Who's Funding the Pirates
Western intelligence has been tracking the flow of ransom money—and the trail leads to Dubai.
The Somali pirates who hijacked a Saudi tanker in the Indian Ocean this week will likely rake in their biggest ever ransom. The oil on the tanker, the largest ship ever taken, is more than a quarter of Saudi Arabia’s daily output, worth $100 million. But tracing that ransom payout may also begin to unravel the complex banking arrangements, originating in Dubai, that have allowed pirate groups to collect as much as $30 million this year.
The pirates are now holding nearly 150 hostages from at least nine vessels from Malaysia, Thailand, Japan, Germany, Nigeria, Iran, and Saudi Arabia. Just last week, a record four ships were seized in one 48-hour period, including a 26,000-ton Iranian cargo carrier.
They take a hefty cut before sending the pirates’ share through hawala, a cash-based Islamic banking system that leaves behind no written records.
Although most of the press focus is on the attacks themselves and the appalling failure of Western powers to stop the piracy, behind the scenes Western intelligence agencies have been trying to track the flow of ransom money.
Whistleblower has learned that a classified internal report at the US Treasury’s Financial Crimes Enforcement Network (FinCEN) has concluded that the pirates are funded by expatriate Somalis and Emiratis based in Dubai. This determination is based, in part, on an independent Interpol probe that managed to identify several moneymen behind the high sea piracy. All live in Dubai.
The businessmen backing the pirates arrange for the complex multibank transfer of ransom funds, disbursing the money through dozens of institutions around the globe within hours. They take a hefty cut before sending the pirates’ share through hawala, an underground cash-based Islamic banking system that leaves behind no written or electronic records that investigators can follow.
But FinCEN, which declined to comment publicly on this matter, has enough tracking information on the initial ransom payments to have recently made an unofficial request to the United Arab Emirates for assistance in cracking down on the financiers.
So far, the Emirates have demurred, saying they need more evidence before proceeding. Now that the piracy is affecting a large Muslim neighbor, Saudi Arabia, FinCEN officials believe the Emirates may be more inclined to move against its pirate bankers. Attempts to obtain a comment from the UAE Embassy were unsuccessful.
Gerald Posner is the award-winning author of 10 best-selling books of investigative nonfiction ranging from political assassinations, to Nazi war criminals, to 9/11, to terrorism ( www.posner.com). He also has written dozens of articles for national magazines and newspapers. He is a regular contributor to NBC, CNN, CBS, and MSNBC. Posner lives in Miami Beach with his wife, the author Tricia Posner.