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Pirates, Inc.: Inside the booming Somali business

Meet the modern-day brigands behind the sometimes sophisticated, always risky operations that raked in an estimated $80 million in ransoms in 2008.

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It is the sudden wealth – Somali "bling" – that proves an irresistible draw for young pirates. (And Hassan's crew was young – including a 19-year-old, five 20-year-olds, a 21-year-old, and the éminence grise, a 36-year-old fisherman.) Suddenly able to build homes and buy fast cars, a young pirate can find himself the most eligible man in his village, even if elders disapprove of high-seas robbery.

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Mohammad Jumale, an aid worker from Mogadishu who travels often to the pirate haven of Haradhere on the southeastern coast, says that most Somalis know who the big pirates are in their area. "Even an uneducated village man knows who the pirates are," he says, noting that most Somalis believe the chiefs of piracy are the past and present leaders of Puntland itself.

The militia of former Somali Transitional Federal Government President Abdullah Yusuf is believed responsible for getting the first large pirate ransom – nearly $1 million – in the region when it seized a Taiwanese fishing trawler in 1997, say Pham and Mr. Jumale. It was under Mr. Yusuf's rule in Puntland that people-trafficking, counterfeiting, arms smuggling, and piracy took off, and Jumale says. Yusuf quickly surrounded himself with other businessmen involved in piracy, including current Puntland President Abdul Rahman Farole.

Small-time pirates may blow their money on girls and khat. But the big players are investing in property and – with a good accountant – laundering their money in a stable third country, such as Kenya, the United Arab Emirates, or South Africa.

Indeed, pirate booty is believed to account for the sudden influx of money in the Somali refugee enclave of Eastleigh in Nairobi. Ibrahim Ali Abdullah, a prominent Somali businessman there, says that while most streets in Eastleigh remain unpaved, gleaming glass-and-steel structures offering imported electronics and clothing at bargain prices are sprouting up.

"Who are the real pirates?" asks Andrew Mwangura, secretary-general of the East African Seafarers Association in Mombasa. "It's not these young boys on the boats. It's the people behind them, with the money to buy the boats and the motors and the guns and the GPS devices. They put their money here in Kenya, but also in Dubai or Canada or Mumbai." He pauses. "The real pirate could be a white person like you."