Say it loud but not so proud -- no hush money here

No hush hush settlement here. This criminal fine is a small part of a total $1.6 BILLION penalty being paid by some of the big names in the global airline industry.

Northwest to Pay $38 Million Fine

Northwest Airlines has agreed to plead guilty to fixing prices on air-cargo shipments and will pay a $38 million criminal fine, the Justice Department announced Friday.

The department said Northwest Airlines Cargo engaged in a conspiracy to fix prices for shipments on routes between the U.S. and Japan from at least July 2004 to at least February 2006.

Northwest is now part of Delta Air Lines Inc.

Prosecutors said Northwest and other air-cargo shippers held meetings and conversations in the U.S. and elsewhere in which they agreed on shipping rates, in violation of federal antitrust law. The shippers also monitored and enforced each other's adherence to the price-fixing agreements, prosecutors said.

The Justice Department said 16 airlines have now pleaded guilty or agreed to plead guilty to fixing prices on air cargo, with criminal fines totaling more than $1.6 billion.

Air France-KLM paid a $350 million criminal fine in 2008, while British Airways PLC and Korean Air Lines each paid a $300 million fine in 2007.

Elsewhere, however, the article notes the hush money game continues.

In a related development this week, the parent of American Airlines agreed to pay $5 million to settle a U.S. class-action lawsuit brought by shippers who say they were overcharged by the airlines.

AMR Corp. admitted no wrongdoing and said it settled to avoid the cost of a U.S. trial.

What happens with all that money? Where does it go?

That was one of the first questions Guambat posed when he began this blog back in 2005. And he's never been satisfied that he really has a clue.

Pirates lost Russian roulette

Russian navy retakes oil tanker

The Russian navy has retaken an oil tanker that had been hijacked by suspected Somali pirates off the coast of Yemen, officials say.

At least one pirate was killed and 10 other captured. A Russian defence ministry official said all 23 crew on board the China-bound tanker, which was seized on Wednesday with $52 million worth of crude oil onboard, were alive and well following the rescue.

A spokeswoman for the tanker's owner, Novorossiysk Shipping Company, said the crew survived the 20-hour siege by hiding in a safe room that was inaccessible to the hijackers.

Russian investigators said that the captured 10 pirates would be transferred to Moscow to face charges.

The investigative committee of Russia's prosecutor general office said they would face "criminal responsibility" for the hijacking and the investigation would be conducted in accordance with Russian and international law.

Поздравляю !!

Southern PI beginning to look like Somalia

Somalian pirates and warlords do not have a lock on that activity.

Following on from the Maguindanao Province Amputuan massacre, is this coming out of
Basilan Province:

Gunmen hold dozens of Philippine villagers hostage

Mountain tribesmen rounded up children and adults during a morning raid, authorities say. The kidnappers demand the government drop all charges against a gang. Authorities said the abductions may have been a response to police attempts to arrest the leader of the gang, Ondo Perez, who has a string of arrest warrants and is connected to the massacre of a farming family.

Authorities say the two hostage-taking episodes in Basilan and Maguinddanao are not related.

As this story develops, Abu behead hostage; college VP kidnapped

Gunmen Thursday night seized the vice president of state-owned Basilan State College in Isabela City on nearby Basilan Island, a day after the severed head of a factory worker kidnapped by the Abu Sayyaf bandits was recovered near the city plaza.

Singson, said to be in his 20s, was beheaded by his Abu Sayyaf captors purportedly because of his employer’s failure to pay a ransom demand of P1.5 million.

Only on Nov. 9, the severed head of kidnap victim Gabriel Canizares was found in Jolo, Sulu. Canizares was the chief teacher of Kanagi Elementary School in Patikul, also in Sulu.

On the dilemma of a Horn

Occupying the Horn of Africa, Somalia presents some pointy problems of piracy and lawlessness that seem to defy all civil community.

The sea piracy has often been newsworthy in the last few years, e.g. these two stories from just the last few days:

Pirates now hold 70 RP sailors

Somali pirates attack two ships, hold North Korea crew hostage

Pirates Holding 11 Ships, 264 Sailors Off Somalia

Somalia: Pirates Attack Oil Tanker

Whilst Somalia does not own the monopoly on this type of piracy (e.g., this and this), and does not always get its way (e.g., this and this), it does seem to have the lion's share of the booty, and in doing so inflicts more than mere money wounds (e.g.).

And, of course, the Somali piracy does not end at water's edge:

Joy as Australian released from brutal Somali kidnapping

Emotional relatives of Somalia kidnap victim Nigel Brennan expressed joy on Thursday at his release from more than a year of brutal captivity, when he was pistol-whipped and spent months in chains.

Sister-in-law Kellie Brennan fought back tears as she recounted the family's nerve-wracking vigil since the photojournalist's capture along with Canadian reporter Amanda Lindhout in August 2008.

Australian media have said Brennan was kept in a dark room away from Lindhout and surrounded by armed men. They said he was suffering severe abdominal pains and passing blood, probably due to being fed contaminated food and water.

Speaking after her release, Lindhout said she spent her captivity "sitting in a corner on the floor 24 hours a day for the last 15 months. There were times that I was beaten, that I was tortured."

"It was extremely oppressive," she told Canadian broadcaster CTV. "I was kept by myself at all times. I had no one to speak to. I was normally kept in a room with a light, no window, I had nothing to write on or with. There was very little food."

She said the kidnappers told her that they beat her because the one million dollar ransom "wasn't coming quickly enough."

Reports also said Brennan and Lindhout had managed in January to escape and take sanctuary in a nearby mosque, only to be recaptured at gunpoint.

One kidnapper, who did not want to be identified, told AFP that a one-million U.S. dollar ransom was paid to free the pair

Notwithstanding the dramatically critiqued and re-written history of the US involvement in trying to "impart" some order in Mogadishu in the 1990's (see this and this, for starters), order, as viewed from beyond Somalia, seems incapable of gaining any traction.

But order is as order does and has done since the dawn of mankind, and the honor and code of conduct amongst thieves lives on inside Somalia in ways that both mimic and, by doing so ridicule, the structures of order elsewhere.

Bandits' ‘bourse' now up to 72 ‘companies'; backers who invest cash, weapons receive shares entitling them to a share of the booty

These scourges of the Gulf of Aden have been attracting dozens of investors over the course of the last four months, according to a Reuters returns. The burgeoning exchange, located in the coastal town of Haradheere, Somalia, started with 15 “companies” and is now up to 72 entities, the news service found.

A wealthy former Somali pirate named Mohammed told Reuters that shares in the exchange are open to all who would like to participate. Investors receive shares in a pirate company by taking part in a raid on a ship. Backers who don't want to go that far can also get shares by providing cash or weapons to the pirates. Investors are paid dividends – a cut of the ransom money.

Business has been booming.

Somali Pirate Haven Is the Ultimate Deregulated Free Market

Yes, the pirates carry weapons, but "the pirates' treatment of the hostages is relatively humane, and their reputation for turning over the ship, cargo, and crew…upon receipt of the demanded ransom has been cited as a reason for their continued success in having their demands met." Bernard Madoff doesn't appear to have shot anyone, but the fallout from his Ponzi scheme hasn't been bloodless, either. And whose word is more reliable? That off Madoff, Alan Stanford, Scott Rothstein, or the pirates?

Yes, the pirates employ coercive tactics to extract large sums of money from victims whose only fault was to be in the wrong place at the wrong time. Their haul, however, is just a fraction of what AIG and Dubai World have extracted in recent days from investors who were caught in the crosshairs of their drive-by debt-for-equity swaps. Those hapless investors—which, in the case of AIG, includes the U.S. government—had little choice but to come to terms or risk unknown global financial and economic consequences.

Somalia is about as open and as deregulated as a market can be. There are no regulations. It is a "lawless Horn of Africa nation," in the words of a gripping dispatch filed by Reuters correspondent Mohamed Ahmed, who convinced the pirates to give him guided access to their home base in the port city of Haradheere. "Somalia's Western-backed government of President Sheikh Sharif Ahmed is pinned down battling hard-line Islamist rebels and controls little more than a few streets of the capital," Ahmed reports. The administration has "no influence" in Haradheere. What market could be freer than that?

If interested, a larger history of Somalia is at these links:

The US Library of Congress Country Report

The Wiki history, starting from earliest known times

An African perspective on Somalia's history by the South African Institute for Security Studies

The UN's perspective

And a smaller history of the current situation:

Somalia al-Shabab Islamists deny causing deadly bomb


AND NOW INFLATION:

Somali pirates' ill-gotten wealth driving up prices for everyone

Yarrrr, them's be terrorists, I'm sure, me hearty

"THE coast where a cruise liner was attacked by pirates should be declared a war zone, a British maritime union said yesterday. The demand came after passengers on a ship off the coast of Somalia awoke to the sounds of gunfire as heavily armed pirates tried to get on board.

"Numast, the merchant navy officer's union, described the situation as "anarchy on the sea waves", while Kenyan maritime authorities warned pirates were getting more ambitious in their plans to loot and hijack boats. Andrew Linnington, of Numast, said: "There have been so many attacks off Somalia we are urging the war-zone declaration, and we are also urging the UK government to do something.

"We believe there should be a naval task force, particularly off Somalia, to try to stop the attacks. In ten years, hundreds of seamen have been killed and thousands injured in pirate attacks across the world." There have been 23 attacks in the area since March, including two on UN relief ships, compared with only two in 2004. According to Andrew Mwangura, the head of the Kenyan chapter of the Seafarers' Assistance Program, the pirates may be the same group that hijacked a UN-chartered vessel in June and held its crew and food aid hostage for 100 days."
http://news.scotsman.com/international.cfm?id=2205022005

While on a different planet, far, far away......

"A cruise ship with 22 Australians and an unexploded missile on board was more likely to have been attacked by terrorists than pirates, says [Australian] Foreign Minister Alexander Downer. "It's quite possible they would just have been pirates,'' Mr Downer told ABC Radio. "But they were pretty well armed, they had not just small-arms but rocket-propelled grenades. We assume they had come from Somalia and they could be terrorists,'' Mr Downer said."

"The whole thing is an extraordinary story, that it would be attacked by, we're not quite sure who at this stage, but it's possible the people who attacked the ship were terrorists," he said.

Another Guam connection

While I know for a fact that there is at least one old tobacco farmer on Guam, I didn't know that the Tobacco Road passes through there. But I learn today that a Sydney man has avoided a sentence of breaking hard rocks, butt he has been fined big time and his import business snuffed out:

"Palm Beach identity Mark Coulton has been fined more than $2 million over a series of tobacco-smuggling schemes. The NSW Supreme Court heard the former Hard Rock Cafe owner's methods to avoid paying duty on the tobacco were "sophisticated, premeditated, highly planned and involved a high level of dishonesty and deceit". Using false names, fictitious companies and fake documents, in 1999 Coulton smuggled three large shipments of Drum tobacco into the country. The first shipment, of almost 7000 pouches of tobacco, was bought by Coulton in the Netherlands and then shipped to Guam where it was repacked into boxes to look like coconut soap... Three months later he organised a second shipment, again bought in the Netherlands and shipped to Guam. The tobacco was then sent to the United States where the 9600 pouches were concealed in oil drums...." http://smh.com.au/articles/2005/09/01/1125302691923.html

Free Markets, Chinese style

This sounds like a great direct China play, and it's listed on NASDAQ. Its "principal activities are developing and providing enterprise and trade related software solution services in the People's Republic of China." (http://www.marketwatch.com/tools/quotes/profile.asp?sid=1881171&symb=nine&siteid=mktw)
It's also a good lesson about the way business is conducted in China. Seems like the Chinese government, having used the company's products, has decided to see if anyone else can provide a like-kind product that they can pass around for free. Maybe not such a great play after all. http://www.chinastockblog.com/2005/08/nine_2q05_earni.html

Dazed Trader

When something is just too good to be true -- well, we know how that usually ends. "Today, the S.E.C., the Justice Department and a court-appointed receiver are still trying to unravel what happened. Investigators now say they believe that more than $200 million of investors' money has vanished, possibly making this one of the largest hedge fund frauds ever... While the funds' managers blinded investors with records showing supposedly dazzling returns, the money was actually being frittered away in bad trades or simply stolen, according to the court-appointed receiver...." http://www.nytimes.com/2005/08/14/business/yourmoney/14hedge.html?ei=5090&en=19e9496e8b14ade1&ex=1281672000&partner=rssuserland&emc=rss&pagewanted=print