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The Hostage Business

December 4, 2009 |

In the past 50 years, foreign oil companies and scores of crooked politicians have made billions of dollars while most residents of the Niger Delta continue to live in squalor.

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Members of Nigeria’s mobile police force in Port Harcourt. (Nicholas Schmidle)
Members of Nigeria’s mobile police force in the city of Port Harcourt, where cases of kidnapping-for-ransom have skyrocketed in recent years. (Photo by Nicholas Schmidle)

Two carloads of gunmen wearing ski masks parked outside Goodfellas, a popular karaoke bar in the Nigerian city of Port Harcourt, on a damp August night in 2006. When the first militant barged through the front door, he was holding an automatic rifle and yelling, “Everybody down!” John, a gregarious Scottish oilman, was sitting at a round table near the entrance, watching one of the owners, another Scot, impersonate Mick Jagger while singing “Satisfaction” at the karaoke machine. He and the other 50 or so bar patrons dove for cover. John lay motionless on the ground as the intruders scanned the floor, randomly picking hostages.

Port Harcourt is the most populous city in the Niger Delta, a sprawling wetland in southern Nigeria that covers an area the size of Kentucky and possesses vast amounts of light, sweet crude oil. John, who specialized in offshore engineering — and whose full name cannot be given here because he still takes jobs in the delta — moved there in 1992, lured by the city’s boomtown aura. His new salary dwarfed what he had been making back in Aberdeen, the heart of Europe’s petroleum industry (thanks to North Sea oil). Nigeria’s proven reserves are the 10th largest in the world, and the swamps of the delta provide almost all of it. In the past 50 years, foreign oil companies and scores of crooked politicians have made billions of dollars while most residents of the Niger Delta continue to live in squalor.

John had been working in the delta for 14 years when the kidnappings started. He saw the reports in early 2006 of expatriates being taken from offshore oil rigs by a group called the Movement for the Emancipation of the Niger Delta, or MEND. MEND pledged to cripple the Nigerian economy, and kidnapping foreign oil workers was one pillar of its strategy. Still, John didn’t think too much of it. He had been through years of military dictatorship and grown accustomed to the threat of armed robberies and the occasional sight of a body lying in the street. He went out to bars and restaurants and, as was his routine, to Goodfellas on Sunday nights. Until Aug. 13, 2006, MEND had never tried anything so brazen as abducting foreigners from the middle of the city. But everything John thought he knew about Nigeria was about to change. Port Harcourt was the center of a new industry: kidnapping for ransom.

Few sectors have endured the economic downturn of recent years better than kidnapping. Confidence in big banks and stock markets might be shaky, but the crudest form of trade — abducting and bartering people — seems alive and well. Gregory Bangs, the kidnap-and-ransom manager for Chubb Group, an American insurance company, said that patterns of kidnapping around the world are “almost inverse” to that of the global economy. “In a recessionary environment, the kidnapping rate goes up,” he told me. More companies are requesting kidnapping and ransom insurance — Bangs reported a 15 to 20 percent jump at Chubb over the past three years — than ever before. But why? What makes kidnapping and ransom, or K.& R., such a growth industry?

In April, speaking at a security conference in the Nigerian capital Abuja, Mike Okiro, then the inspector general of the national police, shared a revealing fact. He estimated that the total amount of ransoms paid in Nigeria between 2006 and 2008 exceeded $100 million. Over the same period, Nigeria emerged as one of the world’s kidnapping hot spots. And Nigeria shows no sign of relinquishing that dubious distinction; according to the minister of police affairs, there were more reported cases over the first seven months of 2009 than in all of 2008.

The kidnappings took an economic toll, with oil production down dramatically. In August, the government started an amnesty program for militants willing to hand over their weapons, and oil production recovered. Two months later MEND declared a cease-fire, during which numerous top commanders surrendered and an unsteady calm settled over the delta. But recent violence in Port Harcourt has involved “former gunmen,” and MEND is already accusing the Nigerian Army of truce violations and threatening “appropriate retaliatory actions.”

Besides, though MEND first introduced the kidnapping business to Nigeria, kidnapping for ransom has since become a broader phenomenon. One reason is the economic incentive. Two months ago, I met Okiro at his Abuja home. The room was decorated with fake sunflowers and many portraits of Okiro. He had retired as police inspector general but remained proud of the measures he took while in office to stop kidnappers. They included tougher penalties and a law requiring registration for all SIM cards, which would make it easier to track the criminals’ phone calls. But as long as families and governments and companies continue to pay ransoms, Okiro told me, “there will be no end to it.”

The U.S. government concurs. Discussing the Somali pirates in April, Secretary of Defense Robert Gates said companies that paid ransoms to the pirates were “part of the problem.” “Clearly, if they didn’t pay the ransoms, we’d be in a stronger position,” Gates added. (When a terrorist organization is involved, paying a ransom can actually put individuals and companies in violation of U.S. laws, including the Patriot Act.) As Erik Rye, an adviser for hostage affairs at the State Department, puts it, “If you’re out there feeding the bears, the bears are going to keep coming into the camp.”

But principles and policies are one thing. What about the victim? “Depending on who you talk to, we’re sort of the Antichrist: ‘You guys pay ransoms and that’s it,’ ” Jack Cloonan, the former president of Clayton Consultants, a leading kidnapping-and-ransom consultancy, told me. “That’s not necessarily the case. I don’t have any control over dysfunction in Somalia, which is just a hellhole.” To those who say the K.& R. industry only makes things worse, Cloonan replies, “Let’s wait for your kid to get kidnapped.”

OHN, THE SCOTTISH OILMAN, felt a tug on his shoulder and looked up to see a gunman, who said, “Come with me.” He and five other hostages — an American, a Briton, an Irishman, a Pole and a German — were pushed into minivans idling outside Goodfellas. They raced to the waterfront. At a wooden jetty, two speedboats waited. Everyone boarded, and then they disappeared into the delta’s creeks.

News about the kidnapping spread quickly around the world, and crisis-management teams formed in Lagos and Port Harcourt. At the meetings sat the hostages’ national and corporate representatives, along with kidnapping-and-ransom consultants. The K.& R. industry has four main components: K.& R. consultancies, insurance companies, corporations and governments. About three-quarters of Fortune 500 companies in the United States carry kidnapping insurance. John Chase, managing director of crisis response at AKE, a risk-mitigation company, has been in K.& R. for almost 20 years and says corporations are “taking out more and more policies.” American International Group (AIG) maintains 5,000 such policies. AIG, Lloyd’s of London and Chubb dominate the insurance side of the industry. All told, the global premium for kidnapping-and-ransom policies totals approximately $300 million.

What does a kidnapping-and-ransom policy entail? If an employee of Acme Widgets is kidnapped, Acme pays the ransom, and its insurance company pays out to Acme. But more important, once a kidnapping occurs, K.& R. consultants enter the picture. The consultant’s primary job is to negotiate the ransom. There are fewer than 30 such consultants with more than 10 years of experience around the world, according to Chase of AKE.

The contemporary kidnapping-and-ransom industry emerged in the late 1970s in response to rampant kidnappings in Colombia and throughout Latin America. Globally, for the next 25 years, most cases occurred in Latin America. But political and economic developments have begun redrawing the map of kidnapping hot spots. Chase still considers Colombia “the most mature market” for kidnapping because Colombian perpetrators have been at it the longest — although incidents decreased after President Alvaro Uribe began to take on the country’s guerrilla movements in 2002. There were 465 reported cases in Colombia last year (down from almost 3,000 in 2002). Mexico now has the most kidnappings, with an estimated 7,000 in 2008, though this number has stayed steady in recent years. In fact, Latin America’s share of total reported kidnappings fell to 42 percent in 2008 from 65 percent in 2004.

Gregory Bangs, the K.& R. manager at Chubb, doesn’t foresee the global market flattening out anytime soon. He said new markets were flourishing outside Latin America. Two emerging markets are in Africa and the Middle East; together their share of reported cases nearly quadrupled between 2004 and 2008. During that time, Somali pirates seized dozens of ships off the Horn of Africa. The ships were usually insured, and the pirates made off with increasingly large sums. In postwar Iraq, criminals relied on kidnapping to raise money, and Al Qaeda used kidnappings and beheadings to spread terror. The Taliban have also turned to kidnapping to raise money. And in Nigeria, what began with MEND quickly expanded. Foreigners are still kidnapped in Nigeria, but because many international companies have pulled their employees out of the country, the majority of cases now involve Nigerian victims. The range of victims seems to keep expanding. Kidnappers have grabbed children on the way to school. This summer, two politicians from central Nigeria were abducted; when their relatives couldn’t pay the ransom, the captors freed the two men to go and find the money — but only after they left their wives as collateral.

Perhaps the most shocking incident occurred in August, when Pete Edochie, a star of Nigeria’s film industry, was kidnapped. Edochie is a national icon. He is chairman of a national rebranding committee that is assigned the task of improving Nigeria’s image. Nigerians were shocked when they heard that kidnappers on a road in Anambra State had blocked Edochie’s S.U.V. and pulled him from the vehicle. Days later, after he was released for a reported 10 million naira, or $64,700, a newspaper headline read: “But We Are All Kidnapped!”

THE MEND MILITANTS built makeshift huts for John and his fellow hostages while singing Christian hymns and drinking kai-kai, a locally made palm liquor. The hostages ate takeout, which the kidnappers ordered from a restaurant called Mr. Biggs in downtown Port Harcourt — an hour’s boat ride away.

Helicopters passed over the camp occasionally, though no one ever seriously thought about trying to escape. They would be lost without G.P.S. devices, maps or compasses. In addition, the kidnappers assured them that negotiations were moving ahead.

If there’s any consolation to being abducted in Nigeria, it’s that kidnappers there seldom get violent. It’s purely business. “Someone’s going to pay them something; that they know,” Mark Courtney, a South African kidnapping-and-ransom consultant, recently told me. K.& R. consultants almost never get on the phone and haggle with kidnappers. Their expertise is devising the “target settlement figure,” taking into account numerous factors. Is the victim carrying anything that identifies him as working for a specific company? Are the kidnappers experienced? What was the amount of the previous ransoms paid in that city or state? “You go by what you know to be the going rate in that particular region,” Chase, of AKE, said.

Negotiating a ransom is more art than science. “If you pay the ransom too quickly, the bad guys think you have access to more money,” Courtney said. If you pay too late, the victim could get sick and die. “You have to turn your client into a commodity,” he said.

A breakthrough came on the 10th day of John’s captivity. That morning, one of the kidnappers handed him a camouflage shirt, pants, a pair of gloves and a balaclava, with instructions to suit up. John put on the clothes, which made him indistinguishable from his captors. They all boarded a speedboat and motored through the creeks. After about 20 minutes, the boat beached on a patch of sand, where three men were waiting. One of them held a cellphone. “We’re going to make a phone call, and a guy is going to speak with you and give you a proof-of-life question,” said the one holding the phone, whose voice brimmed with the measured confidence of someone about to close a deal. “They want to know that you’re alive.”

Chase said the proof-of-life question — and the way it is handled — often defines the case. “It’s always comforting when they talk about the P.O.L.,” Chase said. “They’ve done this before. They know the form. They know how the game is played.”

John took off his balaclava and held the phone to his ear. The man on the other end said he was with the State Security Services, or S.S.S. He asked John two proof-of-life questions: where did he live in 1986 and what was the company he worked for. John answered them both correctly.

“All right, I know it’s you,” the officer said. He assured John that the S.S.S. was working hard for the release of the six men, and then he hung up. John pulled on the balaclava, climbed into the boat and returned to camp.

That night, the kidnappers got ready. Everyone eventually loaded into three speedboats and raced toward a meeting point. After some time, John could make out the yellow glow of Port Harcourt up ahead. The boats eased against a crumbling concrete berth, and the hostages were hoisted out. They ran to a waiting Land Cruiser and then took off down a potholed, unlighted road, en route to the governor’s mansion.

A battery of TV cameras was waiting for the six hostages, who were jubilant, shocked and relieved. Peter Odili, the debonair governor of Rivers State, of which Port Harcourt is the capital, hugged the men and smiled. During Odili’s two terms as governor, from 1999 to 2007, journalists and human rights organizations criticized him for paying thugs to rig elections and using public funds to pay ransoms. “Kidnapping business is a source of fraud for the governors,” Festus Keyamo, an Abuja-based human rights lawyer, said. (Among his clients is the militant leader Mujahid Dokubo-Asari.) One kidnapper in Port Harcourt told me that every ransom he received had been paid by the state government.

ONE MORNING IN late August, I stood outside a villa in Port Harcourt with a kidnapper named Adiele Nwaeze. Overhead, clouds moaned with thunder, and rain began to fall. Nwaeze, who is 33 and a father of four, stepped under a ledge to stay dry. He wore a navy blue suit and black leather shoes shaped like gondolas.

Nwaeze got into the business 10 years ago. His father, who sold firewood for a living, died when Nwaeze was young. Nwaeze took a job as an auto mechanic to support his mother and three siblings. One day, he went to the governor’s residence and offered to work on the official vehicles. The gatekeepers told Nwaeze that the cars were under warranty, so he left.

Not long after that, Nwaeze says, emissaries of Peter Odili, who was a gubernatorial candidate at the time, showed up at Nwaeze’s garage. He says they offered him 200,000 naira, or about $1,700, to help them rig a coming election. They threw in a machine gun and 10 AK-47’s to sweeten the deal, according to Nwaeze. (Odili told me he had never heard of Nwaeze.) Nwaeze says he accepted and spent Election Day stealing ballot boxes. Odili won with ease. But after the polls closed, there was no more work. Nwaeze formed a gang. “I had no choice,” he said. “I had a gun and I had to make a living. We started bunkering oil pipelines” — or stealing oil — “then kidnapping expatriates — a lot of white men.”

In July 2008, Nwaeze’s gang of about 10 men abducted two Germans from a construction site near Port Harcourt. The kidnappers outgunned more than a dozen Nigerian soldiers who were assigned to protect the expatriate staff. “We kill the soldier and take the man,” he said. “We are not afraid of the soldiers.” Nwaeze took the German hostages into the creeks and held them for more than a month while their employer, a German-Nigerian construction company called Julius Berger, worked for their release. (Meanwhile, Julius Berger terminated its outstanding contracts in the Niger Delta.) Nwaeze first demanded 300 million naira, or $2.6 million. He claims he settled for 50 million naira, about $430,000.

What did Nwaeze do with his cut? First, he hired an architect to design a home in Port Harcourt. Then he bought cars: a Honda City and a Nissan Pathfinder for himself, and a Honda sedan for the commissioner of police in Rivers State, according to Innocent Nzenwa, Nwaeze’s lawyer. Nzenwa described his client’s relationship with the commissioner as “a romance.” “They knew what each other were doing, but they were in payback,” he said. “You can’t commit such crimes without notifying the policemen. They usually inform the police on the day of the strike so the police stay off the road and allow them. The police get their own percentage.”

Bala Hassan, the aforementioned police commissioner, told me Nwaeze was “the most-wanted kidnapper in Port Harcourt” as well as “very vicious.” He denied any ties with the man, saying: “I am a lawyer; I don’t put my hand in that. That’s a factual impossibility.”

Back in April, not long after Nwaeze’s new home was finished, the “romance” with the commissioner, if there was one, soured. Nwaeze’s home was unexpectedly bulldozed. Nzenwa, the lawyer for Nwaeze, blamed a “falling out” between the two men that resulted in wanted posters for Nwaeze all over Port Harcourt.

The villa in which Nwaeze and I met in August doubled as a military safe house. Ten days earlier, he surrendered under the aegis of the amnesty program. Still, Nwaeze was skeptical. He expected more incentives from the government. “Let them give me back my house,” he said. “Then give me money to start my life so I can forget about how I have come. On my own, I used to make 20 million naira” — $130,000 — “in less than a week. Now that I have dropped the gun, they should give me more than that, so that I can remove my eyes from these things.”

Nzenwa, the lawyer, suspected his client would be kidnapping again before long. “When the government doesn’t meet his requests, he will have to go and rearm himself,” he said.

HE KIDNAPPING-AND-ransom-insurance industry thrives in a morally ambiguous space. But what is the alternative? “Fire insurance has been known to stimulate arson, and life-insurance policies have led to quite a few homicides, too,” said Thomas Hargrove, an American held for 11 months in 1994-5 by Colombian guerrillas and whose story inspired the making of the 2000 film “Proof of Life.” “Are you going to quit taking out life insurance and fire insurance?”

Even kidnappers seem cognizant of their ethical compromises. Ransoms may perpetuate the consulting business, but kidnappers are the ones who decide whether abducting people remains a viable trade. In late August, I reached Mujahid Dokubo-Asari on the phone shortly after he fled Nigeria for Benin. He was among the first militants to take up arms in the Niger Delta. His arrest in 2005, and subsequent demands by other militants for his release, fostered the creation of MEND.

Dokubo-Asari began our conversation by calling kidnapping “immoral,” “evil” and “counterrevolutionary.” Criminals were responsible for most of the kidnappings, he said. They were the ones accepting amnesty, he added, not the true militants or, in his words, “freedom fighters.” “Even if they drop their guns and come out today — what next?” he asked. “The money they were making, the undeserved money from kidnapping, they are not going to get it any longer. If they can’t get it any longer, they will go back to crime.”

Dokubo-Asari’s objections to kidnapping softened, however, the more we spoke. When I asked him about those still fighting in the creeks, he referred to the militants’ “near agreement” that “abduction of government officials and those businessmen who have benefited from government contracts, that is not immoral.” And foreign oil workers? “We are discussing all that,” he said. “The conversation is going on now.”

On my last night in Port Harcourt, I had dinner at Cheers Bar with a kidnapper who asked to be identified by his nom de guerre, “De Don.” De Don, who is 28, wore a peach-and-white long-sleeve shirt, with the top buttons undone. A gold cross hung around his neck. “It is just for beauty,” he said. “It doesn’t mean I’m a Christian.” Three years ago, De Don graduated from college with a degree in political science. He considered “The Prince” his favorite book. While at school, he joined a campus gang known as the Greenlanders. When he couldn’t find work after graduation, he tapped into the Greenlanders’ alumni network and asked for help. Soon he was living in the creeks with fellow Greenlanders, part of a kidnapping syndicate.

De Don admitted kidnapping three people. One of them was the 7-year-old son of a politician. He ran an amateur operation; the ransoms he received were paltry compared with those commanded by someone like Nwaeze. “I have never kidnapped whites,” he told me. “That’s where the real money comes.” Still, he made enough in the past year to rent an apartment in Port Harcourt, buy a 2002 Mercedes sedan, support his family and open a beauty salon for one of his girlfriends. He hoped one day to buy a cinema where he could show soccer matches.

A World Cup qualifying match was playing on a TV across the room. A handful of boisterous middle-aged white men clustered around the bar.

I asked De Don if he might contemplate coming back to Cheers Bar on a busy night to kidnap a few expats. “No way,” he said. “When I am coming into a bar, I’m coming to spend money and flex, not to kidnap anyone.” Plus, he was waiting to see how the amnesty played out.

“After knowing what it takes to become a political scientist, then going into such things as kidnapping, it’s not really ideal,” he went on to say. The bar cheered when one team scored a goal. De Don turned to the TV and watched the replay. Then he looked back at me and shook his head. “I am not happy doing this,” he said. “But I need it to survive.”

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