Fighting Stream Of Terrorist Capital, Kenya Cracks Down On Somali Businesses
U.S. counterterrorism efforts include choking off the flow of cash to extremists, and urging friendly countries to help. But in Nairobi, Kenya, suspicion of Somali money — and an increase in terrorist attacks — has prompted a country-wide crackdown, with Kenyan police accused of extortion and arbitrary arrests of thousands of Somali refugees.
But how do you tell the difference between tainted money and honest cash?
Take Eastleigh, a neighborhood in the Kenyan capital, Nairobi.
Depending on whom you're talking to, the Eastleigh market is either a tangle of back alleys where Islamist terrorists and pirates go to launder money, or it's one of the brightest spots of African capitalism, a dynamic 24-hour shopping center that's the only place for hundreds of miles where you can buy new jeans and sneakers at 2 in the morning.
Part of the reason Eastleigh attracts such investment, and such suspicion, is that Somalis make up the majority of people doing business there.
"When you come to Eastleigh, you feel that you are in Mogadishu or in other parts of Somalia, so you don't feel that you are an outsider," says Mohammed Shakul. "You feel at home."
Parallel Financial System
Shakul was born in Mogadishu, but he fled the war in his country in the 1990s and managed grocery stores in Nashville, Tenn. Seven years ago, he moved to Kenya and opened a hotel in Eastleigh aimed at other American Somalis and British and Canadian Somalis who like him want to come to the Kenyan capital and invest the money they've saved up in immigrant jobs as taxi drivers and shopkeepers and airline stewards.
Shakul also manages another hotel, two shopping malls and three housing complexes and is in the process of building four more. How did Shakul raise enough cash to go from running grocery stores in Tennessee to managing a minor Kenyan real estate empire?
He did not walk into a bank and fill out a loan application. Rather, he made a few phone calls: to a second cousin in London, a brother-in-law's uncle in Dubai.
"This money, mostly it came from Somalis in the diaspora and also local here, and it's based on trust," he says. "I know you ... you're related to my mother's uncle or so on."
Known as amanah, it's a system for raising and moving money through clan networks, and it's about as old as the nomadic Somali people. And it's informal: Shakul called up relatives, explained the details, they were in or out. No courts, no contracts.
That's just the beginning of the problem for counterterrorism experts like Juan Zarate, former assistant secretary of the Treasury for terrorist financing and financial crimes under George W. Bush.
"These are networks that run parallel to the formal financial system, based on trust," Zarate says. "The question becomes when those very networks have been used by groups like al-Qaida."
In some instances, that happens without anyone in the trusted circle knowing that terrorists are using their money.
$2 Billion Of Somali Funds
Parselelo Kantai is the East Africa editor for The Africa Report.
"The Kenyan government started to actively question what is the nature of this money," Kantai says. "And part of the questioning was motivated by the American counterterrorism push in East Africa."
He says what a Kenyan audit uncovered was $2 billion being quietly piped into Eastleigh through Somali channels — this in a year when Kenya's total GDP was about $40 billion.
"In this way, the Kenyan government began to understand the size of Somali capital. And one of the reactions, and this is a natural reaction from any government, was absolute panic," Kantai says. "It's like, how is it possible, that there is this kind of money, floating about, and we don't know about it?"
He says Kenya's reaction did not have to be one of fear — it did, after all, discover that its economy was 5 percent bigger than originally thought.
But this was in 2009, when Somali pirates were claiming multimillion-dollar ransoms. And in 2010 the radical Somali group al-Shabab declared jihad on Kenya with terrorist attacks.
Crackdown Begins
It wasn't too long before the Somali business people in Eastleigh began to be seen as a collective national security threat.
Rukia Abdi Hadele used to sell kids' clothes from her kiosk in Eastleigh. Police confiscated her inventory, saying she didn't have the right to sell because she wasn't a Kenyan citizen.
"I was a good-living person," she says. "Now I feel helpless and hopeless."
Hadele's problems really started this December, when the Kenyan government announced that all refugees in Nairobi — at least 50,000 people — would be rounded up and driven to refugee camps or deported. That included refugees who were legally operating shops, paying taxes and employing Kenyans.
Three days earlier, two policemen showed up at Hadele's house.
"I was fearing. I'm a single mother; I didn't know what to do," she recalls.
Hadele says she prepared her documents and opened the door. The police demanded she identify herself.
So she showed the police her ID, a refugee paper stamped by the U.N. The police told her she had to show them Kenyan citizenship or they were taking her to the police station.
What about my children? Hadele asked.
"They said, 'We're not interested in your children. Bring money.' Which I told them I don't have," Hadele says. "Then they said, 'If you don't have money, and you don't have an ID card, then we need you as a woman.' "
Hadele screamed, and a neighbor scared off the cops, who probably knew what they were doing was illegal. A Kenyan court has banned the government from relocating refugees, for now, as a violation of international law.
'Wherever The Money Is, We'll Go'
But ever since the government announced its intention to relocate people — and ever since Eastleigh began to be seen less as an economic boon and more as a terrorist den — Kenyan police have been accused of arbitrary arrests and abuses against the Somalis living in the area.
And the 24-7 shopping mecca is now a lot more quiet. Rents are down. Thousands have fled. Shakul says his hotel used to have a waiting list; now it's half empty.
Although business is down, Shakul is nothing if not an optimist. He thinks Somalis will once again feel at home in Kenya, maybe when tensions ease after the presidential elections in March. But, he says, if it is time for him to pack his bags, that's OK.
"We are a nomadic business culture," Shakul says. "Wherever the money is, we'll go with it. We'll follow the honey just like the bee."
Following the honey, in this case, may lead him back to the place he was born. Mogadishu is experiencing its first real security in two decades. And the real estate market there is booming. Shakul might have occasion to make a few more phone calls.
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Transcript
DON GONYEA, HOST:
This is WEEKEND EDITION from NPR News. I'm Don Gonyea, in for Scott Simon. We're going to spend some time in Africa in this part of the program. Coming up, we'll have the latest on the murder case involving South African Olympian Oscar Pistorius. First, we go Kenya. Kenyan authorities have been targeting Somali immigrants in one of Nairobi's most bustling commercial districts and sending them to refugee camps along the Somali border. The reason? They believe some Somali shop owners may be laundering money from extremists. But it's not easy to tell the difference between tainted money and honest cash. NPR's Greg Warner reports.
GREG WARNER, BYLINE: Depending on who you're talking to, the neighborhood in Nairobi known as Eastleigh is either a money laundering pit stop for global terrorism, or one of the brightest nodes of African capitalism, a 24-hour shopping mecca attracting traders across the continent that is apparently the only place for hundreds of miles you can buy new jeans and sneakers at two in the morning. And part of the reason that Eastleigh invites such investment and such suspicion is because of the ethnic group that makes up its majority.
MOHAMMED SHAKUL: When you come to Eastleigh, it is like you are in Mogadishu or other parts of Somalia, OK. You don't feel an outsider. You feel that you are at home.
WARNER: Mohammed Shakul was born in Mogadishu. And like millions of other Somalis, he fled the war in his country in the '90s. He ended up in Nashville, Tennessee managing grocery stores. But seven years ago, Shakul left the grocery store business, left Nashville and moved to Nairobi. He launched a hotel he says blends Western hospitality and Somali culture. It's aimed at people like him who want to come here to invest the money they've saved up in immigrant jobs as taxi drivers and shopkeepers and airline stewards.
SHAKUL: This is a place that may you most likely find your friend from Minnesota. OK. You may find him next door room all of the sudden. And that happens a lot.
WARNER: Shakul also manages another hotel, as well as two shopping malls, three housing complexes and various stages of building four more. Which raises this question: How did he raise enough cash to go from running grocery stores in Tennessee to managing a minor Kenyan real estate empire? Well, here is what he did not do. He did not walk into a bank and fill out a loan application. Rather, he made a phone call - actually a couple phone calls. First, maybe to a second cousin in Dubai, then a brother-in-law's uncle in London.
SHAKUL: This money, mostly came from Somalis in the diaspora and also local here, and it's based on trust. I know you. You're related to my mother's uncle or so on.
WARNER: It's a system known as amanaah for raising money through tribal networks. It's about as old as the Somalis themselves, who were nomads and had to move money from place to place. It's very informal. Shakul would call up these distant relatives and say, hey, I want to buy some property in Nairobi. Here's how it'll work and how much it'll cost. And do you want in? No courts, no contracts.
SHAKUL: Not much legal paperwork, which - unfortunately, Somalis don't like taxation, the legalities, and all these things.
WARNER: And all these things are just the beginning of the problem for counterterrorism experts. Juan Zarate was, under George Bush, assistant secretary of the treasury for terrorist financing and financial crimes.
JUAN ZARATE: These are systems that exist as parallel to the formal financial system, rely on trust. We've also seen evidence that those very networks have been used by groups like al-Qaida.
PARSELELO KANTAI: The Kenyan government started to actively question the nature of this money. And part of the questioning was motivated by the American counterterrorism push in East Africa.
WARNER: Parselelo Kantai the East Africa editor for Africa Report. He says what those questions uncovered was $2 billion being quietly piped into this little neighborhood of Eastleigh through Somali channels. To put this in context, this in a year when the total GDP for the country was maybe $40 billion.
KANTAI: In this way, the Kenyan government began to understand the size of Somali capital. And one of the reactions - and this is a natural reaction from any government - was absolute panic. It's like, how is it possible that there is this kind of money floating about and we don't know about it?
WARNER: He says Kenya's reaction did not have to be one of fear. Imagine you're a developing country, you just discovered your economy is 5 percent bigger than you thought it was. But this was in 2009, when Somali pirates were claiming multimillion-dollar ransoms. And in 2010 the radical Somali group Al-Shabaab declared jihad on Kenya with suicide attacks. So, it wasn't too long before the Somali businesspeople in Eastleigh began to be seen as a collective national security threat.
RUKIA ABDI HADELE: (Foreign language spoken)
WARNER: Rukia Abdi Hadele used to sell kids' clothes from her kiosk in Eastleigh. Police confiscated her inventory, saying because she wasn't a Kenyan citizen she didn't have the right to sell.
HADELE: (Through Translator) I was a good living person. Now that has been reduced. I feel helpless and hopeless.
WARNER: But Rukia's problems started in earnest this December, when the Kenyan government announced that all refugees in Nairobi - that's at least 50,000 people - would be rounded up and driven to camps or deported. Even the refugees that were legally running shops, paying taxes, employing Kenyans. In fact, three days before I met Rukia, two policemen actually showed up at her house in the evening.
HADELE: (Through Translator) And they asked me open. I was fearing. I was a single mother. I didn't know what to do and what they can do to me. Then I decided I prepared my documents and I opened. Then they asked me: identify yourself.
WARNER: So, she showed the police her ID, which is a piece of paper signed by the U.N. saying she's a legal refugee with the right to be in Kenya. But the police told her, no, she had to show them Kenyan citizenship or they were taking her to the police station.
HADELE: (Through Translator) I said if you take me there, then who will I leave my children with? Let's all together move with my children if you'll take me in just because I don't have a Kenyan ID. Then they said we are not interested in your children. Bring money, which I told them I don't have. Then they said if you don't have money and you don't have an ID card, then we need you as a woman.
WARNER: That's when Rukia screamed, and a neighbor scared off the cops, who probably knew what they were doing was illegal. Not just the request for the bribe or the threat of rape, but even Rukia's supposed crime. A Kenyan court has temporarily blocked the government's plan to relocate refugees, saying that violates a half-century of international law. But here's the thing: ever since the government simply announced its intention to relocate people, that is, ever since Eastleigh began to be seen by officials less as an economic boon and more as a terrorist den, Kenyan police have been accused of arbitrary mass arrests and terrible abuses and extortion. And as you can imagine, this 24/7 shopping mecca is now a lot more quiet. Rents are down. Thousands have fled. Mohammed Shakul says his hotel used to have a waiting list, now it's half-empty.
SHAKUL: So this has affected negatively, substantially, the businesses in Eastleigh.
WARNER: Now, Shakul is nothing if not an optimist. He thinks Somalis will once again feel at home in Kenya. Maybe when tensions ease after the presidential elections next month. But, he says, if it is time for him to pack his bags, well, Somalis are nomads.
SHAKUL: It's a nomadic business culture. Wherever the money is, we'll go with it. You know, we'll follow the honey just like the bee.
(LAUGHTER)
WARNER: Following the honey, in this case, may lead him back to the place he was born. Mogadishu is experiencing its first real security in two decades. And the real estate market there is booming. He might just have to make a few phone calls. Gregory Warner, NPR News, Nairobi. Transcript provided by NPR, Copyright NPR.
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