A Big Insurance whodunnit

Surely the first clue that something shifty was afoot was when the crew of the oil tanker Brillante Virtuoso helped the hijackers to board.

Somali pirates had demonstrated in the early 2000s that it was possible to overcome the defences of large oceangoing ships with grappling hooks and ropes, but it wasn’t easy work. The Greekowned, Liberian-flagged Brillante, an oil tanker as long as three football fields, with a deck 200 feet above the water, was equipped with water cannons and ringed with razor wire. And yet, when a skiff full of armed men approached in the Gulf of Aden in July 2011, the crew lowered a ladder.

This was the opening act of the colossal insurance fraud detailed in Dead in the Water, by the veteran Bloomberg journalists Matthew Campbell and Kit Chellel. It is a rich story of fake piracy and a global conspiracy so complex, and involving so much money, that it seems to inhabit a different quantum level, one where ordinary logic and values do not apply. But what makes it much more than a scrum between competing money interests is murder.

The Brillante boarders set off explosions that crippled the vessel and fled. The oil inside its listing hull was worth about $100 million, and there was enough of it to cause grave environmental damage if it leaked. Preventing that, rescuing the crew and salvaging the Brillante called for urgent, highly specialised work that would cost millions. Its owners subsequently entered a claim for $77 million in damages to its insurer, Lloyd’s of London.

Just weeks after the incident, David Mockett, a British expert on maritime mishaps, completed an initial inspection of the foundering vessel, and apparently came away suspecting that it had been sabotaged, not hijacked — since when do pirates cripple a vessel and flee? Mockett never got a chance to report his findings: He was killed by a bomb that exploded his car in Aden.

The best nonfiction takes us far outside our own experience, to illuminate something foreign but nevertheless essential. As the authors note in their introduction, “The oceans make the modern economy possible.” On one level, Dead in the Water is a masterpiece of explanatory journalism; the authors keep the story moving swiftly — forgive me — through some very difficult seas. At the centre of their story is Lloyd’s of London, the primary insurer for the giant oil and cargo fleets that ply the oceans.

“The first thing to know about Lloyd’s,” they write, “is that it doesn’t, in fact, sell insurance, and it never has. The name instead refers to an umbrella organization for hundreds of ‘members’ — a mix of corporations and wealthy individuals — who actually provide policies, which are then said to have been sold at Lloyd’s.”

Lloyd’s is one of those global organisations that undergird modern life, providing liability insurance for everything from airlines to zoos. It functions like a gigantic shock absorber, or, rather, risk absorber. To ensure that no one member is saddled with catastrophic loss, the liability is spread broadly enough that members trade in it the way investors trade in stocks and bonds. Everything about this business is bewilderingly complex, by design. “Ship owners and a fleet of enablers, most of them in London, have spent a half century making their world harder to understand, hiding maritime tycoons’ true identities — and their tax and regulatory obligations — within nesting dolls of shell companies.”

So it is hard enough to figure out who owns a vessel, much less who should foot the bill if it founders.

This system works to keep the industry rich and protected, but it also presents opportunities for the unscrupulous, in this case a colourful Greek magnate named Marios Iliopoulos, the Brillante’s owner, who was found to have staged the hijacking and destruction of his own vessel. The authors

paint a vivid portrait DEAD IN THE WATER: A

of the man, who True Story of Hijacking,

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name “Super Mario” Maritime Conspiracy

and who terrorised a Author: Matthew

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$27 “with the swagger of 288 a professional wrestler approaching the ring, his unshaven features twisted into a scowl, arms swinging by his sides, untucked shirt over an ample stomach.”

Mockett’s death gives the book a powerful emotional centre, and sets up its central conflict, which is less between the crooked ship owner and the authorities than between the elite London insurance lawyers whose primary goal is to mitigate damages for their clients, and two consulting investigators, Richard Veale and Michael Conner, both former cops, who want justice.

True stories usually have messier endings than we would prefer. Given the raging civil war in Yemen and the difficulty of working through local officials in Aden, the detectives can’t find Mockett’s killer, or even who ordered the hit, although the facts point in a clear direction. And while the detectives assemble enough witnesses and evidence to prove that Iliopoulos orchestrated the “hijacking,” astonishingly, he escapes not only criminal but financial consequences.

Sorting all of this out could not have been easy. The authors report and explain it masterfully, giving us an account that is both enlightening and thoroughly engaging. One longs for a sequel where justice is done.

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