The vulture funds play dirty even in the Capitol // By Jorge Arguello

Infonews.com

The vulture funds play dirty even in the Capitol

 

Tuesday, July 5, 2012

 

By Jorge Arguello

 

As it is well known, the vulture funds drop down onto troubled economies seeking with pennies what one day, they hope, will collect 100% of value.

 

The pages of The Hill, the oldest and most recongized daily newspaper in the Congress of the United States, have been transformed in recent weeks into the backdrop of a heavy debate about Argentina’s recovery after the 2001 default, and about the interests and nature of the so-called vulture funds.  On the side of these funds has been Robert Shapiro, an undersecretary of Commerce for economic affairs in the Clinton Administration, now the spokesman for these “investors” who are not presentable to the public light who have found someone to do their “dirty work” for a price, like this ex-official.

 

They’ve worked for more than a decade trying to get astronomical speculative returns from Argentina that they’ve already obtained from other countries in crisis like ours in 2001, and the true owners of these vulture funds, like multimillionaire Kenneth Dart, of EM Ltd., decided to hide themselves and fund the American Task Force Argentina (ATFA), a pressure group charged with fallacies and distortions from which, at a minimum, they hope to make arguments.

 

Until Shapiro, who ATFA gave the public representation of their vulture interests and who seems to have forgotten he served Clinton.  When the ex-president had the option to meet with Dart as a donor to the Democratic campaign, he refused the invitation with this response: “I don’t know what brought Dart to give money to our party, but I don’t want this kind of person anywhere near me.”

 

Dart and his friends in ATFA have spent almost US$3 million in building an aggressive lobby against Argentina in the Congress of the United States and in the New York State Legislature.  In the series of articles in The Hill, Shapiro intentionally distorts facts, misinterprets data to confuse U.S. taxpayers and, for a notable failure to handle issues he doesn’t understand, made a series of false and serious accusations on issues that go beyond the bold financial interests he represents.

 

Let’s go over the atrocities that he is trying to push in the U.S. Congress.  According to the vulture funds, Argentina owes US$3.5 billion “to the Americans” (sic) and refuses to pay.  As it is known, Argentina restructured more than 92% of its debt in a complex process.  Those US$3.5 billion are a nominal amount on the claims in court in the United States and only one in ten of those dollars are demanded by U.S. citizens: the rest are from Americans that decided to establish their domicile in other countries in order to… evade taxes!  Believe it or not, from that place they are demanding through the courts 5000% of their initial investment in debt bonds. 

 

Against the fallacy that ATFA proclaims, Argentina has totally cooperated with U.S. courts, but international laws confirm that Argentina have the same terms from a restructuring for all the bondholders, without discrimination in favor of those who speculated with other results like the vulture funds.

 

Shapiro has tried to make people in the United States believe that the Obama Administration has insistently demanded that Argentina comply with “its legal obligations”.  It suits to recall the words of his Secretary of State, Hillary Clinton, in Buenos Aires, when she met with President Cristina Fernández de Kirchner: “I believe that Argentina had made great progress paying down its debt, impressive and in a few years .. From which I know, the GDP-debt ratio is lower than in the United States.  That is that, regardless of how it’s being done, in Argentina it’s working.”

 

We don’t tire to recall that, when Argentina fell into default in 2001, the GDP had fallen more than 20% since 1998, unemployment was above 25% and poverty was at 50%, the banks failed and deposit holders lost their savings.  The restructuring of Argentina’s debt has been one of the most successful in the world, having involved 152 kinds of bonds in seven different currencies under 8 different legislative jurisdictions.

 

What the vulture funds like EM Ltd and NML Capital Ltd (who control ATFA) forget to say is that Argentina finished that process after 70 consultations with creditor groups.  It was done without international financial help and, at the same time, it continued paying debt to IMF until it was completely paid off.

 

Despite their desperate attempts, ATFA only has convinced a handful of legislators, who are pushing rules against Argentina, like the “Judgment Evading Foreign States Accountability Act of 2011”, supported by less than 7% of the representatives and only by its own lead sponsors in the Senate.

 

The caricature of Argentina that Shapiro makes not only speaks to his lack of knowledge but the impotence that is beginning to be seen among the vulture funds and their public representatives in the growing isolation they are suffering in the measure of the passing of time and shown in the facts that Argentina is committed to honoring all and every one of its debts.

 

As it is well known, the vulture funds swoop down on economies in crisis seeking, for pennies, to some day, they hope, collect 100% of their value.  In the same way, only in the fictitious scenario of a country where everything comes out negatively, like they paint about Argentina, Shapiro and his friends would have some chance of winning some support for their claims now.

 

It is evident that for these funds, vultures but powerful, their only alternative now is to weaken Argentina as much as they can to impose conditions.  If they had an emblem and wanted to carry a motto, for the vulture funds it would be: “The worse for Argentina, the better for our pockets.”