A California bank’s decision to stop handling wire transfers from Somali Americans to their families back home — one of the last legal routes for remittances to Somalia — could have a devastating effect on the country, one of the poorest in the world, if federal authorities are unable to find an alternative, community advocates warned.
Until last Friday, an overwhelming majority of Somali Americans transferred funds to Somalia through the Merchants Bank of California (MBC). From a single branch in Carson, Calif., the bank sent $200 million a year in remittances to Somalia, the Los Angeles Times reported. Wells Fargo and other financial institutions stopped providing the transactions about a decade ago, reportedly under pressure from the U.S. Treasury Department, out of fear that the money was being funneled to the armed group Al-Shabab.
Twelve U.S. lawmakers sent a letter to Secretary of State John Kerry on Saturday, demanding a meeting to discuss alternate avenues for remittances to Somalia. So far, there is no legal alternative. The U.S. government “is engaged in ongoing communication with the Somali community in the United States and the financial institutions serving the community,” a State Department official, who spoke on condition of anonymity, told Al Jazeera.
Rep. Keith Ellison, a Minnesota Democrat, whose district has one of the largest populations of Somali immigrants in the U.S., is leading the congressional effort to open a new avenue for remittances. “There is no doubt that a decline in remittances will exacerbate the humanitarian crisis and erode the gains Somalia has made in recent years,” Ellison said.
Meanwhile, the closing of one of the last legal options for remittances is causing concern for Somali-Americans worried about their families back home. Ifrah Ahmed, a 25-year-old law student in New York, was born in Somalia and raised in Seattle. With a father and two younger siblings in Somalia, she would send $100 to $300 to relatives each month. “It’s really heartbreaking,” Ahmed said, choking back tears. “Even though you send remittances to one person, the amount of people that money affects is incredible. If we send money to my aunt, not only will she feed her children, she will feed her neighbors as well, because they may not get remittances from abroad.”
Ahmed has, together with a Somali American and two Somali Canadians, started a campaign to get Washington to open channels for remittances, in part with Twitter hashtags #IFundFoodNotTerror and #Somalis4Remittances.
The United Nations Office for the Coordination of Humanitarian Affairs estimates that 1 million people in Somalia, which has a population of 10.5 million, are unable to meet their basic food needs. More than two decades of conflict, including a decade since the rise of Al-Shabab, have disrupted much of the country’s food supply, and the government is unable to provide basic public services to much of the country. More than $1.3 billion in remittances, according to international anti-poverty advocacy organization Oxfam, sent from abroad help fill the gap.
Somali-American community leaders say that the U.S. government’s fears about legal remittances flowing to fund Al-Shabab are overblown and could, inadvertently, create sympathy for the group. “Right now, people think they are stopping terrorists, but the [Somali] people will think nobody cares about them and Al-Shabab will take advantage of that situation,” said Hassan Omar, director of the Somali Community Association of Ohio, adding that the armed group “will give people food” in a bid for hearts and minds.
In February 2013, a Somali-born U.S. citizen from San Diego, Basaaly Moalin, was convicted of sending $8,500 to Shabab. Moalin has vehemently denied the charges, saying in a recent interview that he despises the Al-Qaeda-affiliated group.
It is unclear which federal agencies were behind MBC’s decision, but the Treasury Department has in recent years put pressure on financial institutions to stop transactions that might fund international armed groups. The State Department source referred Al Jazeera to the Treasury Department, which did not respond.
Merchants Bank of California did not respond to multiple requests for comment.
If the U.S. bars remittances, the duty to oversee the humanitarian welfare of Somalia will fall squarely on its shoulders, said Omar.
“If the United States wants to stop this money transfer, the United States has the ability to support Somalia to restore the order and stabilize the nation,” he said.
Omar believes stopping the transactions is tantamount to criminalizing the entire Somali American community. “We are American,” he said. “We have American values. We aren’t a bunch of terrorists. We are good citizens with ethics and morals.”