“Vultures” & Greg Palast

Featured in an article in In These Times, Greg Palast writes about “vulture” funds, which Palast explains is “a hedge fund industry term for the financiers who buy up the right to collect old loans of the world’s poorest nations, and then use every trick in the book — from lawsuits to bribery to hiring Henry Kissinger’s lobby firm — to muscle destitute countries into turning over their meager foreign aid funds.”

On February 25, the day after BBC Television’s Newsnight ran my report from in front of Hermann’s locked office door, Britain’s Parliament voted to bar vulture funds from using Britain’s courts to grab the assets of poor nations.

And what about the United States? Why are our own politicians cowering behind legislative locked doors?

What we can do and why we should do it requires, first, a little more info on how vultures operate.

In Hermann’s 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’s fund then sued Liberia for the long-forgotten loan, for compounded interest and fees. Hermann filed suit the very week Liberia’s 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.

To no one’s 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.

Read more from Greg Palast and don’t miss Greg Palast when he speaks at Columbia College on Friday, April 9th at 6:30 pm in the 1104 S. Wabash Building in downtown Chicago.

He’ll be talking about “vulture” funds and other recent investigative reports he has produced and much, much more.

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