by Jay Bahadur
As the negotiations drew to a close, the pirates started to plan their getaway. Two or three weeks before the ransom was delivered, the supply boats began to bring sets of new combat fatigues and matching boots, which the pirates subsequently used to disguise themselves as Puntland soldiers upon leaving the ship.8
By satellite phone, the Victoria’s owners had kept Captain Tinu and Mihai closely apprised of the status of the ongoing negotiations, and, as a result, the two knew a week in advance when the ransom was to be delivered. When the big day arrived, every leader, attacker, and holder in the pirate operation turned up on the Victoria, including, as Levenescu testified, Computer himself; Mihai counted a total of thirty-two individuals, including the gang’s accountant. They all waited with anticipation for a small eight-seater aircraft en route from Kenya, loaded from the vaults of a Nairobi bank.
When the plane was sighted, the crew was told to assemble on the main deck in plain view. Mihai observed that the plane was carrying “military men” (most likely private security forces), and guessed that a representative of the shipping company was also aboard. When, after two fly-bys, the plane’s occupants were satisfied that all crew members were alive and accounted for, they released a parachuting bundle containing the ransom money. So strong were the monsoon winds, said Mihai, that the pirates had to chase the package in one of their supply boats after it landed dozens of metres away.
Once retrieved, the ransom was brought on deck and meticulously divided according to a pre-arranged formula. “The accountant had a laptop,” said Mihai. “On it was an Excel table with the name of each pirate.” Of the $1.8 million ransom, “The man who threatened to kill us received $150,000,” Levenescu had told me earlier, almost certainly describing Mohamed Abdi, the head attacker. “The cook got $20,000.”
After five or six hours, twenty-two pirates had received and counted their money and departed for the shore, leaving ten on board to oversee the lengthy preparations to ready the main engine after its long period of disuse. Twenty-four hours later, at exactly quarter past five on the morning of July 18—the time was etched in Mihai’s memory—the last pirate left the deck of the Victoria.
* * *
For the Chief, the worst part of the experience was unquestionably the night on the bridge when he came closest to death. But he soon grew accustomed to living under the Damoclean sword of such threats. “At one point they sent the Germans an email,” he said. “It read: ‘If you don’t send us the money we’ll start randomly executing the crew, starting with the Captain.’ ”
I asked if he thought that the pirates would ever have carried out their threat.
“No,” he replied. “It was just a tactic to push the owners into paying.”
I pressed, “What makes you so sure?”
“Because if they had killed us, they wouldn’t have gotten any money,” came the matter-of-fact response.
Besides mass executions, the pirates also threatened to transport the crew onto land and scuttle the Victoria, a threat that Mihai did not view as credible. “I don’t believe they would have done it,” he said. “But who knows? They were unpredictable.”
And if the shipping company had refused to pay?
“They wouldn’t have let the ship go,” he said. “But they might have released us, maybe after five or six months. Maybe.”
As with Levenescu, Somalia was now on the Chief’s personal travel ban list, as I discovered when I asked if he would ever accept a berth on another vessel transiting through Somali waters.
“No!” he exclaimed, shaking his head and chuckling. “Maybe I’d run into the pirates again—they’d say, ‘Chief! You’re back! You must like it so much here!’ ” Once again, my translator and I found ourselves laughing aloud at his infectious levity. Going into these interviews, I had been nervous that I would encounter mute and traumatized wrecks; never would I have expected the Chief’s carefree attitude towards his experience.
The half-hour Mihai had originally promised us soon stretched into an hour and a half, leaving him over an hour late to pick up his wife. When his phone rang with her latest reminder, the Chief concluded that he had pushed his luck to the limit. Still chuckling, we got up and made our way out of the restaurant.
14
The Freakonomics of Piracy
MODERN SCIENCE MIGHT TAKE A SCEPTICAL VIEW OF COMPUTER’S psychic talents, but it is hard to argue with success, and his clairvoyant directions could not have been more effective in leading his pack to a helpless victim. Despite travelling in the Internationally Recommended Transit Corridor (IRTC) and being within 80 to 160 kilometres of a Turkish warship when she was attacked, the Victoria was captured with relative ease. What made her such an easy mark? It turns out that the vessel possessed several attributes that rendered her particularly vulnerable, listed in Table 2.
In short, the Victoria was slow, low, and undermanned. The disadvantage conferred by her lack of speed is evident: with a thirteen-to-twenty-knot edge, Mohamed Abdi’s team overtook the Victoria less than forty minutes after they were sighted. Once they reached her in advance of the Turkish attack helicopter, the difficult part was over. The pirates must have been delighted to find a freeboard of only two metres, close to the lowest possible for a ship that size. Finally, the Victoria’s small crew not only meant fewer variables to interfere with a smooth boarding (such as crew members blasting the attackers with high-powered hoses), but also fewer sets of eyes on deck watching for pirates.
The only element favouring the Victoria’s crew was the timing of the hijacking. Pirate attacks most often occur at dawn and dusk—to take advantage of reduced visibility—and the fact that the pirates chose to attack in the middle of the afternoon meant that the crew was afforded an unobstructed view of the oncoming attack craft.
* * *
Hussein Hersi’s insider account in Chapter 12 provides a detailed sketch of the Victoria gang, both from an operational and a financial standpoint. But can we trust his information? “Pirate math” frequently does not add up, so I will subject it to an external audit.
The first step is to establish the full size of the gang. Former hostages Traian Mihai and Matei Levenescu both stated that there were usually twenty pirates on board the Victoria on a given day, but provided two different figures for the number who congregated on the days leading up to the ransom delivery: thirty-two, according to Mihai, and thirty-eight, according to Levenescu. If, as Hersi said, each member of the operation was required to be on board the ship in order to receive his share (and it is hard to imagine any gang member would not want to be present for the big day), then thirty-two to thirty-eight individuals represented the total membership of the gang; I have averaged the two estimates to reach a figure of thirty-five. Of these, Hersi’s and Levenescu’s testimonies account for fifteen: Computer, Loyan the interpreter, Mustuku the accountant, the “commander of the khat,” nine attackers,1 and two cooks. Presumably, the remaining twenty men were the “holders” who guarded the ship and crew, in rotating shifts, once it had been brought to Eyl.
* * *
Hersi supplied some detailed—though incomplete—payroll figures, including the salaries of Computer ($1.5 million), the nine attackers ($140,000 each), the twenty holders ($20,000 each), and the two cooks ($15,000 each). However, Hersi’s estimates assumed a $3 million ransom, while the actual amount turned out to be only $1.8 million. To reflect the reduced total, I have scaled down each of Hersi’s numbers by 40 per cent: Computer would have received $900,000, each attacker $84,000, each holder $12,000, and each cook $9,000. Regrettably, Hersi did not provide the incomes for the interpreter, the accountant, or the commander of the khat.
Unfortunately, these numbers sum to significantly more than $1.8 million even before including Loyan, Mustuku, and the commander of the khat, all of whom presumably collected respectable salaries. Where are Hersi’s mistakes? Computer’s 50 per cent share is probably accurate—it is well in line with the “industry standard” for the sole investor in
a gang. The salaries paid to both the holders and the cooks are also probably roughly accurate; much less would not attract young men to a job that demanded almost two months of their time, and, while not as dangerous as that of the attackers, still carried substantial risks. The only remaining explanation is that Hersi overestimated the amount received by the attackers, to the extent of about $40,000 per man.
Matei Levenescu, it is important to note, dissented from Hersi’s account in two important ways. In his eyewitness description of the air delivery and subsequent partitioning of the ransom, Levenescu recalled that one member of the attacking team received a $150,000 share.2 It is almost certain this was Mohamed Abdi, the first attacker to board the vessel. Abdi’s higher share of the spoils was not the only indicator of his elevated status within the gang—he also served as the pirates’ media spokesman, providing details of the ransom amount to journalists and confirming the ship’s release. Levenescu also differed from Hersi in reporting that the pirates’ cook—only one, he said (plus an assistant)—received a $20,000 share. I have accepted Levenescu’s first-hand version of events over Hersi’s, most of which was second-hand.
Using the combined testimony of Hersi, Levenescu, and Mihai, I was able to piece together a rough estimate of the Victoria gang’s payroll (see Table 3). These figures debunk the myth that piracy turns the average Somali teenager into an overnight millionaire. Those at the very bottom of the pyramid, the holders and the cooks, barely made what is considered a living wage in the Western world: to maintain a pirate crew of twenty, each holder would have spent roughly two-thirds of his time, or 1,150 hours, on board the Victoria during her seventy-two days at Eyl, thus earning an hourly wage of $10.43. The head cook and assistant by all accounts never left the ship, and therefore would have earned wages of $11.57 and $5.21 per hour, respectively (a high-end restaurant meal in Somalia, for comparison, goes for about $10 to $15).
Even the higher payout earned by the attackers seems much less appealing when one considers the risks involved. The moment he steps into a pirate skiff, an attacker accepts about a 1–2 per cent chance of being killed, a 0.5–1 per cent chance of being wounded, and a 5–6 per cent chance of being arrested and prosecuted.3 By comparison, America’s deadliest civilian occupation, king crab fisherman, has an on-the-job fatality rate of about 0.4 per cent.4 Granted, the $41,000 that an attacker earns buys a lot more in Somalia than it does in the United States. But given that most blue-collar pirates have a virtual army of destitute friends and relatives they are expected to share with, they do not typically experience a sustained rise in their standard of living.
As in any pyramid scheme, the clear winner is the man at the top. Computer may or may not be all-knowing, as his reputation claims, but he certainly seems a lot savvier than the men working for him.
* * *
So much for income, but what about the gang’s expenses? Hersi claimed that the gang spent $500,000 on supplies—purchased on credit—while awaiting the ransom. On the surface, this seems like an exorbitant sum. Where could it all have gone? The gang’s operating expenses fell into four categories, in order of decreasing cost: khat, transportation and fuel, weapons, and food and beverage. Since everything was paid for with credit granted on the basis of the forthcoming ransom, the “pirate price” for these various goods and services was approximately double the norm.
Khat was by far the biggest drain on the group’s balance sheet. The crew did not habitually chew khat with their captors, but each of the twenty pirates on board would have easily consumed one kilogram per day, given not much else to do with his time. The Chief noted (to his astonishment) that the pirates paid $38 per kilogram for the drug—or $76, at credit prices.
The group’s transportation and fuel expenses included three items. Hersi related that the gang had two Land Cruisers on permanent retainer, primarily to transport members between Garowe and Eyl. In Puntland, a Land Cruiser rents for $200–$300 per day; assuming the pirates paid twice that, the cost of their premium shuttle service would have been close to $60,000.
The second item was the diesel used to power the Victoria’s emergency generator. During the first stage of her captivity, the crew used this generator to provide the electricity for everyday conveniences: lights, the mess, air conditioning, and so on. But by June, the Victoria’s supply of diesel fuel had been depleted. The crew then resorted to the extremely inefficient process of generating electricity using the ship’s main engine, until, shortly after I left Eyl, the supply of bunker fuel reached critically low levels and the engine had to be shut down. At this point, the pirates began to ferry drums of diesel from the shore to power the emergency generator, which, according to Levenescu, they only turned on at night. Marine emergency generators typically have a power output of around a hundred kilowatts, and consume twenty-five to thirty litres of diesel per hour at full load. Given the expense, scarcity (due to the remoteness of Eyl), and logistical difficulties in moving large amounts of fuel from the skiff to the deck of the ship, it is likely that the pirates did not operate the generator above half its full capacity. If they ran the generator between 7 p.m. and 5 a.m., at a cost of about $1.50 per litre of diesel (double the norm), they would have spent $225 on fuel during each of the Victoria’s final twenty-five days in captivity. Added to this bill was $6,800 for the four tonnes of diesel the pirates brought on board to power the ship’s fuel heating system, in preparation for the Victoria’s release.
The gang’s third transportation expense consisted of fuel for the supply skiffs, which two to three times daily ferried people and provisions to and from the Victoria. During my trip to Eyl I was lucky enough to witness the loading of an early morning transport (including the unfortunate goat), which was powered by a twenty-five-horsepower outboard motor. Assuming that each round trip took about fifteen minutes, the daily gasoline consumption for such a motor would have been about eight litres. With local gasoline prices at roughly $2.50 per litre, the boat would have consumed $20 of fuel per day.
As the Victoria’s captivity wore on, the gang became increasingly paranoid of outside attack. To defend themselves, Hersi related that they purchased two PKMs—standard-issue Soviet machine guns—and three thousand rounds of ammunition. Such weaponry is surprisingly expensive, even in Somalia; assuming that they paid twice the regular price, the total cost of these arms would have been around $30,000.
Food and drink were the least of the gang’s expenses. Hersi said that the gang purchased and slaughtered two goats daily: one for the guards on the ship, and the other for the crew. Breakfast might have consisted of goat liver, or beer, perhaps served with injera bread in an onion and potato broth, and lunch and dinner would probably have been fried or minced goat meat served on pasta or rice (supplied free from the Victoria’s overflowing hold) with bell peppers, potatoes, tomatoes, lettuce, bananas, and limes. Accompanying the meals (and each khat session) would be sweet tea, 7-Up, goat’s and camel’s milk (to sop the rice), and bottled water. In Garowe, a goat costs roughly $25; using credit in the remoteness of Eyl, the pirates paid the inflated price of $100–$150 per goat. The cost of all other ingredients would have added up to no more than $100 per day.
The Victoria was held captive from May 5 until July 18—a total of seventy-five days—of which seventy-two were spent anchored at Eyl. Assuming an average of twenty pirates on board at a given time (the “company” was not responsible for the expenditures of those on leave), the expense sheet for Computer’s operation might have totalled $230,000, as in Table 4. Even allowing for additional discretionary expenses of $50,000 on top of this already liberal estimate, we still fall almost halfway short of Hersi’s $500,000 figure. One explanation is that Hersi’s estimate was simply a baseless guess. But his frequent repetition of the figure suggests otherwise; perhaps $500,000 was the “official figure” bandied about in casual conversation by members of the gang.
Recalling that operating expenses were subtracted directly from Computer’s 50 per cent share of the
ransom, is it possible that the boss was exaggerating his contribution in order to justify his lion’s share? Only Computer and the group’s accountant are likely to have had an accurate knowledge of its financial structure. In light of the average pirate’s lack of mathematical skills, a budget inflation of 100 per cent would hardly be too big an accounting glitch to put over on the group’s lower-ranked members.
* * *
Computer had good reason to conceal the lucrative nature of his own payout. The necessary start-up capital—which went towards the purchase of a ten-to-twelve-metre boat, two outboard motors, weapons, food, and fuel—could not have exceeded $50,000 (see Table 5).
Of course, it is entirely possible that Computer already owned the boat and outboard motors, in which case his start-up costs would have been considerably discounted. But even if Computer’s initial contribution was in fact as high as $48,500 and his operating expenses were $230,000, he would have netted $621,500—a return on initial investment of an enviable 1,300 per cent. Sadly, Computer rebuffed my repeated attempts to interview him, and even instructed his underlings to avoid me altogether. Some months later, I again tried to reach him through my local journalist contacts, but received the following curt riposte: “Impossible. He is a Puntland government fugitive—will be shot or arrested on sight.”
I’ll wager that Computer will see the soldiers coming from miles away.
* * *
In many ways a typical Gulf of Aden hijacking, the Victoria was an ideal subject for a profile of a pirate gang. As I delved deeper into the operations of the Victoria gang, I gradually became aware of the similarities to a like-minded study conducted by then-University of Chicago grad student Sudhir Venkatesh and popularized by authors Steven Levitt and Stephen J. Dubner in their bestselling book Freakonomics. In Freakonomics, Levitt and Dubner explore the detailed financial statements of an inner-city Chicago crack gang, revealing that the most junior members of the gang, the street dealers—or, as Levitt and Dubner call them, the foot soldiers—earn a paltry $3.30 per hour. The point they make is simple: despite the glamorized wealth of the drug trade, very few people make a decent wage out of dealing crack.
