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At Large
The Somali-Kenya Connection
Where does all the pirates’ ransom money go?
The insurance companies won’t tell you; the shipping companies won’t tell you; and, of course, the Somali pirates don’t say a word. What is not talked about is the amount of money being made by the Somali piracy entrepreneurs — and then what they do with it. One thing is clear: Kenya is a major factor.
If the exact figures involved in the piracy activity are not available, the count of hijacked vessels is more easily obtained. The International Maritime Bureau has reported that through the first nine months of this year 32 ships have been taken by the Somalis. Quoting the same sources, the New York Times last May reported that in the previous 18 months Somali pirates “have netted as much as $100 million by hijacking dozens of ships…”
The insurance companies and private ship owners easily can calculate what their vessel and cargo is worth. The kidnapped crews are priced relative to the political pressure of their families and governments on the victimized firms. Sources insisting on anonymity in the relevant insurance concerns suggested that depending on rank and nationality/ethnicity individual ransoms run from $1,000 to $100,000 (European captain level). The crew and cargo of November 2008’s Saudi super tanker hijacking were reportedly ransomed for $3 million last January. That figure was considered a bargain by the ship’s owners and its insurers.
Less important than actual profit figures of Somali piracy is what is done with the money. Anyone who has traveled to Kenya recently can get a rather good idea. In the better sections of Nairobi there are several high-rise office and residential complexes. According to local journalists, many of the newer buildings were financed for the most part by Somali investors. The profits from piracy would appear to be well handled.
This is not to say the community of Somalis in Kenya generally have not also benefited. The Eastleigh section of east Nairobi, heavily populated by Somalis, is booming as a result of a complicated web of private financial transfers that expedite sale and purchase of smuggled goods avoiding taxes. The Barclay’s Bank branch in Eastleigh is open seven days a week to provide full service. No other bank in Nairobi operates on this every day schedule.
Kenya has long been known for its weak prosecution of illegal money laundering. For that reason large amounts of cash from Somali sources find their way into real estate investment and commercial factoring. What was once a nice little business of small scale commercial financing by non-African Kenyans of Lebanese, Syrian, Greek, Indian and Pakistani background is now an activity dominated by internationally connected Somalis.
It is not surprising that local counter-terrorism officials see the tightly related Somali community in Kenya as the primary conduit for monies headed for Islamic jihadi groups. Unfortunately the job of penetrating these networks has been extremely difficult and electronic surveillance is inhibited by an extensive courier system.
There is a seeming natural political outreach in a situation where substantial sums of illegal funds proliferate — and Kenya is no exception. Kenyan politics has long been marked by political corruption. The Somali moneymen have found these activities to be particularly useful to their working interests. Multilateral trade operations combined with regional financial connections make a perfect cover for weapons commerce.
In the same manner as the trade in illicit military supplies, the covert transfer of monies for the maintenance of jihadi groups in the Middle East and elsewhere worldwide is facilitated through the Somali diaspora. The informal network of Islamic money transfer, the hawala, stretches globally and provides a trustworthy yet clandestine system of financial manipulation. Somali piracy is only one source of funding, though it has become a major supplier in recent years.
The Kenyan authorities are well aware of the growth of the independent economic system within the traditional Kenyan environment, but there is little that can be done about it. To a certain extent there are banking and commercial elements in this East African country that are just as happy that the Somali connection exists.
Kenya’s economy, no longer the envy of the region, has become reliant on the dynamics of its Somali immigrants and the money that pours in from their nefarious activities along the Horn of Africa. For Kenya the Somali phenomenon cannot be lived with — and yet at this stage Kenya does not seem to be able to live without it!
About the Author
George H. Wittman writes a weekly column on international affairs for The American Spectator online. He was the founding chairman of the National Institute for Public Policy.
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Richard Baker| 11.6.09 @ 7:06AM
Ah yes, the homeland of the Kenyan and his family. They must be so proud of their home country. Setting a fine example for the world. Should we be surprised that the White House has become the US distributor of this franchise?
hey| 11.23.09 @ 12:28PM
u r an ass hole pigy honky, probably sitting somewhere in a barn in alabama fat waiting for a civil war
Pingback| 11.6.09 @ 10:09AM
The American Spectator : The Somali-Kenya Connection | Kenya today links to this page. Here’s an excerpt:
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GEB| 11.6.09 @ 9:32PM
Where is the Raile Odinga connection?
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How Much Do You Pay For Car Insurance? | Personal Insurance links to this page. Here’s an excerpt:
madeleine7| 11.7.09 @ 9:45AM
What kind of "usurper-trash" with Kenyan criminal connections have we allowed to okupy the White House??
StargazerInSavannah| 11.8.09 @ 12:17AM
I had no idea that the Somali pirates had made nearly as much from their piracy activities as Al Gore has generated from the Global Warming / Climate Change.
Were it left to me, I would deal with the criminal activities of our climate change fraud before addressing the threat of the Somali pirates and the current presidents African relatives.
It appears that the Somali pirates are under the protective wing of PC correctness as are other terrorist, foreign and domestic.
Pingback| 11.10.09 @ 12:26AM
Crazy world this week « The African Accent links to this page. Here’s an excerpt:
adulahi sheekh hassan, | 11.23.09 @ 12:16PM
fu
ali abdi hasaan| 11.23.09 @ 12:24PM
as a somalia i held my head high, not becouse of the thinks this empty suit is accusing us of, but becouse of the hard work we put on kicking the out the indians,creeks and itilians who economically enslaved the kenyan people. we brought freedom of thought in the economically arena in kenya.
u racist pigot, short minded
Abdul Mohamed| 12.9.09 @ 2:31PM
Look what you are trying to say, The Barclay's Bank branch in Eastleigh is open seven days a week to provide full service. Do you mean that Barclay’s is involved illegal activity? No I don’t think so. The Bank is open because it has an Amazing CEO who is also Somalian. That sufficiently demonstrates how hard working somalian. What ever you say what you wish the truth will always prevail
Dorio| 1.15.10 @ 2:51AM
Were it left to me, I would deal with the criminal activities of our climate change fraud before addressing the threat of the Somali pirates and the current presidents African relatives. download edge of darkness | download when in rome
Randal | 2.16.10 @ 9:55AM
@dorio: i could not have said it better
Robert| 3.23.10 @ 3:15PM
Look what you are trying to say, The Barclay's Bank branch in Eastleigh is open seven days a week to provide full service. Do you mean that Barclay’s is involved illegal activity? No I don’t think so. download How To Train Your Dragon
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thanks| 5.8.10 @ 3:45AM
Kenya serves as "a major base" for Islamist groups battling Somalia's Transitional Federal Government, the United Nations says in a recent report that also details the Kenyan government's training of TFG forces -- in apparent violation of a UN embargo.
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Black Swan | 10.24.10 @ 3:49AM
This is certainly an interesting discussion. Political corruption is common in African countries... now Kenya is jumping on the band-wagon. What's gonna happen in the next 10 years?
Danny | 10.30.10 @ 3:07PM
Pirates and lawlessness abound in areas where the leaders are also pirates and lawless. Sometimes though, due to the long time the pirates have been operating, the richer they become that they control politicians and government. Making the government a legal entity to have jurisdiction over an area so that other countries cannot just enter the area without respect of sovereignty when in fact the sovereignty is just a tool to protect the pirates in the area.
Monroe Rigsby | 11.2.10 @ 4:43AM
This is a growing problem. People in poor countries will continue with the illegal activities to get rich. The problem will grow as the population in poor countries is growing.
sell my house quickly | 11.7.10 @ 6:04AM
A problem like this is quite a long way to be solved. Somalis will always depend on this kind of activity which is not good in the future. Then, what's next? It will induce bigger problems.
Andy Chuzley | 11.7.10 @ 2:59PM
Heard from the news recently, Thai Military Department asked to send specialized Naval troops to monitor for suspected pirate boats in Somalia gulf.
Free Job Advertisement Site | 11.22.10 @ 7:30AM
However, doing these illegal activities won't make a country rich, instead, the opposite. This is really a big problem.
houses for sale in portland | 3.29.11 @ 6:55PM
I agree. It's sad to see them repeating these same mistakes
Nerds Next Door | 4.3.11 @ 5:34PM
I just don't know with the size of the coast that they are really going to be able to solve this issue anytime soon. It's too bad really, some of this coast line is really, really beautiful.
carinsurance | 6.15.11 @ 7:20AM
to see them repeat the same mistakes.
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johncarcar | 7.28.11 @ 7:50AM
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Civil War Spies | 8.17.11 @ 1:22AM
It is one of the common situations not only in these countries but in some state all over the word as well. Some of the shippers are involved in smuggling which is illegal. However government is taking their steps to resolve this problem because it is a conflict on the economy of the state.
jane | 10.21.11 @ 2:44PM
Piracy is still alive and well, funneling funds for terrorist organizations! No new concept here! However, It is good to be aware and beware!
maria Sierra | 1.26.12 @ 2:16AM
While you have that mentality, will follow the same problems in poor countries ... great article
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Debt consolidation | 5.12.12 @ 8:47AM
One should be aware of the bad practices of the society and surely it must be avoided to prevent discrimination and other evil things from society.