>>The Pirates' Toll: Part 1
>>The Pirates' Toll: Part 2
>>The Pirates' Toll: Part 3
When James Christodoulou received the phone call ( "area code: Somalia") while driving on the New Jersey Turnpike -- the one in which the caller accused of him of working for the mob and dumping toxic waste into Somali waters -- he was speaking for the first time to Abbas, a new negotiator. Hussein, the one he had spent the last few weeks attempting to disarm, had evidently been fired. Christodoulou wouldn't learn the reason why until much later, until he had a chance to speak to the Biscaglia's crew after the ship's release. Hussein's bosses -- the clan "elders," or whomever headed this particular band -- felt that Hussein had become too soft in his negotiating style, that perhaps he had shown too much sympathy toward this group of Indian captives. Hussein, evidently, had come down with a case of Stockholm Syndrome.
In his hotel room in Bombay that night, Christodoulou spoke to Abbas, the pirate negotiator. He'd brought the football with him to India. Through the entire ordeal, he was never far from Somalia. Reflecting back, Christodoulou describes his relationship with the pirates as a "sick codependency." Both pirate and owner "are held hostage." Everyone involved understands, in other words, that the ship and the cargo are, at bottom, worthless to the Somalis. What could they do with 25,000 tons of palm oil? Two million barrels of oil? A panamax-size load of coking coal? In Christodoulou's words, "It's the crew that's the real thing of value." He says, "The pirates can't go anywhere else, because no one else is going to pay them for what they've got. So they're held captive to me. And I'm held captive to them because I can't say, 'F--- you. I don't want to do this deal,' and walk way. No one can walk away from it. But because no one can walk away from it, it tends to have a 100% resolution rate." Before Christodoulou and his pirates could break their codependency, frightening moments accrued. While he tried to hold pat and not cave by sweetening the ISEC counteroffer, threats, both subtle and unsubtle, began to come down from the stronghold at Garacad. Even Hussein, the relative sweetheart, caused anxiety. The parties sometimes communicated via fax. The pirates used the Biscaglia's machine. A fax emerged on Christodoulou's computer. "Your crew they don't have water maybe they will dye..." "Somali gentlemen they know only how to kill or shooting the people. So please help me to finish this problem..." Signed: Hussein. >>View the actual ransom note here. When Abbas the hardliner took charge, the threats gathered clarity -- the Biscaglia thrust aground onto some deserted Somali beach, the Biscaglia crew marched at gunpoint into the Somali interior -- but still these coercions were subtly couched. They never took the form of: Pay this amount, or else. Abbas would say, in his highly imperfect English, that some of his bosses may have recently discussed the possibility of these drastic measures. It became, in effect, the threat of a threat. Christodoulou would respond in kind: I know you're capable of doing this, he would reply through the football. "But you're businessmen, not murderers. I know we don't want to let our situation get to that." The Americans hunkered in Hoboken understood that Abbas' subtlety was smart. Neither side wanted to force a "face-off," Christodoulou says, "where somebody's gotta blink." (The story of the crisis, in the retelling, has burnished Christodoulou's language at times into noir.) It did not put Christodoulou's mind at ease that Somalia's pirates had yet to run a ship aground, to shoot a sailor to make a point. "In the investment world, they're always saying that past results are not necessarily an indicator of future performance. Well, you never know if you're going be the first guy where they kill a crew, where they run your ship into the ground, where they take your guys into the caves." All through the days, in the background to these conversations between Christodoulou and his pirate liaison, Reginald Taylor, the Englishman (not his real name), whose pre-kidnap-and-ransom career remained mysterious and much-discussed among the Americans in the Hoboken condo-bunker -- Christodoulou suspected Her Majesty's S.S. -- played many crucial roles. Among them was gathering "market intelligence." So busy have the hijackings become off Somalia that -- in 2008 as now -- ships go in and out of captivity almost every week. Ransoms, therefore, are being transacted frequently enough that a going rate for the termination of a hijacking has more or less evolved. The going rate for a ransom depends on a ship's size and age and cargo and number of crew -- just as it would for charter rates, for ship asset values, for maritime insurance, for fees at the gates of the Suez Canal.
By the last week of January, Christodoulou believed a deal was imminent. "I could tell, from pricing conversations, from the tone and pace, that we were getting to closure. It's not: they're saying A and we're saying Z. It was: they're saying M and we're saying L." The number of phone calls between Hoboken and Somalia shot up to as many as 20 per day as the two sides maneuvered. This meant that, at long last, Christodoulou needed to call in a favor. Because kidnap-and-ransom insurance is an indemnity policy, the insurer does not front the capital for the payout, and ISEC, in its tight cash spot, didn't have the money to cover a (roughly) million-dollar ransom. But, Christodoulou says, one of ISEC's biggest investors, a private-equity firm called Regent Private Capital LLC, of Tulsa, Okla., had assured him that finding the ransom money wouldn't be a problem. "We'd always been very confident that having the funds would not be an issue," Christodoulou says. "And that the only thing we had to focus on was safely resolving the negotiations."
But it was, in the end, unnecessary. A simple call to Per Gullestrup in Copenhagen solved the problem. The Clipper Group would advance ISEC the ransom amount. "He didn't even have to think about it," says Christodoulou. "Boom, done." Two days later, through the windows at his riverfront condo, Cristodoulou saw some sort of froth on the Hudson. He was on the football, making final arrangements with Abbas. At the front of the turbulence was an oddly shape watercraft. Sully had just landed his plane. With Clipper's guarantee, ISEC got a loan. With the loan, cash -- 100s, 50s, 20s, 10s, "It's been reported as more than a million; let's leave it at that," is all Christodoulou will say -- went into a tube and into a private aircraft that flew over the Biscaglia anchored off Garacad, swooped low over the ship to take photographs of 28 crew members standing on the deck -- proof of life -- swung back around and dropped the tube, parachute blooming, which fell softly into the ocean. Also in the tube was a cash-counting machine. When the crew returned to India several days later, they walked together into the Bombay airport terminal and were mobbed by media, camera flashes popping. Before the tube of cash parachuted into the water, ISEC's lawyers drafted an actual contract, signed by both parties, ship-owner and pirate gang. The irony was not lost on anyone: drafting a contract for the release of a thing from the very party that stole it from you. Among the last things Christodoulou told Abbas was a half joke that later became the full truth: You're going to put me out of business, and then I'll need to find a job. And Abbas said: I'll give you a good reference. Earlier this year, ISEC sold the Biscaglia and its sister ship to a Turkish company. Despite Christodoulou's belt-and-suspenders approach to insurance coverage, enough gray-zone costs came out of the hijacking that it overwhelmed ISEC. Repairing the ship, for instance -- ships sitting idle for long periods don't do well -- cost "hundreds of thousands of dollars. A poor market for seaborne shipping rates didn't help matters. And so ISEC has been dissolved, and Christodoulou is looking for a new job. But in some respects, more than a year later, he remains in Somalia. He's adamant about the subject of piracy; he still gives his talks at shipping-industry conferences. He keeps in touch with some of the Biscaglia crew. And if he does return to the shipping world for employment, he'll assuredly be forced to confront the subject once more. Piracy, after all, is in the nature of shipping. During an interview session not long ago in the lobby of a Manhattan hotel, Christodoulou pulled out one of his cell phones -- not the football. He scrolled through his contact list. Under the "A"s was "Abbas." He held the phone up: in underscored blue lettering, a pirate's hotmail. "He gave it to me," Christodoulou said. "In case we ever had to communicate again." -- Written by Scott Eden in New York