They prey
upon the poorest nations, taking resources from the most desperate
peoples -- billionaire scavengers pocketing the funds that
might go to feed children whose families live on less than
$1 a day. They are called the vulture funds. They protect
their scavengings with fat checks to politicians and lobbyists.
One of the leading vulture firms is led by major donors to
President Bush. Now it is time to put an end to this disgrace.
Consider
impoverished Zambia, a small, poor country where the vast
majority of people survive on little more than $1 a day. In
1979, the Romanian government lent Zambia money to buy Romanian
tractors. The tractors didn't work well, and U.S. and European
agricultural subsidies basically hijack Zambia's potential
export markets. Zambia was unable to earn the foreign exchange
needed to pay for this and other debts.
In 1999,
Romania and Zambia negotiated to liquidate the debt for $3
million. The Paris Club of rich donors -- under great pressure
from the global human rights movement -- has finally been
moving to write off significant portions of unpayable debts,
if the debt relief is used for investment in health, education
and other vital needs in the debtor country.
Even
as the deal was being signed, the vultures arrived.
One of Debt Advisory International's vulture funds bought
the debt from Romania for less than $4 million. They
then renegotiated with Zambian officials and -- amid
charges of bribery and abuse -- cut a new deal on the
debt. They are now suing the Zambian government for
the original debt plus interest, which they calculate
at over $40 million, and they expect to win.
For
the United States, with our $2 trillion budget, $40
million is peanuts. In Zambia, it represents vital medicine
and textbooks. Martin Kalunga-Banda, Zambian presidential
adviser and a consultant to Oxfam, told the BBC's Newsnight,
"That $40 million is equal to the value of all
the debt relief we received last year."
Investigative
reporting by Greg Palast, broadcast on the BBC and Democracy
Now, has exposed the vulture funds, defined by the International
Monetary Fund as companies that buy up the debt of poor
nations on the cheap when it is about to be written
off and then sue for the full debt plus interest, often
pocketing 10 times what they paid for it.
"Profiteering
doesn't get any more cynical than this," reported
Caroline Pearce of the global Jubilee debt forgiveness
campaign.
Paul
Singer, a reclusive billionaire, is said to have essentially
invented vulture funds. In 1996, his company paid $11
million for some discounted Peruvian debt and then threatened
to bankrupt the country unless it was repaid $58 million.
They got their pound of flesh. Now, according to the
BBC, they're suing Congo Brazzaville for $400 million
for a debt they bought for $10 million.
U.S.
courts serve to enforce the vulture funds' contracts.
The president or Congress could bring an end to the
practice. So naturally, the vulture funds lavish attention
and contributions on key politicians. Debt Advisory
International, for example, was paying $240,000 a year
to the lobby firm Greenberg Traurig -- before lead lobbyist
Jack Abramoff was jailed.
Singer
has more direct political connections. He is among the
biggest donors to Bush and the Republican cause in New
York -- giving a reported $1.7 million since Bush started
his first presidential campaign.
Last
week, Rep. John Conyers, the chair of the House Judiciary
Committee, raised the matter directly with Bush himself,
asking him if he knew what his leading backers like
Singer and Michael Sheehan were doing, and whether he
would crack down on the practice. Conyers reports that
the president said, "I don't know anything about
this," and vowed to put an aide on it right away.
Conyers has promised to pursue the matter.
This
is the new global order: the wealthy -- armed with lawyers,
lobbyists, courts and retainers -- making fortunes by
preying on the vulnerable. Our government says that
we want to be a source of hope to the poorest peoples
of the world. The vulture firms make us a source of
despair -- and an object of hate.
Email
This Article To A Friend
