Here’s a scenario. I may be a little off on my details, but this should get the point across.
Zambia, a country in Africa, is extremely poor and is in desperate need of debt relief. Zambia borrowed $15 million from Romania, but has since gone completely broke and is unable to pay their debt to Romania. Zambia contacts Romania and works out an arrangement whereby if Zambia agrees to pay Romania $3 million, Romania will write off the $15 million debt.
However, before Zambia and Romania can close the deal, a company like Debt Advisory International sweeps in, buys the debt from Romania for $3 million and then sues Zambia for the entire debt, plus interest. The total suit is now for something like $42 million, nearly three times the original principle amount of the loan. For a country that couldn’t afford to repay the original debt of $15 million, this is just devastating.
This ‘fleecing’ by Debt Advisory international, run by Michael Francis Sheehan is but one example. There are very similar examples of a billionaire named Paul Singer pulling the same crap on the likes of Peru and Congo.
I don’t know all the details, but apparently, President Bush has the constitutional power to stop this from happening, but has apparently decided not to intercede. The companies are somehow tied to the White House in the way of campaign finance. Here’s how that works…
Bush gives these poor countries debt relief in the form of forgiven debt. However, rather than allowing countries like Congo or Zambia to benefit from this relief which has come at the cost of the American Taxpayer, he simply turns a blind eye to the inner workings of these vulture funds. The vulture funds, in turn, donate millions toward campaign finance. The losers: the countries to whom we offer these benefits, plus interest; and the US taxpayer. After all, where do you think all the relief funds are coming from in the first place?
A non-profit debt relief and economic justice group called Jubilee USA is fighting to stop these vulture funds from destroying the already precarious financial situations of these debtor nations.
If you’d like more information on this topic, please check out the segment on Democracy Now! which discusses this topic. Also, visit the site of Jubilee USA for more information regarding what they’re doing to combat this injustice.