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Somalia wire-transfers halted over terrorism fears.

December 20, 2011 1:05 p.m.

GUEST:

Abdulmalik Buul, chairman San Diego Somali Youth League of San Diego

Wali Warfa, agent for San Diego's largest hawala.

Related Story: U.S. Bank Shuts Down Money Wiring Service To Somalia

Transcript:

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: I'm Maureen Cavanaugh. It's Tuesday December 20th. Our top story on Midday Edition, the one U.S. bank that still facilitates money wire transfers to Somalia says it's shutting down the service. Franklin bank says continuing the transfers carries too much legal risk. But the impact of that decision on the desperate people in Somalia, and their relatives here in San Diego, may very well be staggering. Joining me are my guests, Abdulmalik Buul is president of the Somali youth league. Welcome to the program.

BUUL: Thank you.

CAVANAUGH: And Wali Warfa is an agent with the largest hawala in San Diego. They facilitate the wire transfers through the U.S. bank, and Wali, welcome to the show.

WARFA: Thank you.

CAVANAUGH: Now, let me start with a quick review of how money is transferred from here to Somalia. Wali, Somalia does not have on banks as we know them, but rather hawalas like the one you run in San Diego. Tell us what they are

WARFA: Well, the people from Somalia and Sudan came here gi beauty, Ethiopians, usually they send money back to their families back home. So these days they have some concerns about closing a bank account. And they have a lot of questions about what's going to happen next. And the answer was we don't know.

CAVANAUGH: Right. Now, for overseas transfers of money, though, a bank has to be involved; is that right?

WARFA: Yes. The banks, usually the money transmitters need the banks in order to do a business. Without accounts, bank account, they cannot do this business. And the banks -- the reason they are closing, I think, is they are considering it's high risk for relations like PSA, which is a bank, and also the patriot act.

CAVANAUGH: Exactly

WARFA: And what happened is that the usually they comply with the antimoney laundering program. They usually have a training for their staff. They have independent -- and also their operation

CAVANAUGH: Let me stop you there if I may. My understanding is that there's one bank left that does these transfers, Franklin bank in Minneapolis. They say they're stopping at the end of the month. Abut maLEK, tell us how important the wire transfers are to the Somali community here in San Diego?

BUUL: Well, in effect, the people, the population that came here in the early 90s, we have an equivalent amount of people back home. Most who came here came here in the 90s as refugee immigranting. Their sons, brothers, fathers, mothers are back home. And the cutting off of this would cause a humanitary implication of epic proportions. You have a famine in Somali, 3.2 million people affected by that. They do not have relatives outside. If you cut off another 6 to 8 million of the largest Somali population, then you have -- now you have no way to get to that people. And effectively, also you have consequently, the NGOs that operate within the country that have to send money to remote villages or send aid to remote villages. That can be an effective way to conduct human tearian work in a country. So that leaves no option, and bricks a larger catastrophe.

CAVANAUGH: Ibrahim Hussein is with the -- now, let me just say the concerns that I've read about, that the banks have. The banks are having concerns that they are going to be innocent conduits for money coming from the United States going to the terrorist group mainly al-Shabab. And of course just earlier this month here in San Diego, we had a Somali pleading guilty to aiding in a plot to fund al-Shabab. So I'm wondering, Ibrahim, do you agree that the banks have a lot of legal risk on the line to be involved in this?

HUSSEIN: I do agree. But I could tell you this. As you know, within the United States , these people whom ever open hawala do have a legal way of doing whatever they are doing. You cannot screen out every human being that could be one mistake. What that mean, in the United States , as you know it, if I have family members who do one little mistake I don't have to be hurt for it. Yes, we have heard about the person we're talking about. How come the -- what could you do with the 30,000 good citizens, working and paying taxes and trying to help their mother in laws not to die for lack of food?

CAVANAUGH: Let me go to Wali Warfa, who are you hearing from the people who use your hawala? I would imagine that this is a very big news topic among people who wire money frequently to Somalia. Is this any other option that they have to get money over there if indeed this last bank that does the transfers shuts down?

WARFA: No, no. Because the hawala or money transmitter is sending money to Somalia, they don't have any banks at all. So there's no other way to send money because there's no bank in Somalia. So money transmitters are the only financial institution who can receive money from abroad. So they don't have any other choice at all?

CAVANAUGH: Let me ask you, Abdumalik, why is there no banking system in Somalia? Is it because there's no government or is it because traditionally there's no banking system?

BUUL: No, there was a banking system before. But I can't speak about the -- but I would say that lately in the past decade or so, this has become the common trend of sending money back home. And it's a country based on remittances. Families depend from the diasporea, the people that flood the country back home to the people that live in the country. And that's the way the money has been transferred for the longest. When I was there, that's how it was being conducted from day to day business.

CAVANAUGH: Wali, what is is the volume of money transfers per year from San Diego to Somalia?

WARFA: I would say approximately $1 million. But I would like to visit the problem, in fact, for a banking problem generated by regulationists. And regulatories can't fix it. That's the only way, especially when you look at it, the current enforcement policies of the patriot act, and the PSA act. That would make it really hard. So I would say the community should contact their senators and also congressmen to find out a way we can protect our financial industry and financial system and spend time to allow to support their families

MAUREEN CAVANAUGH: Can you think of anything you could do on your end, Wali, to make sure that the security concerns brought about by the U.S. government and the legal system are understood, that there's nobody getting money through to a terrorist group? Is there anything you could do on this end to tighten that up a little bit?

WARFA: Well, in reality when anybody wants to send money, we are collecting their information, name, address, telephone and so on. So I don't know what else we can do.

CAVANAUGH: I see. What is the reaction, Abdumalik, in the community, when an arrest is made, when a person pleads guilty to funding moneys, tunnelling money to al-Shabab in this way, using wire transfers that most people use to help relatives to fund a terrorist group?

BUUL: Oh, I can't comment on any cases personally. But the -- what I can comment on is the magnitude of the problem it causes for the larger community. If 1 or 2 people do make a mistake, the whole community being penalize forward that is something that's just completely ludicrous. Now you have families who solely depend on money coming in, and as Mr. Wali mentioned, a million dollars a year, it costs about $200 for a family to sustain itself of the that's a family of 5 or 7 people in Somalia. A whole month. So you're looking at pulling that away, how many lives will be affected by just simply doing those numbers? It's ridiculous. So I think there has to be a way that we can foster eye solution, like Mr. Wali mentioned, we need to sit down with the congressmen and senators, we need to sit down with the banks and we need to sit down with the people who monitor these hawalas or money transferring system, which is similar to a worse than union or money gram. We need to find a way, a concrete solution that pleases all sides and say hey, guys, listen, we need to create I more strict identification process so there's no loopholes. And once that security risk is taken care of -- there's also going to be a risk in the banking system no matter what. But from our end, if you tighten that up and we're more secure, and they have followed all the regulations, if we showcase that to our senators and congressmen and showcase this to the banks, then I think it could foster a reality to keep this going.

CAVANAUGH: Is there any way that as you say, there's so many NGOs on the other end in Somalia that they could facilitate the money transfers and make sure that they actually get to the right people?

BUUL: That's going to be difficult now. Yeah, these NGOs are operation in remote villages, especially in southern Somalia. So now not only are the Somali people using it, it's like large NGOs, UNICEF, and other others operation with this hawala system. So there has to be a point where they're involved in it and show some validity that we are taking care of this process. But we also have to do things if in order for things to be effective. The best thing for them to do is to sit on the table, and figure out a way to keel with it, and discuss ways to -- the only option right now is to cut it off. And that is not an option for the Somali peel. It's not an option for humanity. It's completely something that's ridiculous.

CAVANAUGH: The largest American Somali community, the largest Somali community in America is in Minnesota. And the --; isn't that correct?

BUUL: Correct.

CAVANAUGH: And the second largest is here in San Diego. Minnesota's Senator, alfrankin, I know was working to try to get some sort of legislation so that this does not shut down at the end of this month, that there is a way to continue these money transfers by lessening the legal risk to this particular bank who's still doing that. I wonder, if you could give us an update on the situation in Somalia. We talked with you earlier in the year when you had just come back from a human tearian mission, basically delivering some money to people who desperately needed it. What is the situation right now? Is there any relief from the famine conditions?

BUUL: There has been. There's different stages of the famine. In terms of the the households that are affected, those numbers have receded. But the numbers of illnesses that have spread, and disease because of the winter and the rain has caused another situation, a health crisis. You have malaria, cases of cholera, meningitis, and other diseases breaking out. Especially with children, that is prevalent. Before I left between the months of May and July, 30,000 kids under the age of five passed away. There hasn't been any data that has presented itself to show that it has been levelled off. In about a span of two weeks, 1,500 kids passed away in the region of hiran itself. They're trying to find a way to get the people back to the areas because the rain has falleb, so the drought is not there. But they are not there to plant. The farmers are not there to produce from the ground. So that's also causing the problems itself. And also the IDP camps, they're in the city where is they migrated to, where there's -- they don't have the capacity to with stand the rain. So when I was there, they had tents just made out of sticks. And I cannot imagine what's going on right now with the rain, and what's that going to cause. And it's getting colder as well. And they're also by the ocean. There's all these illnesses and diseases, and there's no use of getting someone food and water if their body won't allow them to absorb those nutrients.

CAVANAUGH: May I ask you in closing, is it fair to say that the wire transfers from the people -- Somalis here in the United States is a life line to the people in Somalia?

BUUL: Absolutely. It is beyond a life line. Literally, if this cuts off, people's lives are at stake. If this is not taken care of, the situation is not resolved, people will die. It's simply put. And I commend Senator alfrankin, and I'd also like to encourage the rest of the senators and congressmen to send for this issue and find an alternative along with the community, to rise up and deal with this. Because literally, people's lives are at stake.