Somali middleman describes how pirate ransoms are negotiated

Middlemen negotiate pirate ransoms

NAIROBI, Kenya — It’s a job few people can list on their resume: pirate middleman.

A Somali who used to import soft drinks and didn’t go beyond the seventh grade says he’s made hundreds of thousands of dollars brokering deals to free ships and their valuable cargos after pirates attack.

The 32-year-old Somali, who would be identified only by his alias, Abdi Sheik, says he helped gain the release earlier this year of a supertanker carrying an estimated $150 million of crude oil. He claims to have successfully negotiated the release of an arms-laden Ukrainian ship and the 20 sailors onboard.

In an interview with The Associated Press, he tried to justify his role, downplaying that he was dealing with criminals and that his own actions may be dubious.

“I’m just helping poor sailors caught up in a tag-of-war between greedy pirates and selfish ship owners,” Sheik insisted. “I don’t think I’m a criminal because I’m not part of the doers nor part of the receivers.”

Sheik allowed himself to be identified by only an alias for fear of reprisals or possible pursuit by Interpol. Details of his accounts of being a middleman could not be entirely verified, but Sheik has previously provided AP with reliable inside information about hijacked ships and a business associate confirmed his involvement in ransom negotiations.

Piracy is big business in Somalia, which has not had a functioning government since 1991. Somali pirates have collected far more than $100 million in the last several years. The International Maritime Bureau says sea attacks worldwide surged 39 percent in 2009 to 406 cases, the highest in six years.

Sheik, who hails from northeastern Somalia where the pirates are based, refused to specify how much he’s made as a middleman but indicated it is in the hundreds of thousands of dollars.

He described meetings held inside dark SUVs in which trust was scarce. Multimillion-dollar ransoms are haggled over like carpets at a market, he said.

Sheik said he first got into the business when a casual acquaintance from his clan called to ask for his help in releasing a Ukrainian vessel and its 20 crew members who were hijacked in September 2008. The job grew from there and by December 2009 he was being asked to help free the Greek oil supertanker Maran Centaurus.

The pirates started off asking for $9 million that time. Sheik, who was acting as a go-between for the negotiating teams, said that after weeks of back-and-forth he suggested to the Greek ship owner’s negotiators that they try offering $4.5 million. Sheik said the pirates responded: “Add one more million and the deal is done.”

Nearly two weeks after that over-the-phone deal was sealed, planes dropped $5.5 million encased in floatable boxes. The supertanker was freed the next day.

Somali pirates receive about 30 percent of ransoms they receive — on average $1 million to $2 million per boat, according to a 2009 memo prepared by the staff of the U.S. House Armed Services Committee that was based on an interview with a captured pirate. Another 30 percent is spent bribing local officials, 20 percent goes to group bosses and the rest goes toward things like guns, ammunition, fuel, food and cigarettes.

Sheik says self-styled negotiators like him try to get involved once there’s been a report of a new hijacking, contacting a ship owner to say the vessel can be released for a daily negotiating fee. Middlemen typically are paid directly by the ship owners.

Analyst Roger Middleton of the London-based Chatham House said the average ransom has spiked— from $1 million two years ago to $2 million last year. Pirates are also believed to have netted as much as $7 million from one recently hijacked ship, he said.