For Immediate Release
Michael Stulman (202) 546-7961
Allow Africa to Seize Control of Its Destiny; Prohibit Vulture Fund Profiteering in US Courts
Civil Society Urges Congress to Pass H.R. 2932, the Stop VULTURE Funds Act
wake of Secretary of State Hillary Clinton's visit to the Democratic
Republic
of Congo (DRC) last week, nearly 50 leading advocacy organizations have
asked
Congress to limit Vulture Fund profiteering from poor country debts at
the
expense of impoverished citizens of the world's poorest nations.
The diverse coalition, which included the NAACP,
the Jubilee
USA Network, TransAfrica Forum, the American Jewish World Service,
the
United Methodist Church and Africa Action called on members of the U.S.
House
of Representatives to sponsor legislation to limit the use of U.S.
courts by
so-called Vulture Funds to generate massive profits from developing
countries.
In a joint letter to Congressional leaders the
groups cited
"unprecedented cooperation," and praised the international effort on
debt
cancellation, resulting in more than $90 billion in bilateral and
multilateral
debt cancellation to 30 countries.
However, that progress is being jeopardized by Vulture Funds,
investors
that acquire the sovereign debt of poor countries for pennies on the
dollar, only
to turn around and sue for huge sums.
According to the letter,
Vulture Funds refuse to work through the international process on debt
cancellation, instead "aggressively pursuing their claims through the
seizure
of assets, litigation and political pressure, seeking repayments that
are far
in excess of the amount that they paid for the debt."
In one example, the letter
mentions an ongoing case between the Vulture Fund FG Hemisphere and the
DRC, stating
that "FG Hemisphere is suing the DRC for $105 million, more than three
times
the amount of the original $30 million loan incurred in 1980 by the
brutal and
corrupt Mobutu dictatorship."
Michael Stulman, associate director for policy and
communications at Africa Action said, "While in the DRC last week,
Secretary of State Clinton spoke of the challenges that the country
faces: a
lack of investment and development, corruption and poor governance and
violence
against women. But one critical issue
did not make her list: Wealthy hedge fund investors making massive
profits on
the backs of the DRC's citizens, some of the poorest in the world."
Currently, in Washington, a judge has ordered the
DRC to pay
up to $80,000 a week as the result of a $105 million suit brought by
the Vulture
Fund FG Hemisphere.
"The DRC is being forced to siphon these
desperately
needed resources from initiatives like health care, education,
combating
HIV/AIDS, and access to clean water to its impoverished citizens to pay
off
wealthy corporations such as FG Hemisphere," said Melinda St.
Louis,
Deputy Director of Jubilee USA Network, an alliance of 80 religious
denominations and faith communities, development agencies, and human
rights
groups working for debt relief. She
adds, "This runs totally counter to the progress made by the U.S.
and the
international community on debt cancellation, through the World Bank's
Highly
Indebted Poor Country (HIPC) effort."
Congresswoman Maxine Waters (D-CA) and Congressman
Spencer
Bachus (R-AL) re-introduced H.R. 2932 in the 111th Congress. The legislation would prevent Vulture Funds
from using U.S. courts to garner the profits they have historically
pursued. According to last week's
letter, "The bill allows recovery of the amount paid for the debt, plus
six
percent simple interest from the date the debt was acquired from a
qualified
poor country." Congresswoman Waters'
legislation would also increase the disclosure requirement for
often-secretive
Vulture Funds prior to taking legal action in a U.S. court.
To read the full text of the letter
and view the letter's signatories
please visit:
http://www.africaaction.org/
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Africa Action is a national organization that works for political, economic and social justice in Africa. Through the provision of accessible information and analysis combined with the mobilization of public pressure we work to change the policies and policy-making processes of U.S. and multinational institutions toward Africa. The work of Africa Action is grounded in the history and purpose of its predecessor organizations, the American Committee on Africa (ACOA), The Africa Fund, and the Africa Policy Information Center (APIC), which have fought for freedom and justice in Africa since 1953. Continuing this tradition, Africa Action seeks to re-shape U.S. policy toward African countries.