Monday, August 23, 2010

The Progressive left doesn't abide by the rules they set for you. Will Nancy Pelosi investigate?

How WikiLeaks Keeps Its Funding Secret


The controversial website WikiLeaks, which argues the cause of openness in leaking classified or confidential documents, has set up an elaborate global financial network to protect a big secret of its own—its funding.

Some governments and corporations angered by the site's publications have already sued WikiLeaks or blocked access to it, and the group fears that its money and infrastructure could be targeted further, founder Julian Assange said in an interview in London shortly after publishing 76,000 classified U.S. documents about the war in Afghanistan in July. The move sparked international controversy and put WikiLeaks in the spotlight.

In response, the site has established a complex system for collecting and disbursing its donations to obscure their origin and use, Mr. Assange said. Anchoring the system is a foundation in Germany established in memory of a computer hacker who died in 2001.

WikiLeaks's financial stability has waxed and waned during its short history. The site shut down briefly late last year, citing a lack of funds, but Mr. Assange said the group has raised about $1 million since the start of 2010.

WikiLeaks's lack of financial transparency stands in contrast to the total transparency it seeks from governments and corporations.

"It's very hard work to run an organization, let alone one that's constantly being spied upon and sued," Mr. Assange said in the interview. "Judicial decisions can have an effect on an organization's operation. … We can't have our cash flow constrained entirely," he said.

Associated Press

WikiLeaks founder Assange in Stockholm Aug. 14 said the site would publish more Afghan war documents.

Among the cases WikiLeaks has faced, the Swiss bank Julius Baer & Co. in 2008 sued for damages in federal court in California, alleging that the site had published stolen bank documents. The court ordered the disabling of the domain name, but the bank withdrew its lawsuit after civil-rights advocates protested.

Though Mr. Assange declined to name donors or certain companies through which donations flow, he provided some insight into the funding structure that allows the group to operate.

The linchpin of WikiLeaks's financial network is Germany's Wau Holland Foundation. WikiLeaks encourages donors to contribute to its account at the foundation, which under German law can't publicly disclose the names of donors. Because the foundation "is not an operational concern, it can't be sued for doing anything. So the donors' money is protected, in other words, from lawsuits," Mr. Assange said.

The German foundation is only one piece of the WikiLeaks network.

"We're registered as a library in Australia, we're registered as a foundation in France, we're registered as a newspaper in Sweden," Mr. Assange said. WikiLeaks has two tax-exempt charitable organizations in the U.S., known as 501C3s, that "act as a front" for the website, he said. He declined to give their names, saying they could "lose some of their grant money because of political sensitivities."

Mr. Assange said WikiLeaks gets about half its money from modest donations processed by its website, and the other half from "personal contacts," including "people with some millions who approach us and say 'I'll give you 60,000 or 10,000,' " he said, without specifying a currency.

Retrieving money from the Wau Holland Foundation is a complicated task, he said. WikiLeaks must submit receipts to the foundation, which issues grants to reimburse them. Because German law requires the foundation to publicly disclose its expenditures, WikiLeaks uses "other foundations" to aggregate its bills and send them to Wau Holland, so that some of the companies WikiLeaks does business with remain anonymous, Mr. Assange said. This prevents anyone from seeing whom, for example, WikiLeaks pays for Internet infrastructure, or where that infrastructure is located.

Money Maze

Some of the ways WikiLeaks seeks to protect its funding by shrouding donors and payments in secrecy

  • WikiLeaks encourages donors to contribute to its account at Germany's Wau Holland Foundation, which by law can't publicly disclose donors' names.
  • WikiLeaks controls units all over the globe. It is registered as a library in Australia, as a foundation in France, and as a newspaper in Sweden, founder Julian Assange says.
  • WikiLeaks has two taxexempt charitable organizations in the U.S., known as 501c3s, that 'act as a front' for the website, Mr. Assange says.
  • The site uses 'other foundations' to aggregate its bills and send them to Germany's Wau Holland so companies WikiLeaks does business with remain anonymous, Mr. Assange says.

Source: WSJ research

To operate, the website needs several powerful computers linked to high-speed Internet connections. WikiLeaks particularly tries to obscure payments for "basic infrastructure that could be attacked," for "servers that are engaged in source protection," and for "security engineers," Mr. Assange said.

So far, Wau Holland has distributed €50,000 ($64,000) to a WikiLeaks account in Germany, strictly in exchange for receipts, according to Daniel Schmitt, spokesman at WikiLeaks, and Hendrik Fulda, deputy board chairman of the foundation. Mr. Schmitt controls the account.

The average donation to WikiLeaks via the Wau Holland Foundation is about €20, Mr. Fulda said. The largest donation through the foundation—€10,000—arrived from a German donor after the publication of the Afghan war documents, he said, declining to reveal further details.

Paying salaries is a "sensitive subject," he said, noting that outsiders might question the need for them.Mr. Schmitt said WikiLeaks needs about $200,000 a year to cover its operating expenses—mainly network fees, rent and storage costs for the sites where the servers are, and some hardware and travel expenses. Should it decide to pay salaries to its five staff members, as it is now considering, it would need about €600,000 a year, he said.

Mr. Fulda of the foundation said WikiLeaks needs €10,000 to €15,000 a month to maintain its Web presence. Late last year, when donors were contributing only €2,000 to €3,000 per month, WikiLeaks was struggling to survive, he said. So it shut down its website in December, leaving up only an appeal for donors to transfer money to the group via the Wau Holland Foundation. Soon, donations per month increased 20-fold.

WikiLeaks reopened its website in May, but "within days … donations dropped back to near their former level," Mr. Fulda said.

The fluctuation caught the attention of Wau Holland's banking partners including eBayInc.'s PayPal, which demanded explanations for the surge and fall in donations. "I explained it wasn't money laundering, just WikiLeaks donations," Mr. Fulda said.

A PayPal spokeswoman said the company is "still processing payments for WikiLeaks." She said that she couldn't comment further on a specific account but that in general, PayPal is required by anti-money-laundering laws and its own anti-fraud regulations to investigate accounts when they exceed certain limits.

WikiLeaks has tried to diversify away from PayPal by adding other payment options to its site, including, a payment system based in Sweden, and Moneybookers, a system based in the U.K.

A spokeswoman for Moneybookers said the company used to provide services to WikiLeaks but "as they don't adhere to Moneybookers' standards, the agreement was terminated." She declined to comment further. said it was "really proud and happy to help" Wikileaks. "We think their work is exactly what is needed and if we can help just a little bit, we will," said Peter Sunde Kolmisoppi, founder of

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