Posted By Thomas E. Ricks Share

Here's an interesting file from our pirates watcher on the connections between piracy and campaign finance, and also how complicated ransom money has become.

By Cdr. Herb Carmen, U.S. Navy
Best Defense
piracy columnist

The Chief of Naval Operations' Foreword in the "U.S. Navy's Vision for Confronting Irregular Challenges" states, "Our Navy has a history of confronting irregular challenges at sea, in the littorals, and on shore." After reading the latest U.N. report on Somalia, it sounds like the security situation in Somalia is a prime example of the irregular challenges navies face.

On March 10th, the United Nations Security Council Committee pursuant to resolutions 751 (1992) and 1907 (2009) concerning Somalia and Eritrea released a report from the Monitoring Group on Somalia. The Monitoring Group, headed by Matt Bryden, describes a stagnant conflict of hybrid warfare and a weak Transitional Federal Government that continues to struggle with a complex security situation. This persistent low intensity conflict creates the space to enable illegal arms trade and a corrupt war economy. 

The report states that pirate leaders have contributed to political campaigns of Somali candidates for office and that senior officials have secured the release of pirates detained in counter-piracy operations. It also reports, in great detail, widespread immigration fraud where ministers, diplomats, members of parliament and "brokers" have sold visas for $10,000 to $15,000 each -- splitting the profits among them -- and that such fraud has enabled pirate militias and members of Al Shabaab and Hizbul Islam to gain entry into western nations.

The report downplays the role of illegal fishing as a driver in the industry of piracy in the region, noting that in 2009 only 6.5% of attacks were against fishing vessels. While fishing vessels would present an easier target for pirates than larger merchant vessels with higher freeboard, fishing vessels do not generate the same high ransoms that have been realized through hijacking merchant vessels. This supports a point that I brought up in an earlier post.

Several key pirate leaders are mentioned in the U.N.'s report. Somalia's "Father of Piracy," Mohamed Hassan Abdi "Afweyne" and his son Abdiqaadir have been involved in hijacking at least seven vessels in 2009. Afweyne reportedly visited Libya last September to gain support for piracy and was on Moammar Khadafy's guest list as Khadafy celebrated 40 years in power. Afweyne's business dealings are said to be spread around several Indian Ocean rim nations and this network may could a significant role in hostage negotiations. Abshir Abdillahi "Boyah," from Puntland, claims to lead some 500 pirates and is said to have received multimillion dollar ransom payments. Boyah also claims that Puntland leaders are complicit and receive 30% of the ransoms. Mohamed Abdi Garaad is another well known pirate, reported leading some 800 pirates, and his responsible for the attack on the U.S.-flagged Maersk Alabama in April 2009.

One of the most interesting pages of the report is found way back in Annex III. "The Piracy Business Model" describes a system that guarantees every participating pirate a defined share of the ransom money. It is sophisticated enough that it includes "A" shares and "B" shares similar to preferred and common shares in legitimate publicly traded companies around the globe. Just like with preferred stock, there is a premium for entering the game. Piracy "A" shares are earned by bringing weapons and being the first pirate to board a ship during attack. The lower-level militiamen that fill the roster each earn a "B" share. Once a ship is hijacked and brought to port, it's time to balance the books by paying suppliers, investors, local elders for anchoring rights, and "B" shareholders. The remaining funds are split among the "A" shares and distributed accordingly to the "A" shareholders.

When it comes to Somali piracy, we're not dealing with a few thugs bobbing around the Indian ocean in a John Boat. This is a hybrid, population-centric fight against a network.

Adirashid ABDULLE ABIKAR/AFP/Getty Images

EXPLORE:AFRICA, PIRATES, SOMALIA
 

ANON_ANON

3:12 PM ET

March 22, 2010

Peter Leeson

Why should we expect pirates not to act like capitalists like everyone else?

 

PIRATES

3:26 PM ET

March 22, 2010

Invisible Hook

I'm reading it now, Peter. And I'm really enjoying it. - Herb

 

ANON_ANON

6:41 PM ET

March 22, 2010

I'm not

Peter Leeson, FYI.

 

BILL KELLER

5:44 PM ET

March 22, 2010

 

MKESS9

5:46 PM ET

March 22, 2010

an instrument of national interest

Navies do not exist to combat piracy. They exist, as a national asset, to do their nation’s bidding. If this course leads them to confront irregular challenges at sea, then so be it. The suggested nexus between irregular threats that navies historically have confronted and Somali based piracy today wants for a narrative of political and economic background that, frankly, does not exist. The noteworthy work of CDR Carmen and Best Defense to explain the roots of Somali based piracy and applaud actions taken by a various of entities to combat it should in no way be confused with research that suggests that Somali piracy is of the level of national interest that would compel a response above the dedicated efforts which NAVCENT and other agencies are currently engaged.

When the USN took to the Mediterranean to combat piracy against the Barbary States, it was because these actions were in line with national interests. Ways (combat piracy through naval action) and means (the procurement of the first frigates) were aligned the ends (unhampered trade in the Mediterranean). They do it out of self-interest; economic self-interest, typically, in matters of piracy (JPWREL pointed out in the last piracy post that 20% of the federal budget was going to Barbary tribute in the early 19th century).

So, while the dialogue about the causes and effects of piracy is enlightening and very useful, a national interest must be demonstrated before suggesting that current counter-piracy measures should be augmented. According to the September 2009 CRS report, “Piracy off the Horn of Africa,” it is pretty hard to quantify the actual threat that piracy poses.

According to the report, there is an infintesimal economic impact felt by the U.S. consumer. As insurance rates rise (which they actually have not for US flagged vessels), many of the costs are borne by the commercial entities, which then pass them off to consumers. However, these effects are orders of magnitude short of having any real impact on the global or U.S. economy, even given the taxpayer dollars spent on aid and naval operations to combat piracy. As the CRS report shows, the economic impact – to the U.S. or any part of the global system – is in no way significant, and is dwarfed by the historical cases that the CNO implicity refers to in the Navy IW Vision.

Admittedly, piracy is actually revealing some disturbing trends. The CRS report talks about the regional security implications surrounding Egypt, whose state revenue is dependent on Suez traffic. Most disturbing in my mind, is the potential connection between trans-national terrorism and piracy. As the insurance companies pay these $500k to $2million ransoms, it makes Somalia more difficult to govern, and therefore more hospitable to terrorists on the run, and more corrput and dificult to govern as CDR Carmen points out with the UN report. Here, with access to Western nations at stake, may be where a national interest might lie. However, I find it hard to believe that other means short of counter-piracy could and would not be used to prevent TFG Somalia from issuing visas to potential terrorits. At some point, all these trends may shift our policy makers’ decision calculus towards a more comprehensive solution. Maybe the administration is already considering this, but I have not seen anything open source to date that would suggest they should. For the foreseeable future, despite our history of confronting irregular challenges at sea, our response ought to remain status quo: measured, multi-dimensional, and aimed at the root of the political and economic problems while mitigating the effects of the symptom. Piracy, as correctly identified by the UN report, is merely a symptom, and as such warrants the necessary ends/ways/means match. No more. No less.

The CRS report mentioned can be found here: http://www.fas.org/sgp/crs/row/R40528.pdf Sorry I didn’t embed the link – I am new to blogging.

LT Mike Kessler, USN

 

PIRATES

6:53 PM ET

March 22, 2010

Thanks, Mike

Great comment.

 

RUBBER DUCKY

9:41 PM ET

March 22, 2010

Great solution

The United States Navy has the capabilities needed to counter piracy anywhere in the world. Should piracy ever become a national problem, we're all set.

In the meantime, in the context of national interests, the issue has zero salience: piracy is not a US problem and we should quit proposing solutions (Tom?).

 

TYRTAIOS

10:40 PM ET

March 22, 2010

Jumping-out of airplanes & Pirates

A few comments: I can see the good Commander has a thing about the perception by many that piracy is driven by the illegal fishing off Somalia. Granted, it generally isn't anymore. Though perception can be reality within those traditonal clans associated with it.

However, it originally precipitated it, until it escalated beyond tribute, and was seen as too lucrative of a business to leave in the hands of fishermen. Don't forget that when Jolly (Jaalie) Siad Barre was deposed and the country fell into chaos, the international community turned a blind eye to the poaching going on off shore - cause and effect!

In addition, the 2004 tsunami also hit the coastal areas of Somalia hard and many traditional fishermen lost their boats, gear and livelihood as a result. and drove many young men into the arms of these newer "networks."

Incidentally, the U.S. early-on found if we paid men some extra money they'd jump out of a perfectly good airplane - why would paying more to the first young Somali to board a merchant vessel seem out of the norm?

 

IRONCAPT

12:36 PM ET

March 23, 2010

2nd Order Effects...

There is an interesting article in this month's Atlantic on how the world recession, low oil prices, and piracy have reduced traffic through the Suez.. This has hurt both Egypt's economy and national pride.

Some other analysts have pointed out how piracy attacks have been hurt more by the weather than the Nato task force. I'm wondering what is going to happen when the economy recovers, oil prices go back up, and taking the long way around Africa is no longer as ecnomically feasible. Someone with better math skills than I, might want to crunch the numbers on that.

LT Kessler makes some good points about this not rising to the level of national interest, but then again, LTs and Capts don't get to make calls about what it and isn't in our national interest. I'm reminded of the General who made the speech in 2000 about not knowing where we were going next but "we are definitely not going to Afghanistan."

 

TYRTAIOS

1:54 PM ET

March 23, 2010

More than likely

More than likely the drop in revenue from traffic through the Suez, which ranks third behind tourism and remittances sent back home by Egyptians abroad, is due more to shippers avoiding the tolls by not using the Canal on the return trip - "it's the economy IRONCAPT." And though it dropped, it probably grew, but by less than some would have liked to have seen it grow.

Anecdotal comment: shippers just don't pull in and pass through. They meet a time table and move through in convoys formed up, never going over three convoys a day. If a ship misses the time table - they wait either at the northern area or the southern (no locks).

I once counted traffic as a favor for an American attache. : )

 

MKESS9

8:01 PM ET

March 23, 2010

Re: 2nd order effects

By highlighting that the credible research convened on Somali piracy compels a measured, multi-dimensional response along the lines of current Navy and interagency efforts, the point was to refute claims that simply because counter-piracy is a historical mission set, the Navy ought to augment its current efforts off the HOA. Historical case studies for the employment of force are only as valid as the underlying political context that links the historical case to the present. In no way was I suggesting that the Navy “doesn’t do piracy,” or is "definitely not going to HOA." In the case of Somali piracy, given the analysis at hand, it’s easy to see why our civilian leadership does not believe more robust efforts are needed. If and when the decision calculus changes, the Navy will fight piracy – or execute any mission - where and when the civilian leadership determines it is needed.

 

Thomas E. Ricks covered the U.S. military for the Washington Post from 2000 through 2008.

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