In addition to running their own stock exchange, it seems that Somali pirates might be getting into real estate in neighboring countries as well:

Even as housing prices have dropped sharply in the United States, prices in Nairobi have seen two- and three-fold increases the last half decade.

"There is suspicion that some of the money that is being collected in piracy is being laundered by purchase of property in several countries, this one being one of them," said government spokesman Alfred Mutua. "Especially at this time when we are facing global challenges of security such as terrorism and others, it is very important for us to know who is where and who owns what." [...]

Pirates in Somalia say they invest their ransom money outside their war-torn country, including in Kenya. One pirate who gave his name as Osman Afrah said he bought three trucks that transport goods across East Africa. A second pirate, who only gave his name as Abdulle, said he's investing in Kenya in preparation for leaving the pirate trade.

"Pirates have money not only in Nairobi but also other places like Dubai, Djibouti and others," said Abdulle. "I have invested through my brother, who is representing me, in Nairobi. He's got a big shop that sells clothes and general merchandise, so my future lies there, not in the piracy industry."

My colleague Elizabeth Dickinson has argued that pirates' financing is the achilles heel, and by investing in highly visible sectors like real estate, they seem to be sticking that heel pretty far out. Also, the fact that the AP's Tom Odula was able to get not one, but two pirates to tell him about their investment strategies, suggests that these guys might be getting a little overconfident.

Hat tip: Marginal Revolution

 

The New York Times reports over the past two years a piece of land in Bossaso increased in price 66 percent, a pair of men's shoes is up 150 percent. The reason? Pirates.

It appears the massive amount of booty being swashbuckled by Somali pirates is having very real effects on the consumer market.  In a sign that not much has changed in piracy over the past few centuries, the Somali pirates are spending their plunder on prostitutes, booze and drugs.

Last month alone, Somali pirates raked in over $3 million; and the E.U. reports that 11 ships are being held by pirates off the Somali coast, paydays waiting to happen.  This is translating to a giant disparity on the shore, as pirates drive around in luxury SUVs and don't even bother to collect their change after buying something. People who can't afford consumer goods often use the excuse, "we are not pirates."

They're not exactly romantics, though. ''Pirates do not waste time to woo women, but instead pay them a lot,'' said Sahro Mohamed, owner of a beauty salon.

MOHAMED DAHIR/AFP/Getty Images

Woe to the Maersk Alabama, the U.S.-flagged freighter captured by pirates in April! Today, the U.S. Navy reported, pirates attacked and nearly boarded the same boat again. The New York Times has some pirate commentary on the incident: 

Pirates in Xarardheere, one of their strongholds in Somalia, said Wednesday that some of their colleagues had been killed Tuesday night. "We have been told over the phone today that four of our colleagues were killed and two were injured," said a Somali pirate boss known as Red Teeth. "We will keep attacking on foreign vessels until illegal fishing and toxic dump is stopped," he added.

A few things of note.

First, the pirate activity off the Somali and Kenyan coasts and in the Gulf of Aden is generally chalked up to insecurity in the teetering African state. Pirates steal and murder at sea because of the dearth of opportunities and complete lack of governance at home. I hadn't heard the "illegal fishing and toxic dump" political argument, which sounds like it comes from Greenpeace, not Red Teeth, before.

Second, what strikes me most is the detail that the Maersk Alabama was 600 miles off of the Somali coast at the time of the attack -- the distance the Navy recommends. As ships have fortified and moved off the coast, the number of attacks has not decreased as one would expect (cf. the ICC maps of incidents from 2008 and 2009). The pirates have moved off shore with the boats -- and attacks have become more resource-intensive, dangerous, and difficult for them.

Two ships full of Somali pirates spotted a cargo ship in the Indian Ocean, 250 nautical miles off the Somali coast. Ready to pilfer, plunder and otherwise pirate a bountiful booty, they set toward the cargo ship under the dark of night, AK-47s ablaze. That is, until they got close enough to see that their cargo ship full of riches was in fact a French Naval vessel, full of armed soldiers.

What then proceeded is something of a Monty Python skit. The sailors, some of whom had directed commando operations to free French hostages taken by the pirates, chased one of the boats for over an hour. When boarded the ship they found that the boat of would-be thieves jettisoned their water, food and weapons, pretending to just be a bunch of guys hanging out on a dinghy at night on the Indian Ocean.

The other boat escaped and has yet to be found.

Olivier Amalvict/AFP/Getty Images 

For the last year, one question has been at the core of the piracy debate: Who or what made the Somali pirates into the real, armed, threat that they are? Chaos on land? Opportunity at sea? Poverty all around? Or the latest theory, from an Al Jazeera report: Western defense contractors trained them.

Before piracy spun out of control, Al Jazeera reports, contractors such as the Hart Group trained a Somali Coast Guard force in the semi-autonomous Pundtland region -- where piracy thrives. Those skills, one Somali tells the Al Jazeera reporter, were later helpful in hijacking ships and training others in his newly learned sea-faring ways. 

Sounds like a big "oops" for the contracting world... though any experience helping the "other side" hasn't deterred them much from working to stop the pirates. Remember when Blackwater said they would help fight pirates? Better yet, about how winning a lucrative "ransom and release contract" for handsome $500,000 each.

Yesterday I mentioned the "hijacked" cargo ship Arctic Sea had been carrying weapons from Russia to the Middle East. Now, the BBC reports that the editor of a Russian maritime journal who proposed the theory has been forced to flee:

Mr Voitenko - who was among the first to cast doubt on official explanations about the ship's disappearance - told the BBC it was nonsense to suggest pirates had been involved.

Instead he suggested the ship may have been carrying a secret shipment of weapons as part of a private business deal by state officials.

Speaking to the BBC from Turkey, Mr Voitenko said he had received a threatening phone call from "serious people" whom he suggested may have been members of Russia's intelligence agency, the FSB.

The caller told Mr Voitenko that those involved in the mysterious case of the Arctic Sea were very angry with him because he had spoken publicly, and were planning on taking action against him, he said.

"As long as I am out of Russia I feel safe," Mr Voitenko told the BBC. "At least they won't be able to get me back to Russia and convict [me]."

 

Guess he hit a nerve.

While I would take any new reports about the hijacking of the Arctic Sea with a heaping barrelful of salt, some of the latest theories are at least interesting.  In an interview with Time this week, the European Union's rapporteur on piracy said Israeli intelligence likely intercepted the ship, which was carrying a secret shipment weapons to the Middle East:

[H]e says only a shipment of missiles could account for Russia's bizarre behavior throughout the monthlong saga. "There is the idea that there were missiles aboard, and one can't explain this situation in any other way," he says. "As a sailor with years of experience, I can tell you that the official versions are not realistic."

Kouts says an Israeli interception of the cargo is the most likely explanation. But this theory, which some Russian analysts put forward in the days after the Arctic Sea was rescued and which Kouts agreed with in his interview with TIME, has been vehemently denied by Russia's envoy to NATO, Dmitri Rogozin, who says Kouts should stop "running his mouth." 

The theory is supported by the fact that Israeli President Shimon Peres made a surpsie visit to Moscow the day after the ship was rescued. 

Not so fast say repoters from Israel's YNet, who find the admiral's theory implausable. According to their anonymous sources, the Arctic Sea made a stop in Kaliningrad -- a Russian military outpost popular with arms dealers -- before picking up its stated cargo of timber in Finland: 

Sources say the Arctic Sea docked in Kaliningrad in June to undergo various repairs. The same sources say a deal was previously struck between Russian and Middle Eastern businessmen, agreeing on the sale of some of the S-300 missiles located at the port.

Some sources claim the Russian military's weapons industry was implicated in the deal and transferred a number of new missiles, including the X-500, to the port to be included in the sale. However the Kremlin was uninvolved, and apparently the deal was carried out in secret between businessmen from the private sector. 

After the deal was executed, an intelligence agency whose identity so far remains unexposed learned of the ship's departure with the weapons in tow towards Algeria, a country located on a regularly used route for the transfer of weapons to Iran and Syria. The intelligence agency then transferred an anonymous tip to the Russian authorities, according to the investigation. 

According to Russian sources the "hijackers", who in actuality were Russian intelligence officers, remained on the ship and reported to their superiors that they had found the missiles on board. On August 12 Russia announced it had sent naval officers to rescue the vessel and its crew.

The sources say the period of time between the hijacking and the Russian rescue mission was due to the Kremlin's desire to capture the ship away from the eyes of the media, in order to avoid an embarrassing incident that may have harmed its relations with Iran and Algeria. 

Again, I'm not endorsing any of these theories, but the story just gets more fascinating.

Ricky LOPEZ/AFP/Getty Images

 

Remember the missing cargo ship that had all of Europe in an uproar earlier this month? Turns out it may never have been missing after all:

President Medvedev sent the Russian Navy to find the Arctic Sea after it apparently disappeared while passing through the English Channel en route to Algeria from Finland. However, the Foreign Ministry in Moscow now says that Russian and international agencies had monitored the ship throughout its strange three-week voyage.

“Of course, the dry cargo carrier with a displacement of more than 7,000 tonnes was never missing. Its movement was being followed and its co-ordinates were being reported from several sources, including our foreign partners,” the ministry said.

This might have been something they could have shared with the other half dozen navies searching for the vessel.

It's still not exactly clear what, besides its stated cargo of timber, the ship was carrying or why it was hijacked. But the story gets stranger:

The saga also took a bizarre new twist when the ministry disclosed that the ship’s captain had tried to pass off the Arctic Sea as a North Korean vessel when it was intercepted by the Russian Navy. This is the first time that investigators have implicated the crew in the mystery.

The ministry said that the captain “unexpectedly claimed” to be in charge of a ship called the Chongdin 2 that was carrying timber from Cuba to Sierra Leone. Russian diplomats in Pyongyang checked with North Korean officials and were told that the Chongdin 2 was docked at a port in Angola at the time.

“In view of this information, the command of the Russian Navy decided to examine the ship and the examination confirmed the surmise that it was the Arctic Sea,” the Foreign Ministry said. It gave no indication of how the captain knew of the other vessel’s existence or why the Navy was unable to identify the Arctic Sea from its markings.

Who gets caught and then claims to be from North Korea???