Look before you leak

I bet you thought people banked in the Cayman Islands because they serve fruity cocktails with tiny parasols in them while you're waiting for your checks to clear. Well, you're only partly right. The other reason people keep accounts in the Caymans is to avoid paying taxes and/or to launder their ill-gotten gains. For many of us this is not news -- or at least it wouldn't be, if not for the brain-dead actions of

I bet you thought people banked in the Cayman Islands because they serve fruity cocktails with tiny parasols in them while you're waiting for your checks to clear. Well, you're only partly right. The other reason people keep accounts in the Caymans is to avoid paying taxes and/or to launder their ill-gotten gains.

For many of us this is not news -- or at least it wouldn't be, if not for the brain-dead actions of one such bank and the magistrate they duped into being their monkey.

Swiss Bank Julius Baer used its legal muscle to convince a U.S. judge to close down the WikiLeaks.org domain, because the site contains documents that allegedly show Baer is exchanging its clients' dirty old dineros for fresh clean ones with just a hint of mint.

Some background: WikiLeaks.org exists so anonymous whistle blowers around the globe can document human rights offenses, corporate malfeasance, nuclear accidents, and the like. The world gets to see what nasty things those in power have been up to, while the leakers get to live their lives without being waterboarded (or worse).

Because WikiLeaks operates anonymously across several jurisdictions, Julius Baer couldn't figure out how to sue the site directly for copyright infringement. So last Friday the bank found a friendly judge, who ordered the site's California hosting company (Dynadot) to turn off the WikiLeaks.org domain. According to Wired News, WikiLeaks was only notified of the hearing by e-mail a few hours before it was scheduled to happen, and didn't have time to muster its squad of pro bono attorneys.

Personally, I don't think Baer was overly concerned the world would know its Cayman branch (allegedly) exists to launder money and avoid taxes. I think the bank didn't want its rich, extremely powerful, allegedly money laundering/tax evading clientele to be exposed. Bad for business, you know.

But the bank's solution is so mind-bogglingly stupid, you have to wonder if these guys need help getting their pants on each morning.

First, this is exactly the kind of story bloggers and Net-centric journos crave. Big nasty corporation stomps all over plucky public-serving underdog. Who can resist that plot line?

Second, the equation Bank Julius Baer = Money Laundering is now firmly cemented in the minds of everyone who has encountered this story, regardless of whether it's true.

Trois: The documents in question, which might have been quickly forgotten alongside the 1.2 million others on the site, are now hotter than the Paris Hilton sex video. Dozens of mirror sites have sprung up, and Cryptome.org and PirateBay have squirreled away copies of the docs for any interested parties.

Oh, and by the way, the judge's order failed to shut down the site. The IP numbers (88.80.13.160) still work, as do its Belgian and Christmas Island domains. Or they would, only last time I checked the sites were overwhelmed with traffic from people with a sudden keen interest in Cayman Islands banking.

It's a fascinating study in how the courts and high-powered corporations still manage to shoot themselves in the feet when they try to manipulate the Net. (Remember: The Internet is not a dump truck, it's a series of tubes.) But it's also an illustration of why things like NSA wiretaps and efforts to throttle network traffic must be opposed.

Tap the Net backbone, and you make it much harder to post documents to places like WikiLeaks anonymously. (If you think those taps will only be used to identify terrorists, you're living in a fantasy world.) Suddenly the planet becomes a lot more dangerous for whistle blowers.

But this story also touches on both telecom immunity and Net neutrality. Say you're an AT&T employee who wants to post evidence revealing how the company deployed illegal wire taps. What's to keep your friendly telecom provider from killing those bits before they ever reach their destination? This is the kind of thing that will happen when ISPs are asked to become traffic cops, as the recording and movie industries have proposed.

As crypto-wonk Bruce Schneier has eloquently stated, this ain't about security, it's about control. Corporations and governments have an insatiable appetite for it. But I think we're all better off when they go hungry.

Would you leak your docs if you thought the NSA was listening? Spout off below or e-mail me here. Top tipsters qualify for cool swag and, yes, I will keep your identities confidential.

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