Vulture Funds Threat to Developing World

[MamaBear]

http://news.bbc.co.uk/1/hi/programmes/newsnight/6362783.stm

On Thursday 15 February a high court judge in London will rule whether so-called vulture fund can extract more than $40m from Zambia for a debt which it bought for less than $4m.

There are concerns that such funds are wiping out the benefits which international debt relief was supposed to bring to poor countries.

Martin Kalunga-Banda, Zambian presidential adviser and a consultant to Oxfam told Newsnight, "That $40m is equal to the value of all the debt relief we received last year."

Vulture funds - as defined by the International Monetary Fund and Gordon Brown amongst others - are companies which buy up the debt of poor nations cheaply when it is about to be written off and then sue for the full value of the debt plus interest - which might be ten times what they paid for it.

Much more at link. There is a Washington DC vulture fund mentioned with ties to Jack Abramoff.

Bush could stop all this easily, but won't. So when he talks about forgiving third-world debt, he is talking, once again and as always, about throwing more money at his billionaire pals.

Greg Palast was on Democracy Now this morning talking with Amy Goodman about this piece, if so the transcript will also be very interesting reading.

I have just hit my outrage breaking point. I don't think I can take any more in. This morning.

[Jackpine Radical]

1. That's such a harsh expression, "Vulture Fund." How about

"Recyclers of the Body Politick?"
"Debt salvage operations?"
"Third-world cleanup initiatives?"

[MamaBear]

2. Well, when you're talking about the Masters of the Universe

I suppose it pays to be somewhat deferential.

Besides, calling these vermin "vultures" does a disservice to the bird variety, who do us the favor of cleaning up our roadkill for us.

[peacetalksforall]

3. I recommend everyone take a look at this scheme.

I watched Dem Now with Palast and may I offer something that I didn't hear until the end that would have helped me from the beginning. Maybe it will help someone else unless they've already learned how it works.

This is my pitiful understanding - please correct me if I'm wrong.

What I missed earlier is that the U.S. holds the 'money' of Zambia - the case up for a decision. George Bush has the authority to prevent the Vulture from throwing Zambia right back where they were before the debt was written off.

This is not something being carried out in just Europe and Africa - we are going to see whether George Bush honors the people who make grand contributions to him.

Today is supposed to be the day? And he's over at the AEI giving a speech - the organizaiton that supports PNAC.

What is poignant in the Palast documentary - is that just two weeks ago - in the SOTU - Bush said we were going to do right by these people. Everyone clapped includng Cheney.

[MamaBear]

4. I guess whenever Bush references people we should know

I guess that whenever Shrub references "people" we should know he's talking about billionaries. So that's exactly what he's doing ... doing right by his buddies.

This scheme is so slimy it makes payday lenders and predatory mortgage lenders in the US look almost virtuous.

[peacetalksforall]

6. What I gather is that it is all lawful - so this is going to be 'thee'

classic case of -

doing right ethically and being within the law
or
crapping on people and being within the law

in spite of saying that you will help people.

Where are the people who fought for debt relief - what are they saying.

How many people know what is going on here?

I haven't followed this.

Where did these laws come from?

I feel so depressed about the opporessed people.

This could be another horrible event in mankind or something uplifting.

[Cerridwen]

5. Collection agencies = Vulture funds = Collection agencies =

You get the idea.

1. What number of the Vulture fund corporations are of U.S. origin?
1a. Did they start as collection agencies then branch out?

2. If 1 and 1a are true, would outlawing the collection agencies businesses in the U.S. and their practices help to reduce the Vulture fund industry?

3. Is there a list of the Vulture fund corporations somewhere? (I'm reading and googling as you read this)

edit to add: so far from the article

<snip>
Debt Advisory International (DAI) manages a number of vulture funds which buy up the debts of highly indebted poor countries cheaply and then sue for the original value of the debt plus interest. (can't find a website for them yet - they have offices in DC and are listed on lobbyist reports)

<snip>

the company founder Michael Sheehan outside his home in Virginia.

<snip> (shrub and guiliani and republican connections - surprise /sarcasm and they use the U.S. court system to bankrupt countries *sigh*)

The vulture funds raise most of their money through legal actions in US courts. Those actions against foreign governments can be stayed by the word of the US President and that is where lobbying and political influence becomes important.

Debt Advisory International are very generous to their lobbyists in Washington. They have been paying $240,000 a year to the lobby firm Greenberg Traurig - although recently they jumped ship to another firm after Greenberg Traurig's top lobbyist was put in jail.

Paul Singer has more direct political connections. He was the biggest donor to George Bush and the Republican cause in New York City - giving $1.7m since Bush started his first presidential campaign.

Rudi Guiliani is the favourite to be the next Republican presidential candidate and a leaked memo from his campaign shows that Paul Singer has pledged to raise $15m for Guiliani's campaign.

<snip>

still googling names and companies and such