Tuesday, April 24, 2007

Vulture Funds

See "Part 2 of Greg Palast Reports - BBC NewsNight Vulture Bond"

When I first heard about this story from Greg Palast on Democracy Now! I was literally speechless. I just wanted to cry. I just wanted to scream. I just wanted to rip their throats out! People are so damn evil. This actually helped to precipitate me to start this blog. I just felt like I needed to say something about the things that I hear about while working at home running my online bookstore. Even if I have a small to non-existent audience, I need to at least speak out against some of the injustices that I hear about everyday. And this is some of the worst work of evil that I've ever heard.

Here is an explanation of this situation: activists worked hard to create a Jubilee forgiveness of debt for poor countries strapped by the crippling load of repayment. You may remember Bono, of the band U2, was working hard to get young people of western countries to push for this. It was thought that these countries had more than paid back these loans and were at this point just paying the interest. (Not to mention that a lot of these loans were taken out by corrupt dictators.) Enough was enough, forgive the loans and let these poor countries begin to grow again and use their money to pay for schools, hospitals, and health care for their own people. A few indebted countries were forgiven their loans such as Peru and Zambia.

Here is where the evil comes in: unscrupulous investors took advantage of how the loans were forgiven. A bond is issued for the lesser amount of the loan — so say a loan was $40 million becomes $4 million — so that the poor country pays the lesser amount and the loan is ended. These evil, nasty, little investors have swooped in like vultures to buy the bonds before the poor country even gets a chance to pay off the loan. These bastards then turn around and charges the poor country the full amount of the original loan plus interest! EVIL! EVIL! EVIL! God bless Greg Palast and Amy Goodman for exposing this travesty of justice!

From a February 14, 2007 Greg Palast report Vulture Fund Threat to Third World:

On Thursday 15 February a high court judge in London will rule whether a 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.”

An update of this story appeared on Democracy Now! with Greg Palast this morning. John Conyers had the same reaction to the that I had and went into the White House that morning and demanded that George Bush do something about this. Since the election of November 2006 and the Democratic takeover of Congress and the Senate we progressives have the power to force action. At least that is something.

Update: From a Democracy Now! exclusive:

A British court has ordered the government of Zambia to pay the “vulture fund” company Donegal International 15 and a half million dollars. Donegal is owned by the US company Debt Advisory International.

But investigative journalist Greg Palast reveals a new development: Democracy Now!’s airing of his BBC expose on Donegal this year has led the Justice Department to open an bribery investigation that could lead to an indictment.


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