information kept in your organisation?
• In how many different places can it currently be found?
• Are multiple copies routinely created of confidential information?
• How many different access methods are there to this information?
• What size community of users have access to it?
• What controls are there over who can access what, where, and when?

Know If You Are A Target
The company must have known it was a target, their entire industry relies on confidentiality and secrecy. With current and former politicians, powerful businessmen and celebrities as clients, that much should have been obvious. Political enemies, nation states, criminals, and blackmailers would all have liked to get their hands on their information. Mossack Fonseca should have been devoting significant effort to its Information Security programs.

"Some organisations attract leaks because they are repositories for particular confidential information, or because the information they hold is highly newsworthy, others find themselves subject to leaks because their employees sometimes struggle with difficult and conflicting concerns about the nature of their work. While your newsworthiness may fluctuate over time, certain sectors tend to experience a perennial popularity with leakers. If you are in the energy, pharmaceutical, government, or banking sectors, you should consider yourself a prime candidate for leakers at this time. Companies engaged in arms manufacture or doing any kind of business in troubled parts of the world are likewise a target. Are you an aggregator of sensitive information from several of the sources above? If you operate a law or consultancy firm, or other business where you are entrusted with sensitive information from clients in these industries or geographies, then you will be a target for leaks."

Diligence & Statutory Obligations (Compliance)
While offshore locations are often preferred because they are relatively light on controls and heavy on individual privacy protection, increasingly they are having compliance obligations forced upon them. Whether or not this leak lands Mossack Fonseca in violation of compliance will be academic if their clients desert them as a result of it.

Segment Your Data
Given that the information leaked covers such a long period of time (many decades) and appears to include files on a diverse range of clients from statesmen to self-help gurus, it appears that nobody at Mossack Fonseca was segmenting their data. It is as-if there was one huge shared drive, one Email system, and the whole lot was dumped out. Segmenting data helps to contain information security failures, losing one class of systems or documents does not expose the whole.

• Segment by status: active client versus inactive/former clients.
• Segment by “security level” of the information: secret, confidential, unclassified.
• Segment by time: don’t keep files for completed projects with open client files.
• Segment by user/group: litigation versus patent, analysts versus sales.

Although it can reduce staff productivity and increase cognitive load, encryption can be used to reinforce the segmentation process. Did Mossack Fonseca individually encrypt the most sensitive documents or indeed any document in their organisation? It seems unlikely. Encryption of individual documents, or individual client folders is another way of limiting widespread uncontrolled disclosure of confidential information. It is not difficult to imagine a regime of individual passwords for individual projects, clients, or business units.

The Human Element, Maturity & Common Sense

We may never learn who is behind the leak, or hear first hand exactly what motivated them. We may never know if they are a current or former employee, a state-level actor, or just a particularly thorough and successful activist. We don't know anything about the firm’s culture or leadership at this point. All these things make it hard to comment on whether or not there is anything the firm could have done to avert this situation. In most instances where a company has lost control of its confidential information, there are things that could have been done with respect to the human element, to significantly reduce the chance of such a disastrous disclosure.  Staff vetting, the establishment of an ethics committee, monitoring, and a strong internal audit function can all help reduce the likelihood of such a large and damaging loss of confidential information.

Handling A Leak
The story is only just beginning for Mossack Fonseca and their clients, thus far we haven't seen a response from them either publicly or have any idea what they are doing internally.  What is clear already though is that this story is far from over and that there will be a continuous drip-drip of disclosures over the next few weeks and months. It is interesting that rather than making the entire document archive available online, the media organisations involved are choosing to be very selective about who and what they choose to write about.

What Next?

As Information Security professionals we have probably learned as much as we can from this disclosure. We expect the majority of the disclosures to be politically-motivated in nature, with a focus on Russia, Syria, Zimbabwe, North Korea, and any of those “twitter revolution” countries that haven't quite come around to the wests way of thinking. We expect disclosures about leaders of EU member states with politicians whose views differ significantly to those of Germany and the US, such as the Visegrad group (Czech Republic, Hungary, Poland and Slovakia), and a sprinkling of celebrities, nobility, and more minor politicians or from countries that don't really matter very much. We expect the disclosures to almost entirely avoid large western corporations and the interests of those who own and operate them, which is interesting given that group probably makes up the majority of Mossack Fonseca’s clients.

360is are able to assist in improving your organisation’s Information Security posture, and in implementing the advice given in this article. While it may be impossible to guarantee that your confidential information will stay that way, you can significantly reduce the chances of the kind of widespread leak experienced by the Mossack Fonseca today, or the US State Department in December 2010. To speak to one of our consultants, visit our contact page and request a meeting.