He shot back at the vulture funds and highlighted the decision of the US Supreme Court in favor of Argentina

Tiempo Argentino

Lobbyist must not dominate a country’s agenda

Sunday, July 22, 2012

By Nicolas Furfaro

He shot back at the vulture funds and highlighted the decision of the US Supreme Court in favor of Argentina

The Argentine ambassador in the United States, Jorge Arguello, pointed directly at the vulture funds and accused them by name of being speculators that are hiding behind the campaign against Argentina. Also, he explained the strategies that they use to hide, their political relationship to the Republican Party and the desperation that they show after repeated failures of their attacks.

–There is always talk of “vulture funds” in general, but there are proper names behind them like Robert Shapiro, Paul Singer and Kenneth Dart. Who are these men that lead the speculative tank?

–Robert Shapiro was assistant secretary of Commerce for Economic Affairs in the Clinton administration, and today, in exchange for a price, he is the spokesman for the “investors” gathered together in the pressure group American Task Force Argentina (ATFA). When the ex-president had the option of meeting with Dart again as a donor to the campaign he ruled it out, arguing that he didn’t want to get near him. So, the real owners of the vulture funds are people like the multimillionaire Kenneth Dart, of the fund EM Ltd., and Paul Singer, who uses MNL (sic) Capital and other firms created ad hoc to litigate on dirty and misruled issues even for Wall Street, and that maintains Elliot Management separately, which today manages some US$12 billion.

–These people are always well-received in the Republican Party, what are the relations between both actors?

–A clear example comes from Singer, who operates in the political arena to trade favors. In the 1990s he was the largest donor to the campaign of New York Mayor Rudolph Giuliani, who he also supported as a presidential primary candidate. He’s also the biggest donor to the New York police and one of the biggest financiers of the Republican Party. Today he is one of the few donors of the maximum amount of one million dollars to the campaign of candidate Romney and also gave money to the Governor of New Jersey, Chris Christy (sic), and the star senator from Florida, Marco Rubio, considered possible vice presidential candidates.

–ATFA has already spent three million dollars lobbying, has this amount translated into good results for the vulture funds?

–Despite its desperate attempts, ATFA has only convinced a handful of legislators to push measures against Argentina, like the “Judgment Evading Foreign States Accountability Act of 2011”, supported by less than 7% of the representatives and only its chief sponsors in the Senate. The caricature of Argentina that Shapiro and ATFA make not only speaks to their lack of knowledge but their impotence that is beginning to be generated among the vulture funds and their public representatives, the growing isolation that they suffer through the passage of time and it’s being demonstrated in the facts of the commitment of Argentina to honor every one and all of its debts.

–What is the final goal of the speculative practices of MNL (sic) Capital and EM Ltd., that didn’t accept any of the restructuring proposals made by Argentina?

–They drop down onto economies in turmoil to seek for cents to collect 100% of their value plus interest through default. It’s evident that for those funds their only option now is to weaken the country as much as they can to try to impose conditions. According to the vulture funds, Argentina owes US$3.5 billion “to the Americans” (sic)* and refuse to pay, but that figure is a nominal amount on claims in lawsuits in the United States and only one in ten of those dollars are demanded by citizens of the United States. The rest are from Americans that chose to establish their residence in other countries to evade taxes. Believe it or not, it is from that place that they are suing for 5000% of their initial investment in debt bonds. Around 90% of all the cases with a final decision against Argentina in the U.S. courts belong to the vulture funds, domiciled in tax havens.

–You have called them out many times as owners of entities domiciled in tax havens, places from which they attack hide. How do they do it?

–In 1994 Kenneth Dart decided to renounce his U.S. citizenship and adopt it from Belize. At that time he already had a family patrimony of US$3 billion and had shown his first skills. In 1986, the division of assets of the powerful Dart group allowed him to enter the stock market, where he was dazzled by the profits he made. At that time, one of the brothers considered himself harmed by the distribution of assets and filed suit in Michigan. His main fear was that the rest of the family had irregularly moved the company’s money to …. foreign tax havens! In the 1990s, the first “vulture” offensive gained notoriety in Brazil, where with a heavy foreign debt in renegotiation was made from only US$375 million from 4% of the bonds in play, some US$35 billion in nominal value. He sued for US$980 million, but got US$605 million, or 161% of what he’d bet in his speculative maneuver. When after his Brazilian adventure he renounced his U.S. citizenship, market analysts estimated that the Dart Corporation was eluding payment of some US$800 million in taxes through this maneuver. His adventures as an “investor” continued in post-communist Russia with the gigantic privatizations of energy production and services, without forgetting new speculations on foreign debts in default in Peru and Poland. In 2001, it was Argentina’s turn.

–What was the response from the Obama administration and Congress to the strategy that you have led to counter the campaign of the vulture funds?

–We obtained comments praising the usefulness of the information given out to all the political circles of the country and that has generated special interest from the chairmen of the most important committees, both in the Senate and the House of Representatives, which has led to specific meetings about the true situation of the debt and other issues of interest. It has been indispensable to recover the political space also in the area of international relations. The lobbyists and the pressure groups should not be conducting the foreign policy of a country, as big as it is. I think that the ruling of the U.S. Supreme Court clearly follows this concept. It was a strong defeat for the vulture funds.

Overcoming barriers

–What are the state of the negotiations over the difficulties by Argentina in entering with lemons and beef into the United States?

–We are working on the bilateral level, jointly with the interested sectors and the competent agencies of the U.S. to overcome the trade barriers that impede us from exporting those products. We are optimistic in getting positive results in the coming months. On the multilateral track, in the Sanitary and Phytosanitary Committee of the WTO, Argentina made its energetic complaint over years of delay from the United States in authorizing imports of fresh, refrigerated and frozen beef from the zone free of foot and mouth under vaccination.

–Has the suspension of the generalized system of preferences harmed the country?

–There has not been a relevant negative impact.

[*Translator note on above article: the misspellings by the original article are indicated by (sic) however one use of (sic) that has an asterisk is part of the original text of the article, inferring that the term “Americans” is incorrect.]