Banks Block Somali Financial Lifeline, Minnesotans Protest
“Peoples’ lives are at stake. People are dying.” said a young Somali to a crowd gathered at the Minnesota State Capitol. State Senator Jeff Hayden agreed, “This is an injustice. This is a crime.”
Members of the largest Somali community in the United States have been wiring their money to their home country for years to support family members who live in poverty with no formal banking system. They are now fighting banks who are refusing to wire the money because they fear the U.S. government would label the banks as supporting terrorism. The very last financial lifeline was cut at the end of the year when the last community bank providing the money wiring service to Somali shut it down.
The action brought immediate protests from Minnesota’s Somalis. On Friday, they were joined by unions and political groups at the State Capitol demanding that something be done to reopen the economic lifeline.
Minnesota Congressman Keith Ellison pledged support in Congress to solve the problem. Minnesota Legislative Representative Karen Clark and State Senator Jeff Hayden pledged continued support and promised to introduce legislation on the first day of the 2012 session stating, “We are with you…” Clark also described efforts to create a Somali-American Bank to provide a long-term solution.
A financial lifeline since 1993
Minnesota’s Somali population, estimated at 32,000, the largest in the nation, has provided financial support to their families in Somalia ever since there arrival in Minnesota as early as 1993. Because Somalia has no formal banking system, Minnesotan use the Hawalas, the community based financial institutions that are the only practical way to transfer funds to Somalia.
According to the BBC, “US-based Somalis are believed to send about $100 million back home each year – largely from Minnesota.” The BBC estimates Minnesota ethnic Somali population to to be 60,000 – 80,000. This financial support is believed to be as much as 1/3 of the Somalia GNP.
Some Minnesota Somalis have been accused of aiding terrorism by raising money and recruiting fighters for al-Shabab, a Somali militant group linked to al-Qaeda. The first such charges were made in 2009. There has been on-going federal action against the suspected people. Two Rochester woman were convicted on October 20, 2011 on terrorist aiding charges.
The Homeland Security Wire reports on December 13, 2011: “In an effort to cut off funds to Somali terrorists, banks in Minnesota will no longer support money transfers via local businesses called ‘hawalas’…”
Participants at the rally expressed anguish and pain that the financial lifeline to Somalia has been severed leaving their families to starve and die. Many of them reported sending money every month to their extended families. The continued drought and famine has devastated the country.
The Homeland Security Wire reported that Minnesota Senator Al Franken has sent letters to Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner urging them to explore alternative methods to transfer money. Franken said, ”Ending remittances from the United States would be a victory for al Shabab which could claim America was preventing needed funds from getting to suffering Somalis.”
Further support was offered by a number of community, union and religious leaders, but the personal agony continues in Somalia.
More background on the story
Minnesota Public Radio provided detail on this issue on December 2, 2011.