I get the idea that Eric Hermann doesn\u2019t want to talk to me. When I came to his office suite, his hedge fund\u2019s name plaque had been unbolted from the building\u2019s wall, the suite number removed and all the employees locked in.<\/p>\n
I\u2019m not surprised. Hermann is a vulture, not the carrion-eating type, but the kind that prey on the financially wounded. \u201cVulture\u201d is a hedge fund industry term for the financiers who buy up the right to collect old loans of the world\u2019s poorest nations, and then use every trick in the book \u2014 from lawsuits to bribery to hiring Henry Kissinger\u2019s lobby firm \u2014 to muscle destitute countries into turning over their meager foreign aid funds.<\/p>\n
Vultures, whether of the feathered or speculator species, don\u2019t like to talk to reporters.<\/p>\n
On February 25, the day after BBC Television\u2019s Newsnight ran my report from in front of Hermann\u2019s locked office door, Britain\u2019s Parliament voted to bar vulture funds from using Britain\u2019s courts to grab the assets of poor nations.<\/p>\n
And what about the United States? Why are our own politicians cowering behind legislative locked doors?<\/p>\n
What we can do and why we should do it requires, first, a little more info on how vultures operate.<\/p>\n
In Hermann\u2019s case, his hedge fund bought, for next to nothing, the right to collect several million dollars owed by Liberia. (They grabbed the debt from a unit of what is now J.P. Morgan Chase; banks like Morgan Stanley like to hand off their dirty work.) In February 2002, Hermann\u2019s fund then sued Liberia for the long-forgotten loan, for compounded interest and fees. Hermann filed suit the very week Liberia\u2019s capital, Monrovia, was surrounded by warlords, with neither electricity nor water, and the government was controlled by an escaped convict from the United States, Charles Taylor, who is now imprisoned at The Hague.<\/p>\n
To no one\u2019s surprise, neither Taylor nor representatives of Liberia showed up in the New York court. Liberia thereby lost by default, and was ordered to pay Hermann and his partners all the millions they sought.<\/p>\n
Fast forward to 2007 and peace in Liberia. Ellen Johnson Sirleaf is elected Africa\u2019s first female president and donor nations, including the United States and Britain, agree to pay off Liberia\u2019s old debts. By now, almost all that debt is held by vulture funds, but they all, including Hermann, agree to accept three cents on the dollar of their claims which, while seeming low, produced a very nice profit for these \u201cinvestors.\u201d<\/p>\n
But when it came time to actually turn over the loan papers, Hermann and his partner, Michael Straus, admitted that they had passed off a hunk of their holdings to mysterious British Virgin Island funds called \u201cHamsah\u201d and \u201cWall.\u201d<\/p>\n
With all the other creditors out of the way, Hamsah and Wall could, in effect, hold Liberia ransom for all its remaining and future assets. For example, Norway is helping Liberia drill oil\u2014but that aid would now go to the two remaining vulture firms. They are demanding $28 million, more than 5 percent of the nation\u2019s entire budget.<\/p>\n
Hermann is not the only debt vulture, nor Liberia the only prey.\u00ac\u2020 In 2007, BBC aired my investigation of a vulture who goes by the moniker \u201cGoldfinger.\u201d Goldfinger is U.S.-based speculator Michael Francis Sheehan. Our evidence suggests Sheehan bribed the president of Zambia to win his pound of flesh. Hearing the report, a furious Congressman John Conyers (D-Mich.) drove immediately to the White House and confronted George Bush.<\/p>\n
Bush promised Conyers he\u2019d act, but he didn\u2019t. One can only wonder if Bush\u2019s failure to put vultures out of business may have been influenced by the fact that the biggest vulture of them all, Paul Singer, who threatens Congo and Argentina, has also become the biggest contributor to the Republican Party in New York. Singer, notably, funded the Swift Boat attacks on John Kerry.<\/p>\n
But it\u2019s not just Republicans who feed the vultures. Former Rep. Eric Massa (D-N.Y.) held a fundraiser sponsored by Singer and other vultures. Massa, in turn, sponsored a bill to punish nations that resist payment to vulture funds. Lucky for indebted nations, Massa\u2019s own predatory behavior has rendered useless his service to the hedge fund chiefs.<\/p>\n
Congresswoman Maxine Waters (D-Calif.) has sponsored the \u201cStop VULTURE Funds Act\u201d (H.R. 2932), which mirrors what Britain and other nations have done: put the financial corpse-chewers out of business. Congress should pass it now.<\/p>\n
_______________________<\/em><\/p>\n Greg Palast is the author of the New York Times bestsellers <\/em>The Best Democracy Money Can Buy (2003) and <\/em>Armed Madhouse (2007), and co-author of <\/em>Democracy and Regulations: How the Public Can Govern Essential Services (2003). Palast has won numerous awards for his investigative journalism. His stories have been published in many newspapers and magazines, as well as broadcast on the BBC and Democracy Now! His website is at www.GregPalast.com<\/a>.<\/em> I get the idea that Eric Hermann doesn\u2019t want to talk to me. When I came to his office suite, his hedge fund\u2019s name plaque had been unbolted from the building\u2019s wall, the suite number removed and all the employees locked in. I\u2019m not surprised. Hermann is a vulture, not the carrion-eating type, but the […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48],"tags":[],"class_list":["post-3948","post","type-post","status-publish","format-standard","hentry","category-in-focus"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/3948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=3948"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/3948\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=3948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=3948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=3948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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