Tag Archives: Minnesota

A Break in the Remittance Campaign Comes from the Somalian Hawala Crisis!

Hawala in Minneapolis, St. Paul

New Orleans   ACORN International’s Remittance Justice Campaign has begun to pick up steam.  A private member’s bill to cap rates has now been introduced in Queen’s Park for the Ontario provincial government.  Similar efforts are being pushed in British Columbia and later this year legislators have committed to introducing measures in Honduras and perhaps even Mexico once the election fever settles down today.   The hardest nut to crack has been in the United States, but we may have a break from an unexpected quarter:  32,000 Somalians in Minnesota.

The failed state of Somalia in the wake of its civil war sent refugees around the world, including the United States, and particularly the Twin Cities area.  There is currently no banking system in Somalia which makes transmitting remittances from relatives in the USA back to desperate relatives in Somalia very difficult.  Somalians have been using the largely informal hawala system which is a critical piece of the money transfer system especially in India (where it is illegal), other south Asian countries, and some parts of Africa.  According to an excellent story by Miriam Jordan and Erica E. Phillips in the Wall Street Journal, about $100 million is moving through federally licensed US-based Somali hawalas.  ACORN International had done a report recommending the expansion of hawalas because their cost is usually less than 1.5% rather than the more predatory pricing of Western Union, MoneyGram, and of course the banks.  Most money transfer organizations (MTOs) are licensed at the state and provincial level, so it was a revelation to us to find that hawalas were under federal jurisdiction and licensing in the USA, contrary to our earlier research.

The crisis is that mainline US-based banks in the wake of the banking regulations implemented post-9/11 ostensibly in the name of homeland security, have increasingly been refusing to handle transactions for hawalas.   “U.S. banks are permitted to deal with hawals, typically small businesses that have anti-money laundering, reporting, and record keeping obligations in the U.S.”  This is unique since many hawalas have operated for centuries on the basis of trust and personal handling with no records.  U.S. banks are bridling now because of concerns that the money might be funneled to terrorist groups.  Families are demonstrating, especially in Minnesota because their families are “starving” without being able to receive the remittances.

Representative Keith Ellison (D-Minnesota) is drafting legislation to deal with this crisis.  Representative Carolyn Maloney (D-NY) has attempted to deal with this issue in the past.   Scott Rembrandt of the US Department of Treasury’s Office of Terrorist Financing and Financial Crimes has argued that the hawalas should not be shunned, which raises hopes as well.  According to the Journal he says that the Treasury “doesn’t assume money transmitters present a uniform or unacceptably high risk of money laundering, terrorist financing or sanctions violations.”  Such a position would seem to point, not surprisingly, at the larger banks like Wells Fargo and U.S. Bancorp as being overly cautious and therefore squeezing Somalians and others desperate for reasonable relief for high costs and for workable solutions.

Deborah Bortner, a regulator in Washington state, correctly notes that without a system that works legally to transmit money, “it’s going to go underground,” which is exactly what is happening with many hawalas around the world and precisely one of the arguments that ACORN International has made about the need for regulations in this area.   We can only hope that this crisis will finally force all of our voices to be heard and allow progress for immigrants families and migrant workers who are desperate for remittance justice.

Ad from Western Union steering folks away from hawalas


Debt Collectors Gone Wild at Catholic Hospitals and Other Non-Profits

New Orleans    A story in the Times of a Minnesota investigation of an aggressive debt collection company that might be breaking all kinds of HIPPA laws designed to protect patient care information along with other statues caught my eye.  This seemed at first glance to be another story of our imploding health care crises.  The company, Accretive Health, even seemed to have become embedded in the emergency room and registration areas for hospitals and in some cases collecting money upfront and at the door before treatment was accorded.  Damn!

In the story the company would not reveal whether it was under investigation in other states or much about its business.  All of that made me curious.  Looking at their website the mystery just got deeper.  Who are their Board of Directors?  Website wouldn’t say?  Where do they work?  No information.  Their motto was interesting:  “we do good by helping  you do well.”  Kinda creepy when we are really talking about a debt collection machine!  A video clip of their CEO, Mary Tolan, gave a small clue when she started off message by saying their main business was with nonprofits.

And, not just any nonprofits it seems for this Chicago-based New York Stock Exchange company.  Their founding partner hospital was Ascension, the huge Catholic nonprofit based in St. Louis which is supported by the Daughters of Charity and the Sisters of St. Joseph.  Elsewhere a news release trumpeted a new deal with Catholic Healthcare-East where they will be managing the front and backend of the operation to maximize revenue collection and retention.

Their board?  Well a co-founder and the Chair of the board is a J. Michael Cline, who seems to run a private equity firm called, Accretive, and has an avocation according to the Wall Street Journal for conserving wild cats.  The one name that jumped out was Edgar Bronfman, Jr., the liquor heir wildly known for investing and managing with some difficulties first in Hollywood and more recently with Warner Music.   I could find a list with not much else in their 2011 annual report.

Their SEC filing has one simple sentence about the Minnesota investigation but even though a public company reveals nothing else with a May 2nd annual meeting on the horizon in hardly a week.

Why so secretive?

What is the real relationship and connection to all of these giant Catholic healthcare networks and hospital systems?

What’s going on here with Accretive Health and its clients?