What to do in Somalia?

By Michael Ruhl, University of New Mexico – Talk Radio News Service

The lack of a coordinated international response might have emboldened pirates off the coast of Africa to step up their terror, according to Retired Vice Admiral Kevin Cosgriff. This comes on the heels of Secretary of State Hillary Clinton announcing the Obama Administration’s new approach to the situation in Somalia, which includes the U.S. seizure of financial assets.

Cosgriff believes that a coordinating authority among the nations with maritime interests in the region could help present a unified front against pirates.

“With so many different players on the field, it’s a bit like an all-star game without an authoritative coach. There are differing rules of engagement, national approaches, and limits on what they want their warships to do.” Cosgriff said it’s a challenge “to have the right ship from the right navy in the right place at the right time to do what you want to do.”

Cosgriff is former commander of the US Naval Forces Central Command. He held a talk at the Middle East Institute, at which he addressed the possible courses of action which could be taken against maritime piracy in the nearly 400,000 square mile region along the Somali coast.

“Doing nothing, or being ineffective at what we do, strikes me as bad policy,” said the commander, who addressed five possible courses of action that could be taken to curb the lawlessness:

• Do Nothing: Companies which traffic goods off of the African Horn would pay ransoms and treat piracy as a cost of business.
• Arm the Crews: Ship crews would be expected to maintain their own security through hiring private security forces or arming their mariners.
• Flood the Zone: International naval coalitions and unofficial patchworks of navies “with significant maritime interests” would patrol the region.
• Go in on ground - Light: Tactical airstrikes and troops on the ground aimed at equipment and infrastructure within known pirate camps along the Somali coastline.
• Go in on ground - Heavy: Tactical airstrikes and troops on the ground to flush out the pirate camps, seize property, and not allow the pirates to bare the fruits of their actions.

Cosgriff emphasized the importance of a coordinated international response in whatever route was selected, because it is an “international problem in the great global commons known as the sea.” A coordinated response would provide a uniform framework in which to react to pirates when they engage in hostility, according to Cosgriff. He said that since the U.S. is a global maritime leader, it should take a leading role in the solution.

“Whatever lies ahead, we have to take care… that the cure is not worse than the disease,” he said.

Cosgriff acknowledged that piracy is a business, and doesn’t believe that it is rooted in simple poverty and desperation, although he acknowledged those as contributing factors. “The overall problem is that of organized criminal clans,” groups which he said, “try to extend seaward the rule of the gun which pertains in much of Somalia.” He continued, “in short, piracy pays.”

Somalia has faced ongoing violence and lawlessness since the government collapsed in 1991.

Somalia: A Pirate’s Paradise

By Michael Ruhl, University of New Mexico – Talk Radio News Service

Piracy is nothing new in Somalia. Every day pirates run free off of Somalia’s nearly 2,000-mile coastline and find haven within this African country which is slightly smaller than Texas. The problem has long been of concern to the U.S. State Department and the United Nations, but it has been gaining special attention once again because of the targeting of American citizens. The hostage situation with American ship captain Richard Phillips caused a nation to hold its breath, and many were in shock when U.S. Congressman Donald Payne (D-NJ) escaped a mortar attack aimed at his airplane in Mogadishu on Monday while the congressman was meeting with government officials.

Maritime piracy has been a lucrative business since the collapse of the Somali government in 1991 and in the thirteen governments to exist since. It can provide quick income for the uneducated and impoverished, and has become a fact of life for companies trading around the Horn of Africa.

The United States has not had full diplomatic ties with Somalia since 1991. Somalia now has a U.S. “Ambassador-at-large” with no formal office in the U.S. from which to work. The Ambassador-at-large, Abdi Awaleh Jama, believes that the violence comes from a “poverty of leadership” in Somalia. Jama said the leaders at the regional and national level don’t serve communal interests but rather favor specific clans or family members.

“The dominant paradigm now is the clan paradigm... not the nation paradigm,” Jama said. He continued, “When there is no law and order, you take the law into your own hands.” Jama said the natural resources in Somalia have been seized by certain clans and used to hold down opposition within the rest of the country.

Jama, who does not fault the sitting Somali president for the country’s condition, said that pirates flourish off the expansive coast because the rule of law has not existed in Somali society in the past decade. When such anarchy is combined with the overflowing poverty, a situation will develop where people will seize “any opportunity they have to make money,” said Jama.

Officials within the Somali government have defended the so-called pirates as being a “coast guard” who protect the country’s resources. Jama dismisses that claim.

“These are criminals who want to make quick money, and who want to just use force, in the name of saving Somalia,” he said. “They are only there to enrich themselves, and to use that gimmick that they are defending Somali resources, which is wrong.”

Joel Carny, an expert from Refugees International, said that Somalia “really hasn’t had a central government that has functioned in so long.” He believes this has led to “warlordism” and opportunity for clan-based regional politics to develop. He called Somalia “an environment in which everyone has to fend for themselves.”

According to Carny, approximately two million Somalis have been displaced due to the violence in the past decade and three million are in need of emergency assistance.

Somalia’s Ambassador to the United Nations, Dr. Elmi Ahmed Duale, acknowledged in a phone conversation that the violence was taking place and said the government cannot hide it. He hopes for a resolution.

The international community has taken this issue very seriously. The United Nations has had peacekeepers in Somalia at various times since 1991, and most recently the African Union has dedicated resources through AMISOM, their official Mission to Somalia. In February 2009, the United Nations Security Council authorized AMISOM to stay in Somalia for another six months, which places peacekeepers on the ground through August. The United Nations says the goal of this mission is to help establish order and secure human rights.

Recent Somali elections were marked by violence to the point that they had to take place in neighboring Djibouti. Somali President Sharif Sheikh Ahmed was elected in January, and shortly thereafter, Ahmed appointed a new prime minister.

Carny is doubtful of the new government’s ability to establish order but thinks that the international community should give the new president a chance. Carney said, “Lets see if [the government] can establish a viable authority... that can at least establish security inside the capitol and then spread from there.” Carney said, however, that “anyone who’s pessimistic about Somalia is probably going to be right.”

Jama wants the United States to help Somalia build a “proper coast guard,” which would replace vigilantism that currently runs the shorelines.

Both Jama and Carny acknowledged that most of the social problems in Africa are rooted in the colonial past, but Carny believes that Africa must move on. “We’re not going to redraw the boundaries in Africa,” said Carny. He suggested that Somalia could be governed regionally through “some kind of Federalism,” as a credible solution for ethnically diverse nations prone to social conflict, civil war and genocide.

“For better or for worse, these countries have to live and work their way out of consequences. When you get good leadership at the national level... things can turn around fairly quickly,” Carny said.

Listen to the audio report here.

Geithner, Bernanke & Dudley defend AIG

by Christina Lovato, University of New Mexico-Talk Radio News Service


“This is an extraordinary time and the government has been forced to take extraordinary measures. We will do what is necessary to stabilize the financial system, and with the help of Congress, develop the tools that we need to make our economy more resilient and our system more just,” said Treasury Secretary Timothy F. Geithner at a House Committee on Financial Services hearing.

Today, William Dudley, the President and Chief Executive Officer of the Federal Reserve Bank of New York along with Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve System and Treasury Secretary Timothy F. Geithner testified in front of Congress and were hammered with questions regarding the American International Group, Inc. (AIG), a company at the center of the economic crisis.

Bernanke said that the Federal Reserve along with the Treasury made their decision to lend $85 billion to AIG in September 2008 because they agreed that AIG’s failure under the conditions then prevailing would have posed unacceptable risks for the global financial system and for the economy. “Global financial markets were experiencing unprecedented strains and a worldwide loss of confidence.... At that time, no federal entity could provide capital to stabilize AIG and no federal or state entity outside of a bankruptcy court could wind down AIG,” said Bernanke. When it came time to talk about AIG’s payout of retention bonuses to employees at AIG’s Financial Products Unit (FP), Bernanke stated, “It was highly inappropriate to pay out substantial bonuses to employees of the division that had been the primary source of AIG’s collapse.... I asked that the AIG-FP payments be stopped but was informed that they were mandated by contracts agreed to before the government’s intervention.”

Dudley stated that he believes AIG’s Chief Executive Officer, Edward Liddy, weighed a number of factors in when deciding not to attempt to prevent payment of retention awards owed to AIG-FP employees. Dudley said that the factors include “the likely negative effects of disruption in staffing at FP in managing its multi-billion dollar exposures, legal advice that the contracts were valid, meaning that breaking them would likely increase the amount of company funds ultimately paid to the covered employees and the negative consequences to AIG’s business that could result from the public abrogation of these contracts.”

Geithner said that the Treasury is working to promulgate rules and to develop a program under the original TARP legislation to review certain bonus awards already paid. Geithner stated, “The proposed resolution authority would allow the government to provide financial assistance to make loans to an institution, to purchase its obligations or assets, to assume or guarantee its liabilities, and purchase an equity interest.... This proposed legislation would fill a significant void in the current financial services regulatory structure in respect to non-bank financial institutions. Implementation would be modeled on the resolution authority that the FDIC has under current law with respect to banks.” Geithner concluded the hearing by saying, “This plan will work. This plan because of the authority provided by the Congress, not just of the Treasury, but the fed, gives us broad ability to do what you need to get through a financial crisis like this.”

Whistleblowers Welcome

By Kayleigh Harvey - Talk Radio News Service

Deputy Director of the FBI, John Pistole, Special Inspector General for the Troubled Assets Relief Program, the Honorable Neil Barofsky and Acting Assistant Attorney General Rita Glavin from the Criminal division testified before a full room at a Senate Judiciary Hearing today, to discuss "The Need for Increased Fraud Enforcement in the Wake of the Economic Downturn."

Chairman of the Committee, Senator Patrick Leahy (D-Vt) said: "This is not a partisan issue...we want to strengthen fraud enforcement, the Justice Department, the FBI, the Office of the Inspector General, the Department of Housing and Urban Development and even the Postal Inspection Service."

"One thing I learned as a prosecutor...you can have all the laws of the world in the books but if you don't have the resources to enforce the laws, and actually go out there after people who have broken the laws, they are meaningless."

"We do know that banks and private mortgage companies relaxed their standards for loans, proving ever riskier mortgage and less and less due diligence, it's almost like open the door and saying, 'Hey, come on in fraud is welcome'," Senator Leahy continued.

Also discussed at the hearing were the measures on how to tackle fraud now and in the future in relation to the economic crisis, catching criminal activity, and the Madoff scandal.

With regard to whistleblowers there seemed to be a unanimous agreement by the witnesses, that whistleblowers are an important tool in tackling fraud.

John Pistole said: "Anybody who has credible information, that can help either predicate or enhance investigation we look forward to working with."

Rita Glavin stated that "The Department has enjoyed tremendous success from working with whistleblowers...we have obtained essentially $10 billion in the past 10 years...the Department believes that whistleblowers, who are often insiders, can serve a vital function in our law enforcement efforts in exposing potential fraud in connection with government programs."

Neil Barofsky announced at the hearing that the TARP program encourages people to contact their hotline which can be found on their website if they have any information on fraud. TARP has hired a lawyer to follow all hotline enquiry leads. Barofsky said he would rather they went through 99 false lines of enquiry in order to avoid missing that one real piece of information.

Asked by Senator Edward Kaufman (D-Del) what were the most obvious fraud cases that TARP would move on quickly in order to attempt to get the most number of prosecutions, Neil Barofsky said: "Going after licensed professionals...focussing on exclusively the gatekeepers; the lawyers, the appraisers, the licensed mortgage brokers...making examples of those and letting their colleagues know that criminal behavior in these types of mortgage frauds is unacceptable, because they have the most to lose."

Federal Reserve to be more transparent about lending policies

By Kayleigh Harvey - Talk Radio News Service

Federal Reserve Board Chairman, Ben Bernanke testified before the House Financial Services Committee concerning "An Examination of the Extraordinary Efforts by the Federal Reserve Bank to provide Liquidity in the current Financial Crisis."

Chairman Barney Frank, (D-Mass) said in his opening statement: "I read before coming here, the new Treasury of the Secretary's announcement of his plans to use the TARP funds. It is very clear that the Obama administration, as did the Bush administration is using the money in the TARP program in conjunction with the lending authority of the Federal Reserve."

"There are also some important questions in the ways in which we govern ourselves. The Chairman of the Federal Reserve and indeed the Federal Reserve system, I believe were responding to the very real needs in society and people need not agree with every specific decision that the Federal Reserve made, to appreciate the sense of very important public purpose that has motivated them," Chairman Frank said.

The Trouble Assets Relief Program (TARP), was a program set up, in October 2008, by the United States government to allow them to purchase assets and equity from financial institutions to help strengthen them during the economic recession.

The Ranking Member of the Committee, Representative Spencer Bachus, (R-Ala) said: "I believe in a democracy it should be a requirement in any agreement or transaction involving the government that...in the event that our governing officials come to the decision that the commitment of public funds is necessary, if a commitment of taxpayer funds or guarantees cannot be disclosed because of the circumstances involved it cannot and should not be made."

Chairman Bernanke answered questions for over two hours to the Committee concerning the Federal Reserve’s problems in this economic crisis.

"I firmly believe that central banks be as transparent as possible both for reasons of democratic accountability and because many of our policies are likely to be more effective if they are well understood by the markets and the public...The Federal Reserve is committed to keeping the Congress and the public informed about its lending programs and its balance sheet."

"To improve public access to information concerning Federal policies and programs, Federal Reserve staff are developing a new website that will bring together a new systematic and comprehensive way to find a full range of information the Federal Reserve already makes available, supplemented by new explanations, discussions and analysis. Our goal is to have this website operational in a few weeks."

Chairman Bernanke also referred to a new committee that will revue the Federal Reserve’s current publications and disclosure policies that will relate to the Federal Reserve's balance sheet and lending policies.