[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
GLOBAL MARITIME PIRACY:
FUELING TERRORISM, HARMING TRADE
SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
JUNE 15, 2011
Serial No. 112-41
Printed for the use of the Committee on Foreign Affairs
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COMMITTEE ON FOREIGN AFFAIRS
ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey HOWARD L. BERMAN, California
DAN BURTON, Indiana GARY L. ACKERMAN, New York
ELTON GALLEGLY, California ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
DONALD A. MANZULLO, Illinois DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California BRAD SHERMAN, California
STEVE CHABOT, Ohio ELIOT L. ENGEL, New York
RON PAUL, Texas GREGORY W. MEEKS, New York
MIKE PENCE, Indiana RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina ALBIO SIRES, New Jersey
CONNIE MACK, Florida GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas DENNIS CARDOZA, California
TED POE, Texas BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania KAREN BASS, California
TIM GRIFFIN, Arkansas WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
Yleem D.S. Poblete, Staff Director
Richard J. Kessler, Democratic Staff Director
Subcommittee on Terrorism, Nonproliferation, and Trade
EDWARD R. ROYCE, California, Chairman
TED POE, Texas BRAD SHERMAN, California
JEFF DUNCAN, South Carolina DAVID CICILLINE, Rhode Island
BILL JOHNSON, Ohio GERALD E. CONNOLLY, Virginia
TIM GRIFFIN, Arkansas BRIAN HIGGINS, New York
ANN MARIE BUERKLE, New York ALLYSON SCHWARTZ, Pennsylvania
RENEE ELLMERS, North Carolina
C O N T E N T S
The Honorable Andrew J. Shapiro, Assistant Secretary, Bureau of
Political-Military Affairs, U.S. Department of State........... 6
Mr. William F. Wechsler, Deputy Assistant Secretary,
Counternarcotics and Global Threats, U.S. Department of Defense 16
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Edward R. Royce, a Representative in Congress from
the State of California, and chairman, Subcommittee on
Terrorism, Nonproliferation, and Trade: Prepared statement..... 3
The Honorable Andrew J. Shapiro: Prepared statement.............. 10
Mr. William F. Wechsler: Prepared statement...................... 19
Hearing notice................................................... 38
Hearing minutes.................................................. 39
The Honorable Gerald E. Connolly, a Representative in Congress
from the Commonwealth of Virginia: Prepared statement.......... 41
The Honorable Edward R. Royce: Material submitted for the record. 42
GLOBAL MARITIME PIRACY: FUELING TERRORISM, HARMING TRADE
WEDNESDAY, JUNE 15, 2011
House of Representatives,
Subcommittee on Terrorism,
Nonproliferation, and Trade,
Committee on Foreign Affairs,
The subcommittee met, pursuant to notice, at 2:05 p.m., in
room 2172, Rayburn House Office Building, Hon. Edward R. Royce
(chairman of the subcommittee) presiding.
Mr. Royce. This subcommittee hearing will come to order.
Today's subcommittee hearing is entitled ``Global Maritime
Piracy: Fueling Terrorism, Harming Trade.''
And this hearing of the Subcommittee on Terrorism,
Nonproliferation, and Trade is going to look at a problem that
is not a new problem on this planet. The Romans branded pirates
outlaws of humanity, and they punished them severely, as did
the British and certainly us. In our country's early history,
we forcefully, we very decisively confronted pirate attacks off
the Barbary Coast.
But today, we face a very different situation. Today,
maritime piracy is booming without any credible deterrence,
without the type of deterrence you saw at one point in time
from the British Navy or from the U.S. fleet. As we speak,
there are 27 vessels and 449 hostages being held by Somali
pirates. We have some slides up on the monitor there, if you
would like to take a look, that tell a tale.
From 2007 to 2010, hijackings and pirate attacks increased
sevenfold. Employing mother ships, pirates now operate in a
space of 2.5 million square nautical miles, over double the
territory from just 2 years ago.
In January, a U.N. official declared, ``Pirates are
becoming the masters of the Indian Ocean.'' And the number and
abuse of hostages has increased dramatically.
More attacks and more hostages, of course, equal greater
ransom payments. The average ransom payment was $300,000 a few
years ago. Today the average is $4 million to $5 million. For
Somali pirates, crime does pay.
We should be concerned that these payments may fund al-
Shabaab, al-Qaeda's East Africa arm. We cannot be passive. As
Leon Panetta testified last week, al-Shabaab's threat ``to the
U.S. homeland is significant and on the rise.''
The United States has begun targeting pirate ring leaders.
In April, FBI agents entered Somalia. We apprehended an
individual who oversaw ransom negotiations for four American
hostages who were killed. This was a first. One pirate leader
is out the game. That is good.
Unfortunately, there are many, many more to go.
Pirate ``investors,'' as they call themselves, investors,
who back attacks, span the globe. There are pirate investors in
Europe, in the Middle East, and in Australia. Piracy has become
a vast criminal enterprise. We must track down these criminals.
The GAO has given the administration poor marks on tracking
pirate financing. That has to change.
Many navies are working to deter piracy in the Gulf of
Aden, but as Secretary Clinton recently remarked, we are not
getting enough out of it.
Too many of our partners are there to log sea time instead
of stopping pirates. That is my quote, not hers, that second
part of that, just for the record.
The pendulum between the Romans and our 21st century
treatment of pirates, frankly, has swung too far in the
direction of favoring the pirates. Extreme notions of human
rights and the rights of the accused mean today that of the 10
pirates we catch, 9 are then released.
I prefer the justice our SEALs dispensed against three
pirates 2 years ago. That is a credible deterrence. When navies
are used to forcefully take out piracy, that is a credible
The U.N. is pushing for specialized piracy courts. The
Obama administration, once opposed, is now actively considering
this proposal. I have a hard time justifying an international
justice system for pirates. But we will hear the
Lastly, it should be stressed that industry itself can do
much to prevent piracy. Shippers are often blase about ransom
payments, and it is the vessels that do not employ best
management practices that are the ones that are hijacked.
And I want everybody to think about this: Not a single ship
employing armed guards has been successfully pirated. Not one.
As we will hear, we are throwing a lot at this problem, even
putting American lives at risk. Industry has to play its part
I will now turn to the ranking member for a 5-minute
opening statement, and then we will go to other members and
then our witnesses.
[The prepared statement of Mr. Royce follows:]
Mr. Sherman. Thank you, Mr. Chairman, for convening these
I know we are going the hear excellent testimony from the
representative of the Department of Defense. I know that not
only from his reputation but from his Aunt Winnie.
I want to thank you for calling these hearings, thank our
witness for being here. I have been an advocate of burden
sharing for quite some time. I think that we undercut our
burden sharing efforts by deliberately understating the cost of
our international operations, whether they be aid or especially
In an effort to understate the cost to the American people,
we understate the cost to the world. We use the marginal cost
system of accounting for determining the cost of these
operations, and any perusing of a cost accounting book would
say that that is the worst possible system to use for
calculating cost. Full cost accounting ought to be used, and on
that basis, we are doing far more to aid those actions urged on
us by the U.N. than we currently claim credit for.
It is not cheap to maintain a military capable of
responding to piracies, tsunamis and other disasters around the
I think Secretary Gates' comments that our European allies
have not only hollowed out their militaries but are now
contemplating even greater cuts comes to mind.
When we look at global piracy, we do see some 60 nations
involved, including some that are not our traditional allies.
But there are discouraging signs, as the chairman points out.
Some 90 percent of the pirates are part of the catch-and-
release program. This is absurd. We ought to be willing to
extradite these pirates to whichever nation in the world will
treat them with the most justice. And there is universal
jurisdiction. If our European friends are unwilling to impose
penalties, that does not mean they have to release the pirates.
Piracy, of course, as I mentioned, has universal
We also ought to look at how the shipowners are behaving.
Should we be requiring armed guards? Should we be prohibiting
ransom? Or should we let them view ransom and detention as just
a cost of business?
This understates the cost of piracy. The cost of piracy is
not just the ransom. It is not just the delay. This money is
going to some of the worst people in the world who are either
killing more people on the high seas or killing more people in
Paying ransom and refusing to invest in safety is not a
business decision. And it is not a decision we should allow
businesses to make on a strictly profit-and-loss basis.
I have so much more to say, but in so many other occasions,
my opening statements have stretched the limit of the
definition of 5 minutes, and I am going to yield back for this
one time this year. Thank you.
Mr. Royce. Well, I thank the ranking member for yielding.
I will make two other brief points just for the edification
of the committee members. The Kenyan Government estimates that
30 percent of ransom payments are funneled to al-Shabaab. And
Shabaab commanders have spoken of a sea Jihad and have opened a
marine office, a marine office to coordinate with pirates.
We will go now to Judge Poe of Texas for 2 minutes.
Mr. Poe. Thank you, Mr. Chairman.
The pirates are back. These aren't swashbuckling, eye-patch
wearing pirates. These are modern-day pirates that have
automatic weapons, elaborate intelligence systems,
sophisticated money laundering network in connections to their
brothers in crime, Islamic terrorists.
One of my constituents from Texas, Bill Rouse, is an avid
sailor of the high seas, but he is just one example of the way
these pirate thugs have taken away his freedom. He, like many
other small boat owners that cross the ocean, have to get a
barge to put their ship on or their boat on to go through
The pirates are in it for the money. About 40 percent of
the world's oil is shipped through the Indian Ocean, where the
Somali pirates have had a field day. Collectively governments
spend $1 billion a year policing the pirates while the cost of
piracy to the global economy is anywhere from $7 billion to $12
The industry is growing. New reports from confirmed Somali
pirates reach all the way to the west coast of India, spanning
the breadth of the Indian Ocean. I have here a poster of some
of the recent--excuse me, Mr. Duncan--the pirate attacks in the
Indian Ocean. From Somalia to India is 2,240 miles. That is a
long way. And all of these show pirate attacks. The red are 19
months prior to October, but the blue, the most of them, are
just from October to February of this year. They are
increasing, and they are, with reckless abandon, moving closer
and closer to India.
Right now, I understand there are approximately 200 small
boat owners in Malaysia waiting to go west but can't get there
because they are afraid of the pirates. There are a couple
hundred more in the Pacific Ocean waiting to go west, but they
cannot, because they are afraid of the pirates.
Last year Somalian pirates hijacked 53 ships and a total of
1,100 hostages were held for ransom. This is increasing every
day, and they act with disregard to anyone, especially to
nations that should be patrolling the high seas.
We can take control of this situation if we have the moral
will to do so. We can lower the benefits by pirates by stopping
them from receiving money. We can raise the cost just like
Jefferson did to the pirates off the shores of Tripoli in 1801.
The Constitution actually gives authority to the United States
Government to do something about piracy, Article I, Section 8,
to define and punish pirates, piracy, and felonies committed on
the high seas. It is time the United States takes some action
and put these outlaws on the high seas out of business and send
them to Davy Jones' locker. I yield back.
Mr. Royce. Thank you, Mr. Poe.
We will go to Mr. Higgins of New York for 3 minutes.
Mr. Higgins. Thank you, Mr. Chairman.
Obviously, this is a big problem in that piracy has grown
to a multi-million dollar criminal enterprise and pirates
attack or seize ships. Ransoms now average between $4 million
and $5 million. And some 2,000 pirates operate from Somalia's
Larger pirate syndicates are becoming increasingly more
sophisticated and professional. They seize cargo ships and oil
tankers because of their huge ransom values.
Piracy thrives in Somalia for two reasons: Somalia is one
of the world's most failed states; and Somalia is a desperately
poor state, and there is huge money in pirating.
My concern also is where this money ends up. And so I look
forward to the testimony of our expert witnesses and drilling
deeper into this problem and hopefully coming up with some
With that, I yield back.
Mr. Royce. Mr. Duncan.
Mr. Duncan. Thank you, Mr. Chairman. I will be brief.
This is a real issue. I just came back where I talked with
the Pacific Command. A conversation we had was about piracy,
growing threat of piracy around the world. We had the
opportunity to talk with some folks in the Philippines about
the issue and about the Malacca Strait and how the pirates are
starting to come further and further east, as Judge Poe said,
off the coast of India and even closer to Indonesia. So I
certainly appreciate the hearing today.
I came to learn. I am a freshman Member of Congress. That
is part of the reason I went and talked with those folks about
these issues. And I look forward to hearing your testimony
today. And I yield back.
Mr. Royce. Very good. We are joined by representatives of
the State and Defense Departments today.
Andrew Shapiro is the Assistant Secretary of State for
Political-Military Affairs. He served on the Obama transition
team and, prior to that, was Senator Clinton's senior defense
and foreign policy adviser. Mr. Shapiro received a joint law
and master's in international affairs degree from Columbia
William Wechsler is the Deputy Assistant Secretary of
Defense for Counternarcotics and Global Threats, where he leads
the department's counternarcotics and threat finance policies
and operations around the world. He reports to the Assistant
Secretary of Defense for Special Operations, Low-Intensity
Conflict. Previously, Mr. Wechsler served as special adviser to
the Secretary of the Treasury on the staff of the National
Security Council as director for transnational threats.
All of the witnesses' complete written testimony we have
and have read, and will be entered in the record. I will remind
our witnesses to summarize your statements, keep it to 5
minutes, if you can, and then we will go to questions.
And we will begin with Assistant Secretary Shapiro.
STATEMENT OF THE HONORABLE ANDREW J. SHAPIRO, ASSISTANT
SECRETARY, BUREAU OF POLITICAL-MILITARY AFFAIRS, U.S.
DEPARTMENT OF STATE
Mr. Shapiro. Chairman Royce, Ranking Member Sherman members
of the committee, I appreciate this opportunity to testify
about the problem of piracy on the high seas and outline our
new approach to combat this scourge.
As all the members of the committee noted during their
opening statements, piracy off the coast of Somalia is a crime
of growing concern. The number of pirate attacks has risen
steadily since 2007. In 2010, Somali pirates captured over
1,000 sailors aboard 49 vessels. As of June 14th of this year,
400 seafarers were being held as hostages and 18 hijacked ships
were being held for ransom.
The increase in the total number of attacks has tragically
come with an increase in the level of violence against
hostages. This was displayed in brutal fashion by the killing
of the four American citizens aboard the sailing vessel Quest
Pirates are also evolving their tactics. Through the use of
mother ships and GPS technology, pirates have been able to
expand their geographic range from the southern Red Sea to the
eastern Indian ocean. Mother ships are hijacked ships used as
floating bases, which allow pirates to stage attacks hundreds
of miles from Somali coast.
A vicious cycle has formed where ever rising ransom
payments have not just spurred additional pirate activity but
have also enabled pirates to increase their operational
capabilities and sophistication.
Piracy has gone from a fairly ad hoc, disorganized criminal
endeavor to a highly developed, transnational criminal
In response, the United States has taken the lead in
pursuing a multilateral and multidimensional approach to
combating piracy emanating from the Coast of Somalia. Piracy
can only be effectively addressed through broad, coordinated
and comprehensive international efforts.
In January 2009, the United States helped establish the
Contact Group on Piracy off the Coast of Somalia which now
includes nearly 70 nations, international organizations and
maritime trade associations.
The Contact Group helps coordinate national and
international counterpiracy policies and actions. It has
galvanized action and harmonized counterpiracy policy among
participating countries and international organizations. There
is immense international concern over piracy and an increasing
willingness amongst affected nations to expand counterpiracy
efforts and increase cooperation and collaboration with the
With this multilateral framework in place, we have pursued
a multidimensional approach that focuses on security,
prevention, and deterrence.
Improving security on the seas has been a principal focus
of our efforts. As pirate tactics have grown more sophisticated
and aggressive, the international naval forces performing
counterpiracy operations have responded in kind. U.S. Naval
Forces have thwarted pirate attacks in process, engaged pirate
skiffs and mother ships and successfully taken back hijacked
ships by opposed boardings.
U.S. Naval Forces Central Command (NAVCENT) has worked with
partners to set up a 463-mile long corridor through the Gulf of
Aden called the Internationally Recommended Transit Corridor or
IRTC for short.
This transit zone has been successful in reducing the
number of attacks within the corridor, but it has had the
unfortunate side effect of pushing pirate activities elsewhere
outside of the corridor. Given the immense area in which
pirates operate, it is often impossible for naval forces to
respond in time to stop an attack. There is just too much water
That is why the United States has also focused on
prevention by encouraging commercial and private vessels to
implement industry developed best management practices. These
are practical steps shipowners and seafarers can take to
prevent pirate attacks from happening in the first place.
More flagged states are also allowing armed guards on
merchant vessels. It is notable, as the chairman mentioned,
that no vessel with an armed security team embarked has been
It is also U.S. policy to discourage the payment of ransoms
and to seek to deny pirates the benefits of any ransoms which
may be paid.
Lastly, to deter piracy, we have sought to expand
prosecution and incarceration. When suspected pirates have been
captured, the United States has consistently advocated that the
states directly victimized take on the responsibility to not
only try these suspects but to also incarcerate them if
convicted. There are more than 1,000 pirates in custody in more
than 18 countries where national prosecutions are taking place.
Taken in concert, this multilateral or multi dimensional
approach seems to have led to a drop in successful pirate
attacks. But total number of successful attacks in March, April
and May of this year was eight. This is still unacceptably
high, but it is down significantly from the 27 successful
attacks for the same 3-month period in 2010.
This is a small sample size, so we do not know for sure if
it signifies a turning of the tide or a brief aberration. But
even if these figures do point to significant progress, given
the lucrative financial incentives, pirates will likely attempt
to further adapt their approaches.
Since pirates are already adapting and expanding their
efforts, we must as well.
Earlier this year, Secretary Clinton expressed impatience
with the lack of progress against piracy and urged that more be
done to address this scourge.
After an intensive review of our strategy following the
Quest tragedy, Secretary Clinton approved a series of
recommendations which, taken together, constitute a new
strategic approach. This approach calls for continuing naval
action at sea as well as exploring nonmilitary options to
target pirate leaders and organizers ashore.
Our intention is to pursue innovative measures to maximize
all the tools at our disposal in order to disrupt the
activities of the financiers, organizer and logistics suppliers
of piracy. We are in the process of discussing our ideas for
these new lines of action with our interagency partners with an
eye toward rapid implementation of agreed measures.
The focus on network is essential. As piracy has evolved
into an organized transnational criminal enterprise, it is
increasingly clear that the arrest and prosecution of pirates
captured at sea, who are often the low-level operatives
involved in piracy, is insufficient on its own to meet our
longer-term counterpiracy goals. Pirate leaders and
facilitators receive income both from investors and ransom
payments and disburse a portion of the proceeds of ransom back
to their investors and to the pirates who actually hijack the
ships and hold the crews hostage.
We will focus in the coming months in identifying,
apprehending the criminal conspirators who provide the
leadership and financial management of the pirate enterprise
with the objective of bringing them to trial and interrupting
pirate business processes.
Already the United States has recently indicted and
extradited two alleged Somali pirate negotiators for the
respective leadership roles in attacks on U.S. vessels.
To achieve this, we are working to connect law enforcement
communities, intelligence agencies, financial experts and our
international partners to promote information sharing and
develop actionable information against pirate conspirators.
This effort includes tracking pirate sources of financing and
supplies, such as fuel, outboard motors and weapons.
Additionally an important element of our recalibrated
counterpiracy approach involves renewed emphasis on enhancing
the capacity of the international community and particularly
states in the region to prosecute and incarcerate suspected
The United States supports a comprehensive approach that
addresses concerns about incarceration and repatriation by
increasing prison capacity in Somalia, developing a framework
for prisoner transfers so convicted pirates serve their
sentence back in their home country of Somalia, and by working
to establish a specialized piracy chamber in the national
courts of one or more regional states.
Finally, we believe supporting the reestablishment of
stability and adequate governance in Somalia represents the
only sustainable long-term solution to piracy. This will
require concentrated and coordinated assistance to states in
the region, including those parts of Somali society with which
we can work, to build their capacity to deal with the social,
legal, economic and operational challenges to effective law
However, acknowledging the difficult situation ashore does
not preclude progress at sea. Through the State Department's
new strategic approach, significant progress can be made to
degrade the ability of pirates to conduct attacks and threaten
vital shipping lanes.
We should have no illusions. There is no simple solution to
modern day piracy off the Horn of Africa. But through the
shared commitment of the United States and the international
community, there is much we can do in the months and years
ahead to achieve progress against this growing challenge. Thank
[The prepared statement of Mr. Shapiro follows:]
Mr. Royce. Thank you, Mr. Shapiro.
STATEMENT OF MR. WILLIAM F. WECHSLER, DEPUTY ASSISTANT
SECRETARY, COUNTERNARCOTICS AND GLOBAL THREATS, U.S. DEPARTMENT
Mr. Wechsler. Thank you very much, Mr. Chairman,
Representative Sherman and other distinguished members of the
subcommittee. I will be brief. And one thing that I will skip
in my oral statement is a description of the problem because,
quite frankly, you all have described it extremely well and
The cost of piracy is no more visible, though, than through
the tragedy aboard the sailing vessel Quest in February. Four
Americans--Jean and Scott Adam, Phyllis McKay, and Robert
Riggle--were murdered by pirates.
Chairman Royce and Representative Sherman, I understand the
Adams were from Marina del Rey in your State. This incident is
a stark reminder of what is at stake in our efforts to fight
One thing that has been mentioned is the question of the
connections between the pirates and the revenues that they
receive and terrorists that operate in the same area. This is
an exceedingly important question.
I think it would be untrue if we were to represent to you
that we know the answer to this question or that the
intelligence on this issue is much less than any of us would
However, as we see it now, we believe that the terrorists
and the pirates are not operationally or organizationally
aligned, though there is an element of coercion that results in
pirate revenues going to al-Shabaab.
Disrupting piracy will remain challenging for several
reasons. First and foremost, as was just discussed by my
colleague from the Department of State, the root causes of
Somalia piracy lie in Somalia, in the poverty, instability and
absence of governance in that country.
Second, Somali pirates operate in an area covering
approximately 2.9 million square nautical miles. This is an
area approximately the size of the continental United States.
It is a vast amount of area that simply cannot be covered by
naval forces. Indeed, if you took all of the navies of all of
the countries in all of the world and put them against this
area, we still wouldn't be able to cover this amount of
Third, captured suspected pirates often go unprosecuted, as
has been noted, even when significant criminal evidence exists.
Many states lack the appropriate domestic laws to prosecute
pirates. Other states may have the necessary legal frameworks
but do not have the prosecutorial and judicial capacity to hold
pirates accountable. And most troubling, other states just
simply lack the political will at all to do this job.
Finally, as the members of this subcommittee know, the
Department of Defense has many other urgent priorities around
the world, particularly in Afghanistan and Iraq. In the Horn of
Africa, many of the resources most in demand for counterpiracy
activities, such as intelligence, surveillance and
reconnaissance assets, are urgently required for
These multidimensional challenges illustrate that there is
no simple solution to piracy. Most importantly, they underscore
that this problem cannot be solved by military action alone.
Let me briefly describe the Department of Defense's role.
Our primary role is to interrupt and terminate acts of piracy.
We also play a supporting role in reducing the vulnerability of
the maritime domain and facilitating the prosecution of
On average, United States has two to four vessels
participating in counterpiracy operations as part of Combined
Task Force 151 and NATO's Operation Ocean Shield. Combined Task
Force 151 is a component of combined maritime forces which
regularly host international coordination meetings to share
information and deconflict regional counterpiracy efforts.
The Department of Defense also is in support of the
Departments of State and Treasury in efforts to track the
finances and make this criminal activity less lucrative.
Mr. Chairman, I know that you have long and deep history in
the efforts of the executive branch to combat threat finance
and many other areas, and this is an area in which we all are
committed to doing much more.
Through our interagency partners, DOD will continue to work
with regional states to develop their capacity to patrol the
seas and enhance their prosecutorial and judicial capabilities.
While much remains to be done, as Assistant Secretary Shapiro
has noted, we are seeing concrete results already from our
Since August 2008, international efforts have led to the
destruction or confiscation of more than 100 pirate vessels and
numerous weapons, including small arms and rocket-propelled
grenades. The international community has also turned over
approximately 1,000 pirates to various countries for
From the Department of Defense's perspective, when we have
the opportunity to act, we do act. But given the trends that
you all described, it is, again, clear that military action is
As you noted, one of the--I will just close by noting that
one of the very key elements in our strategy has to have a more
effective shared responsibility with industry. Effectively
countering piracy, the single most effective way to deter
piracy in the short term is to make the vessels harder to
attack successfully. There was a time a couple of years ago
where there was some debate on this question. Best management
practices, which range from hardening the vessel to maintaining
professional civilian armed security teams on board, can thwart
the majority of pirate attacks without the need for military
I would underscore, as you did, Mr. Chairman, that no
vessel that has implemented best management practices and has
armed private security teams aboard has been successfully
pirated. Indeed, just last month, at least six attacks were
halted after embarked security teams engaged pirates.
Thank you very much for inviting me to this hearing. I look
forward to your questions, sir.
[The prepared statement of Mr. Wechsler follows:]
Mr. Royce. Thank you, Mr. Wechsler.
One of the things that hasn't changed is the vastness of
the ocean. The reason we established the U.S. Navy, arguably,
the reason put forward by Jefferson had to do with pirate
attacks off the Barbary Coast. And so what has changed over
time is our rules of engagement.
And I know this is a debatable point here in the U.S. and
in the U.K., but Mr. Shapiro, in a speech last year, you said,
``We have to apply 21st century standards of evidence, human
rights, and other legal protections'' to the piracy problem. We
are aware of the debates on the engagement between the way the
British and the U.S. handle this and the way that the Russians,
for example, and the Indians handle the piracy problem.
There has not been one pirate who has taken a Russian
seaman who has lived the tell the tale. And the Indians engage
the same way.
The Indian Navy, they take these ships to the bottom of the
A few weeks ago, I think it was, I read about a German
warship that engaged two attack skiffs and sunk them but
allowed the mother ship to return.
So the rules of engagement are different between different
navies. And I think one of the questions we wrestle with, and I
know reading--I have seen legal commentary put forward, that
the U.N. Security Council resolutions, which were issued under
Charter 7 of the U.N. Charter, should serve as sufficient legal
justice to kill pirates on the high seas. And you have legal
scholars calling for targeting, selective targeting of pirate
leaders, just as we do with al-Qaeda, with terrorist leaders in
Yemen or in Pakistan.
So, why not take this approach, Mr. Shapiro? I mean, we can
revisit your commentary on this and sort of reopen this debate.
Mr. Shapiro. Well, thanks for that question. I think the
quote you were referring to is, I was quoting Secretary Clinton
saying that we needed 21st century solutions to a 19th century
problem. And that meant more broadly, we need to use all the
tools at our disposal.
Mr. Royce. Let me quote you exactly, ``We have to apply
21st century standards of evidence, human rights, and other
legal protections'' to the piracy problem. That is sort of the
Mr. Shapiro. I think a couple of issues, first, from our
perspective, our ability to gain international support for
addressing piracy will require us to treat in a manner
consistent with the rule of law.
Secondly, when you talk about targeting pirates on the high
seas, it is important to prosecute those we catch. But what is
more important is to target the pirate facilitators because
there is an almost innumerable number of young pirates who are
willing to be recruited to go out on the high seas and take
their chances, given their life in Somalia.
It is the facilitators and the people who profit from this
that we need to target, and that is what our approach is going
to start to do.
We have already brought back two facilitators back to the
United States for prosecution. And I think that in order to
continue to get the level of international support that we need
to make further progress, that is the right approach.
We continue to build cases against them, as we have done
against other organized crime groups, such as drug cartels,
build the cases, bring them back for prosecution, and in that
way, we can disrupt the pirates from being able to get the
funding that they need to go out to sea.
Mr. Royce. You know, it is an interesting question. I
remember the debate in the State Senate over the use of lethal
force, which is what we are talking about here, as well, in
California. The question was--and it actually prevailed at the
time--the question was, could you use lethal force if someone
was attacking you, coming into your home, robbing your home,
invading your home, could you use lethal force? And the
decision in the State Senate and the Assembly was, yes, you
And clearly, the conclusion that has been reached in
Germany, India, Russia, is that they are going to use lethal
force in engagements with pirates.
Mr. Shapiro. Well, in India, they did use lethal force to
free their ship, but they also brought back many of their
pirates for prosecution in India.
And I would say, Secretary Clinton has expressed a desire
to make progress. She has expressed an openness to entertaining
ideas regarding addressing the pirate problem on shore.
But at the end of the day, if we are to target these
networks, it will be important to build cases and develop
information, and that means you bring in one pirate
facilitator, and then he rolls up the next one. And then you
bring in the next one and work your way up the chain to the
highest levels. So these require long, complicated cases. But
at the end of the day, if we are going to disrupt these
networks, we are going to have to target the appropriate
people, bring them back, get them to turn on their higher ups
and continue to make progress in disrupting these
Mr. Royce. Mr. Sherman. Thank you.
Mr. Sherman. Mr. Shapiro, the State Department has to often
decide, do they want to be popular with the diplomats from
Europe, or do they want to serve the interests of the American
These ships, 99.9 percent of them, are foreign ships. They
are not U.S. ships. They are not U.S. crews. We don't get the
jobs, and most of that cargo isn't headed to the United States.
And yet these are foreign shipowners, making foreign
Do we charge any fees for protection for any of these
ships? Or do we bear the cost at the cost of the U.S. taxpayer?
Mr. Shapiro. We do not charge fees.
Mr. Sherman. And so we will use the marginal cost system to
say that this is only costing us hundreds of millions, but it
is actually costing us billions, a gift to foreign shipowners.
You say that punishing the rank and file pirates doesn't
matter; I think, yes, there are a large number of Somalis who
are willing to become rank and file pirates, but that is
because they don't get punished. If you create a high level of
mortality among these rank and file pirates, that will be
But now let's turn to the real rip off of the U.S.
taxpayer, and that is these shipowners. They don't want to told
to put armed guards. That costs them money. They would rather
have U.S. taxpayers pay money. They don't want to be told, only
go through in convoys. That costs them money. They want our
What are you doing to say, we are going to shift the costs
to the shipowners, we are going to require armed guards, and we
are going to require armed convoys?
Mr. Shapiro. Well I would say for U.S. ships, you know, the
Mr. Sherman. None of these are U.S. ships, sir, so why
don't you talk about the real ships?
Mr. Shapiro. Well, obviously, we are working through the
Contact Group and through our international partners to
We, as a matter of policy, have made the decision that for
U.S. ships, we will permit it. A number of other states
actually ban it. Some ships have moved their flag states
because their governments will not allow them. And we are
working through diplomatic channels to change that attitude.
Mr. Sherman. So as long as it is in the interests of the
shipowners and the Europeans, so that the shipowners don't have
to bear the cost of having armed guards and the shipowners
don't have to bear the cost of going in convoys, we will be
there with U.S. taxpayer money to support these shipowners?
Mr. Shapiro. Well, I think we are there with U.S. taxpayer
money because it is in our own interests. As we saw----
Mr. Sherman. It is in our interests to bear the costs that
should be borne by those foreign shipowners?
Mr. Shapiro. Well, it is in our interests as we saw, you
know, we had four Americans who were brutally murdered by
pirates. We have U.S. ships that have had been attacked by
pirates. So it is--there is----
Mr. Sherman. And if these ships were all required to go in
convoys, those Americans would be alive, and the costs for
corporate shipowners would be higher. Is that correct?
Mr. Shapiro. In terms of--probably, that, I believe that is
an accurate statement. But I am not an expert on what the
shipowners think their costs are.
But I would say, certainly we have been disappointed. And
Secretary Clinton has testified that she has been disappointed
that the shipowners have not taken more responsibility, and
that is going to be a focus of our efforts going forward is to
Mr. Sherman. I serve on Financial Services, where we get a
chance to bail out rich corporations with U.S. taxpayer
dollars. We rarely get the opportunity to discuss that in this
room. But these are multi-billion dollar private corporations
who don't want to bear the costs. They don't want to bear the
inconvenience. They don't want to pay for armed guards. They
don't want the inefficiency of having to go in convoys, and
they are willing to operate that way because they are
subsidized by free security offered by the U.S. taxpayer.
I would say it is time for us to condition our protection
of these ships on them either paying the fee or bearing the
cost. And if U.S. ships are in the area, we could organize
convoys. But bailouts happen, apparently, in the jurisdiction
of both of my committees.
Mr. Shapiro. I would make two points.
First, we have seen more and more shipowners adopt the
practice of armed security teams. Indeed, that is why we think
there has been less success over the last 3 months, is that
greater adherence to best management practices.
The problem is that the small number of ships that don't
follow best management practices are responsible for the vast
majority of those that are actually pirated. So the question
is, what do you do about those? And we need to work with the
shipping industry to put financial pressure and incentives on
those who are not following best management practices and
leading to this problem to take further action.
Mr. Sherman. I would point out that the U.S. Navy is
capable of detaining those ships that are acting in a way that
is hazardous to their crews, promoting piracy, putting
themselves in a position where they are going to need a naval
bailout. And for these ships not to be willing to have armed
guards and/or convoys and for us to sit back and say, okay, we
will defend you, is bailout foreign policy.
I yield back.
Mr. Royce. Mr. Duncan, I have an amendment on the floor. If
you will continue to chair and handle the panel here, I will
try to return after it is taken up.
I think you are next, Mr. Duncan.
Mr. Duncan [presiding]. Thank you.
I recognize myself for 5 minutes.
I believe that the presence of U.S. Naval vessels in the
region are a definite deterrent and meeting with Admiral Papp
with the Coast Guard recently and learning that the U.S. does
have a strong presence there with the Coast Guard is
But I think it was French philosopher Pascal that said a
police force without force is impotent.
And I believe that if we don't have a presence there--I
think you mentioned earlier that the Germans and the Russians
and the Indians even use more force in dealing with the Somali
pirates, and I would be willing to say their vessels are
probably the least pirated. So I would love to see that.
I want you to, if you will repeat, did you say that you
would encourage security forces on U.S. flag vessels?
Mr. Shapiro. Well, the Coast Guard requires either an armed
or unarmed security team for U.S. flag vessels. We have not
taken a position on whether to encourage them to be armed or
unarmed other than to note that armed vessels have not been
Mr. Duncan. Okay. And that is good.
Mr. Wechsler, you noted that you didn't see a meaningful
connection between the pirates and other violent extremist
groups, and we are all concerned about money going to the
extremists and the jihadists that are wanting to continue to
wage this war against freedom.
But there been meaningful reports that multi-million dollar
ransoms have become a source of funding for Somali based
terrorist groups al-Shabaab, and they have reportedly taxed
Somali pirate ransoms. The Kenyan Government estimates that 30
percent of ransom payments are funneled to al-Shabaab.
Could you comment on that? And does the Kenyan Government
have it wrong?
Mr. Wechsler. Sure. Let me make sure that I am clear.
I want to make two points about what I can say in this
session, and if you want to get together in a closed session,
one on one, I am happy to give a full intelligence brief on
this as well.
What we don't believe, what we don't see yet is operational
or organizational alignment between the piracy, the pirates
themselves and al-Shabaab. They are not the same organization.
Mr. Duncan. No direct connection then?
Mr. Wechsler. It is not no direct connection, but they are
not the same organization; they are not operationally or
What we do believe that we see some evidence of is
coercion. So these are competing organizations, and al-Shabaab
sometimes coerces the pirates into giving some revenues to
them. That is, again, with all the caveats that I said
previously about the limits of our intelligence right now, that
is what I can say in this open session.
Mr. Duncan. Thank you.
The chair will recognize the gentleman from New York 5
Mr. Higgins. Thank you, Mr. Chairman.
United States Special Forces killed three Somali pirates in
2009 and freed captain Richard Phillips. In that there are
dozens of ships being held off the coast of Somalia and some
300 to 500 merchant sailors, why aren't other countries taking
unilateral action against these pirates in the Gulf of Aden?
Mr. Shapiro. Well, each country makes its own decisions
about how they will address their pirated vessels.
We have, as was noted earlier, certain countries have
become more aggressive in addressing their pirated vessels
where their citizens have been captured and their ships have
been captured. India was mentioned; South Korea, and others.
Ultimately, because often these vessels have hostages, each
case is unique. Each case has its own particular factors which
require the Navy ship on scene to make a determination as to
whether it is, the risk is worth taking kinetic action against
those ships. So there is no hard and fast rule. Each is unique,
based on each particular circumstance.
Mr. Wechsler. I think I can best describe what we do, and I
also want to make sure that this point is clear for this
committee, because it is quite an important point about our
rules of engagement. We are constantly assessing and
reassessing our rules of engagement. Again, the specific nature
of our rules of engagement is something that I would be more
than happy to discuss in a closed or one-on-one session with
But I am very comfortable with the rules of engagement as
they are now. They are very well balanced. We are constantly
assessing them. They have been changed as a result of the
changing dynamic. That I can say in this session.
And one thing I would just point out is, as recently as
last month, May 16th, the USS Bulkeley responded to a mayday
message from the Artemis Glory, which reported that it was
being attacked by pirates, launched an SH-60B helicopter. Upon
its arrival, under the principle of extended unit self defense,
which is allowed in order to provide protection to the crew,
the helicopter engaged the pirates. All the pirates are
believed to have been killed.
So I do want to make clear that some of the distinctions
that folks may be referring to between what we do and what some
other countries do, we have very robust rules of engagement,
and when appropriate, we can act, and we do act.
But I do want to go back, again, to what I said in my
opening statement; the full solution to this problem will not
be addressed by military means alone. It will be addressed by
some of the other nonmilitary elements that we have also been
Mr. Higgins. Just a final question. Are there concerns
along the Gulf of Aden and the Horn of Africa that this problem
is expanding to areas beyond Somalia?
Mr. Shapiro. Thus far, we have not seen it. Obviously, the
ships coming from Somalia are moving further and further out
into the Indian Ocean. But in terms of pirate havens, typically
that takes place, as we have seen in Somalia, in a failed state
environment. So we have not seen this tactic spreading
elsewhere in the region. However, we are concerned that the
number of--that the ships are extending their range to cover a
broader area of the Indian Ocean.
Mr. Higgins. Okay.
Mr. Wechsler. Somalia is a special case. In some parts of
the world, it is--and going through history, some of which has
been mentioned before, piracy, including back in the early
1800s, was, in effect, a state-sponsored activity. There was
somebody making a decision to do this. And in fact, at that
point, a huge proportion of the U.S. Treasury was going to pay
tribute to the pirates in Tripoli because it was a state-
In other places, where there was a--where it is nonstate
activities, it is much more geographically focused, as it has
been in the Straits of Malacca. Here you have the combination
of a vast geographic area and no state, in large case, to
organize this, and so a sanctuary for the pirates. So this is
the combination of both of these situations for the worst-case
Mr. Duncan. The chair now recognizes the gentlewoman from
North Carolina, Ms. Ellmers, for 5 minutes.
Mrs. Ellmers. Thank you. Thank you gentlemen for being here
Mr. Shapiro, I have a question. We have talked a lot about
the Somalian pirates, and U.S. officials, yourselves,
acknowledge the fact that we need to be doing more to alleviate
One of the areas, of course, is targeting and following the
monetary flow of ransom and the moneys that are being paid. In
a recent meeting of the International Contact Group, they did
discuss mapping and following the money. But the group was put
together in 2009. This seems like a pretty commonsense
Why is it taking this long to prioritize that and to take
Mr. Shapiro. I will say, as you mentioned, the Contact
Group was set up in 2009. And initially, it was starting from
scratch, and it was focusing on building prosecutorial
capacity, working on what and how to work, how the
international community should coordinate on this issue.
As we learned more, as we learned how the pirates operate,
it has become apparent that in order to be successful, we will
need to target the financial flows.
There has been a learning curve for the international
community, no question about it.
But now we have ascended that learning curve. And we in the
United States Government, at the State Department, we have
begun to devote resources into how to crack this. We are going
to work with our interagency partners, and the Contact Group is
talking about setting up a fifth working group on financial
flows, so that we can work together with the international
community which will be essential.
Mrs. Ellmers. Mr. Wechsler, kind of along the same line of
questioning here. Basically, you have pointed out that the
Department of Defense is working with the International Contact
Group with the aim of pursuing criminals who are funding
pirates, demanding ransoms, and laundering the illegal proceeds
from ransom payments. In your opinion, how can this best be
Mr. Wechsler. The Department of Defense has learned a lot,
has been forced to learn a lot about this question in Iraq and
Afghanistan where, we have confronted and are confronting an
irregular adversary with independent sources of revenue through
criminal means. The best way to go about this and the way that
I know my colleague from the Department of State would agree is
to use all the tools available to government in a coordinated
campaign effort to go against the financiers on a counter
You have to be able to map the networks. You have to be
able to identify the right nodes, and then you have to be able
to identify which tool of the U.S. Government is best suited to
go after the nodes to have--what kind of effect that you want
to have, whether it is military activity, whether it is
intelligence activity, it is law enforcement activity, whether
it is sanctioning activity. That is the way that we have found
in other contexts the ability to have some strategic impact.
Mrs. Ellmers. Thank you.
And I yield back my time.
Mr. Duncan. Thank you.
I am going to reserve some time for myself to ask another
question for Chairman Royce. The Somali piracy is essentially
an international criminal enterprise, and the GAO found that
the information on private finances collected by various U.S.
Government agencies is not being systematically analyzed and is
unclear if any agency is using it to identify and apprehend
pirate leaders or financiers. How are you correcting this?
Because we have had practice with organized crime and
terrorism, this is where we can truly have a strategic impact
it would seem. So the question is, how are you correcting this?
And that is for either one.
Mr. Shapiro. As I mentioned, the State Department is
coordinating interagency efforts to identify the most effective
means of disrupting the financial flows of piracy and targeting
Mr. Duncan. Would that be the Contact Group?
Mr. Shapiro. Yes. We will work both in our Government, as
well as with international partners. And through our
international partners is with the Contact Group. So we will be
working--you know, there are a number of agencies throughout
the U.S. Government, the Department of Treasury, Defense, DEA,
FBI, as well as the intelligence community. We will also be
working with INTERPOL and through our law enforcement contacts.
So we do acknowledge that we need to do a better job on
this--no question about it--that we need to focus on financial
flows and that we need to devote the resources that are
necessary in the U.S. Government to better track financial
Mr. Duncan. When you say we will be working, I understand
that the Contact Group was established over 2 years ago and
with the things going on in the world, it would seem like this
element would be prioritized.
Mr. Shapiro. And indeed, there was a recent meeting, as the
Congresswoman mentioned, to talk about this issue at the
Contact Group. And the goal was to set up another working group
to focus on financial flows. So there is great interest in the
international community. And I have talked with a number of our
international partners who are greatly interested in working
with us on tracking financial flows.
Mr. Duncan. As you can see, I am the last one here. So let
me take this opportunity to thank the panelists for being here.
If any of our subcommittee members or committee members have
written questions, they will be submitted, and we ask you to
timely return those. And since there is no other committee
members here, we will stand adjourned. Thank you.
[Whereupon, at 3:04 p.m., the subcommittee was adjourned.]
A P P E N D I X
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