Kidnapping and ransom in Nigeria

 Paying ransom is a repugnant transaction that looks different ex ante and ex post.  In Nigeria, where kidnapping is rampant, the government's view is increasingly that ransom payments should be prohibited, to make kidnapping unprofitable.  But after family members have been kidnapped, families are reluctant to let them be murdered, and are consequently eager to negotiate a ransom.

The WSJ has the story

A Kidnapping Negotiator Gets His Biggest Test: Saving His Own Wife. Abdullahi Tumburkai volunteers to help bargain with kidnappers in what has become a crisis of abductions in Nigeria.  By Joe Parkinson 

"Mr. Tumburkai estimates he has helped free more than 80 people across Nigeria’s northwest over the past year, in what has become one of the world’s worst kidnapping crises. Kidnapping for ransom has become a brutally profitable business across the country by heavily armed criminal gangs exploiting the government’s weak security presence. Gangs abducted an estimated tens of thousands of Nigerians in 2021, including more than 1,200 children seized from their schools.

...

"If they don’t haggle a ransom the victims can afford, hostages could be killed. If they succeed, these brokers make themselves a target among those who oppose any negotiations with kidnappers. The work embodies a moral argument that divides governments across the world: Should you pay to secure the return of hostages?

"Nigeria’s government and many community leaders say freelancers like Mr. Tumburkai are making the problem worse by creating a pathway for payments that finance terrorism and encouraging more kidnappings.

"Garba Shehu, Nigeria’s presidential spokesman, said that negotiating with kidnappers was “totally unacceptable” and that the government frowns at ransom payments. “It’s the responsibility of the police to advise persons whose relatives were kidnapped on what to do,” he said.

...

"On Wednesday, Nigeria’s attorney general said the groups responsible for the kidnappings would be formally listed as terrorists, and as a result anyone negotiating with kidnappers could be charged with financing terror groups."

Reputation among thieves: ransomware and kidnapping

Like everyone else, I occasionally get notifications of data breaches from organizations with which I have digital relations.  Often the breach involved a third party.  Sometimes the breach involves the theft of data accompanied by a demand of ransom--i.e. the victim is invited to pay the cybercriminal, who then promises to destroy the data instead of selling it on the dark web or otherwise using it.

This bears some resemblance to the kidnapping business, and its high-seas version, piracy.

Here's part of an email I recently received informing me of such a breach, and subsequent payment of ransom.

"I’m writing to inform you that Blackbaud, the company that hosts [xxx’s] relationship management system, suffered a security incident in May. Blackbaud is the world’s largest provider of fundraising technology for non-profits and educational institutions, and many organizations have been impacted by this incident.

...

"We were also informed by Blackbaud that in order to protect data and mitigate potential identity theft, it met the cybercriminal’s ransomware demand. Blackbaud has advised us that it received assurances from the cybercriminal and third-party experts that the data was destroyed. Blackbaud has been monitoring the web in an effort to verify the data accessed by the cybercriminal has not been misused. "

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Why should "assurances from the cybercriminal" be reassuring? (and for how long?).  And what are the roles played by "third-party experts"?

My guess is that, as in the kidnapping biz, intermediaries have emerged to conduct the negotiations, get some sort of assurances, and make it possible for criminal organizations to maintain reputations for honor among thieves.

It is of course possible to regard ransom paying as a repugnant transaction that facilitates ransomware, kidnapping, etc.  In fact the U.S. for some time made it a crime to pay ransom to kidnappers, but relaxed that view over time, as kidnapping became a bigger international business, and there was often a considerable desire (sometimes covered by insurance) to pay ransom when it seemed the best way to recover the kidnapped person alive.

Here are some related posts which touch on that story:

Monday, June 24, 2019  Kidnapping insurance

Tuesday, September 13, 2016 Ransom as a (not so) repugnant transaction

Saturday, June 27, 2015 Ransom as a repugnant transaction--the U.S. relaxes its position

Monday, August 9, 2010 Brokers for pirate ransom

Saturday, December 5, 2009 Market for kidnapping

Friday, February 13, 2009 Pirate ransom: counterparty risk in the endgame

Sunday, November 30, 2008 Pirate ransom: counterparty risk

Kidnapping insurance

Preston McAfee points me to the following interesting article:

The weird world of kidnapping insurance, by Jeff Spross

"A private market for insuring and dealing with kidnappings might sound, at first blush, like a terrible idea. A kidnapping is already a fraught situation; a mix of fear, greed, violence, and coercion that occurs outside the bounds of the law. And private insurers often have a reputation for being cold-blooded and predatory themselves. The average person could be forgiven for balking at the idea of combining the two.

"Yet not only does a private market for insuring kidnappings and advising the negotiations exist — by all accounts it's quite effective. If you're the victim of a kidnapping where professional insurers and negotiators are involved, the chances that you'll come back alive are roughly 97.5 percent.

"The K&R market consists of 20 or so firms, all operating out of Lloyd's of London, an international marketplace based in Britain, where insurance providers, clients, brokers and underwriters can all find one another. The K&R firms compete for business, and provide their clients with both insurance to backstop potential ransom payouts and consultants who help guide and strategize the actual negotiations with the kidnappers. While some wealthy individual families do occasionally buy the services of K&R providers, the vast majority of customers are companies insuring their employees who work in risky areas. Roughly three-fourths of Fortune 500 companies have some sort of policy, with total premiums reaching $250 to $300 million a year.
...
""The only way that kidnapping can work as well as it does is that the kidnappers understand that they're in a repeated business," Anja Shortland, an economist at King's College London, who's written a book on the K&R insurance market, explained to The Week. "They keep their promises this time and they treat the hostages well this time because they know that if they don't then their business will decline in the future."

That's where the private firms who provide the consulting and the insurance coverage come in: "It's a one-off transaction between the family and the kidnapper, but it's a repeated interaction for the insurance market," Shortland said."

Ransom as a (not so) repugnant transaction

The United States is revising some policies regarding dealing with Americans held hostage, e.g. in the middle east.  The NY Times has the story:
In a Shift, U.S. Includes Families in Hostage Rescue Efforts
By ADAM GOLDMANSEPT. 11, 2016

It includes the following observation:
"And while the administration has continued its policy of not paying ransoms, it has now pledged not to criminally charge families if they decide to pay one."

Kidney sales and trafficking

There have been a number of recent stories about criminal organ-trafficking rings around the world.  Here's a long quote from the one that seems most credible, from Bloomberg (in which Frank Delmonico is among those quoted), followed by links to two related stories.

Organ Gangs Force Poor to Sell Kidneys for Desperate Israelis
"Aliaksei Yafimau shudders at the memory of the burly thug who threatened to kill his relatives. Yafimau, who installs satellite television systems in Babrujsk, Belarus, answered an advertisement in 2010 offering easy money to anyone willing to sell a kidney.

He saw it as a step toward getting out of poverty. Instead, Yafimau, 30, was thrust into a dark journey around the globe that had him, at one point, locked in a hotel room for a month in Quito, Ecuador, waiting for surgeons to cut out an organ, Bloomberg Markets magazine reports in its December issue.

...

"Organ trafficking is on the rise, as desperate people seek transplants in a world that doesn’t have enough donors. About 5,000 people sell organs on the black market each year, according to Francis Delmonico, an adviser on transplants to the World Health Organization.

It’s against the law to buy or sell an organ in every country except Iran, says Delmonico, who is president-elect of the Montreal-basedTransplantation Society, which lobbies governments to crack down on illicit procedures.

‘Exploit Shortages’

“There have been successes fighting organ trafficking around the world,” Delmonico says. “But organ trafficking continues to flourish because criminals exploit shortages of organ donors.”

Bloomberg Markets reported in June that U.S. citizens and others from the Americas suffering from kidney failure were going to Nicaragua and Peru to buy organs in a shadowy trade that injured and killed donors and recipients.

That U.S.-Latin American connection is dwarfed by a network of organ-trafficking organizations whose reach extends from former Soviet Republics such as Azerbaijan, Belarus and Moldova to Brazil, the Philippines, South Africa and beyond, a Bloomberg Markets investigation shows.

Many of the black-market kidneys harvested by these gangs are destined for people who live in Israel.

...

"Delmonico, a professor of surgery at Harvard Medical School, has spent the past six years lobbying governments and doctors around the world to combat organ trafficking. He says Israel’s government is cracking down.

The Knesset, Israel’s legislative body, passed the Organ Transplant Law in 2008, setting penalties, including imprisonment of up to three years, for buying and selling organs and requiring hospitals to scrutinize transplants by nonrelatives and foreigners.

Breaking up Gangs

In an effort to draw more legal organ donors, the law also offers volunteers compensation for lost wages and travel expense and provides them with additional health insurance. Israeli police have been among the most aggressive in the world against organ traffickers, breaking up three international gangs since 2008.

The government has also banned insurers from funding most transplants outside Israel.

The dearth of available organs in Israel has spawned a new class of criminals, mainly immigrants from the former Soviet Union, says Jerusalem Police Superintendent Gilad Bahat.

Investigators on five continents say they have uncovered intertwining criminal rings run by Israelis and eastern Europeans that move people across borders -- sometimes against their will -- to sell a kidney.

“The criminal here is the middleman who profits from the sick and the poor,” says Bahat, who investigated an organ- trafficking ring in Jerusalem. “It touches my heart that people will sell part of their body because they need money to live.”

...

"The Brazilian case is still wending its way through international courts. In November 2010 in Durban, Netcare Ltd. (NTC) -- South Africa’s largest hospital company -- pleaded guilty to violating the Human Tissue Act, which prohibits buying and selling organs.

Netcare paid 7.8 million rand ($848,464) in fines and penalties. It admitted to allowing 92 transplants in which donors from Brazil, Israel and Romania sold kidneys to Israeli patients. Four doctors are awaiting trial on trafficking charges.

In Brazil, 12 people connected to the Netcare case were convicted and jailed, with sentences from 15 months to 11 years.

In Kosovo, Ratel, who has dual citizenship in Canada and Great Britain and was appointed by the European Union to help restore the country’s criminal justice system, is overseeing a pivotal organ-trafficking case. It includes participants and victims from Belarus, Moldova, Turkey and four other countries.

Center for Trafficking

The EU has administered the courts in Kosovo since 2008, the year the country the size ofConnecticut declared independence from Serbia after a civil war. Ratel, who arrived in March 2010 as part of the European Union Rule of Law Mission in Kosovo, says the country has become a center for organ trafficking.

Ratel built a case against nine doctors, hospital administrators and recruiters on charges of buying and selling kidneys for patients in Georgia, Germany, Israel, Poland and Ukraine, as well as Canada and the United States.

...

"“This is organized crime,” Ratel says. “There is significant coercion and threats of violence.”

Organ traffickers search the world for hospitals willing to perform illicit transplants. Sometimes, sellers are flown to cities just to wait for procedures, and then traffickers move them to other parts of the globe when they find a recipient and a hospital willing to cooperate.

While the illegal organ trade may be run by seasoned criminals, it depends on the complicity of doctors and hospitals, says Oleg Liashko, a member of Ukraine’s parliament.

“I doubt this could happen without the hospital and doctors knowing about it,” says Liashko, who has investigated organ trafficking and is calling for more-severe criminal penalties in organ transplant laws. “They either know or look the other way because of the money involved. This is corruption, pure and simple.”

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Here's a story that follows up on the U.S. side: Kidney Broker Said to Use Johns Hopkins in Organ-Traffic Case
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And here's a graphic (but probably less credible) story from Egypt: Refugees face organ theft in the Sinai

Market for kidnapping

The Hostage Business
"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."...

"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.”
...
"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. "
...
"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.”