April 24, 2009

The Somalian Pirates Successful Business Model

In our continuing series of posts about the Somalian pirates we are pleased to present an interview with a former FBI agent (Jack Cloonan) who specializes in negotiating with pirates.

In it he discusses the hierarchy, intelligence of the pirates and how they communicate.

Here are a few excerpts for your review.
SPIEGEL: How does the money get delivered to the pirates? For example, are speedboats used?

Jack Cloonan: Delivering money is an extremely difficult part of the negotiation process because once you strike a deal, you do have to deliver the ransom. We used to rent tugboats in Mombasa. But the tugboat captains -- some of whom have delivered ransoms repeatedly -- have actually charged more for the delivery of the ransom than the actual ransom amount. What we do is, we cruise to a certain agreed-upon location with coordinates, you get within sight, the delivery is made from a bagman to the bad guys and then you hope that the pirates do the right thing. They generally do.

SPIEGEL: From your experience with the Somali pirates, are they intelligent people? Or are they simply thugs?

Cloonan: They're not stupid. They know that they've got a life -- they can leverage that. They know that it's a successful business model. They know that they can operate in this wide swath of area almost with impunity and they can pick and choose. And they're developing better strategies. They're going further out from the coast because they know the ships have been advised by the International Maritime Bureau to stay a minimum of 200 nautical miles offshore. If ships come in within say 50 or 100 miles, they're easily stopped.

And they are effective -- for example, when they call family members to induce stress. I think shooting off a gun during a telephone call and saying you just killed someone is pretty effective. I think moving ships and threatening to beach them is effective. The fact that they anchor the ships within sight of each other is very intelligent. Some are better than others.

SPIEGEL: In terms of the sociology of the pirates, do you have a sense of their hierarchy or of their structures?

Cloonan: Oftentimes when we've been engaged you'll see that there's a commander who's in charge once they get on board. And that situation can be very fluid. You might be dealing with Ahmed one day, maybe for two days, and then he gets frustrated and you get somebody else that comes on. As these things go on -- and they can typically last a month or more -- you'll have several representatives from the pirates but then at some point where you're really getting close and you're getting frustrated and they're getting frustrated, invariably the decision-maker comes forward. I equate it to buying a car in the United States. You're dealing with somebody and negotiating and then finally he just throws his hands up and says: "All right, I've got to go talk to my manager." And then they come back in and make a deal.

Our experience with the pirates suggests to us that there is an organizational structure. So if we're not making progress with somebody on board during the negotiations, then we ask for the right person, the decision-maker. He could be on land, he could be on board.

If you read the whole interview you'll see that Cloonan addresses the question of the best way to try and prevent these incidents. His suggestions include taking a different route and escorts for the ships.

I'll avoid snarky comments about that and suggest that non lethal measures may not be the most effective tool for dealing with these criminals. But then again, I am just a guy writing this from the comfort of my keyboard, so what do I know.

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