August, 23 2013, 05:00pm EDT
Hedge Funds Win 2nd Circuit Court Ruling in NML Capital vs. Argentina; Global Poor Lose
Argentine Bonds Surge as Ruling Delayed as U.S. Supreme Court Considers Taking Appeal
WASHINGTON
In the landmark case of NML Capital, LTD v. The Republic of Argentina, the New York based U.S. Circuit Court upheld a previous ruling ordering Argentina to pay $1.33 billion to hold out hedge funds. Argentine bonds soared and antipoverty advocates held their breath as the 2nd Circuit Court delayed the ruling until the U.S. Supreme Court decides if they will take appeals on the case.
"Our eyes are on the U.S. Supreme Court. We pray the court will not forget the world's poor as they consider taking the case," asserted Eric LeCompte, Executive Director of the religious antipoverty campaign known as Jubilee USA.
In June, Argentina preemptively filed an appeal to the U.S. Supreme Court asking to overturn an earlier U.S. 2nd Circuit Court ruling that ordered Argentina to pay holdout creditors. Now that the 2nd Circuit Court has upheld the ruling, the fate of the case lies in the hands of the U.S. Supreme Court. In July, France filed an amicus brief to the U.S. Supreme Court in support of Argentina's request. The International Monetary Fund's Christine Lagarde planned a similar U.S. Supreme Court filing because of the case's significant implications on poverty and country debt restructurings. Although Lagarde has maintained her concern about the hedge fund behavior, the IMF did not file with the U.S. Supreme Court based on advice from the U.S. Treasury. The U.S. Treasury will likely file in support of Argentina if the U.S. Supreme Court accepts the case. The U.S. has filed in support of Argentina at various stages of the case before lower courts because of the appeal's impact on global debt restructuring, poor country access to credit and state sovereignty rights.
"The religious community is saddened by the 2nd Circuit's decision as it hurts poor people around the globe," shared LeCompte. "It's up to the U.S. Supreme Court now to overturn the 2nd Circuit ruling in order to prevent these hedge funds from targeting poor countries and struggling economies."
NML Capital, a subsidiary of Elliott Management, purchased Argentine debt cheaply when the nation defaulted in the early 2000s. Since then, ninety-two percent of debt holders restructured. Holdout creditors, led by NML Capital, rejected restructuring deals and continue to sue Argentina for the full amount. Hedge funds, like NML Capital, that purchase deeply discounted debt of poor or financially-distressed countries and then sue to make high profits are known as "vulture funds." Often, these funds try to collect off of funds meant to benefit the poorest in developing countries.
In addition to the U.S. raising concerns, the IMF and World Bank have continually expressed concern over this hedge fund behavior. German courts sided with Argentina and rejected similar hedge fund claims to Argentine assets in Germany.
At the end of 2012, the U.S. 2nd Circuit Court ordered Argentina to pay holdout creditors $1.3 billion upon its interpretation of a pari passu, or parity clause. Argentina appealed and the U.S. Court suspended the ruling to hear new oral arguments in February 2013. After arguments, the court ordered Argentina to outline an alternate payment plan to holdout creditors. Holdout creditors rejected the plan that was essentially the same deal that ninety-two percent of creditors previously took. The 2nd Circuit upheld its ruling and interpretation of pari passu or the parity clause in today's ruling.
"Unfortunately, the decision of the 2nd Circuit is too narrow and short-sighted. Their interpretation of the parity clause is deeply flawed," noted LeCompte.
Read the case here.
Read more on our webpage dedicated to the case.
Jubilee USA Network is an interfaith, non-profit alliance of religious, development and advocacy organizations. We are 75 U.S. institutions and more than 750 faith groups working across the United States and around the globe. We address the structural causes of poverty and inequality in our communities and countries around the world.
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'McCarthyism Is Alive and Well': Google Fires 28 for Protesting Israel Contract
"These mass, illegal firings will not stop us," said organizers. "Make no mistake, we will continue organizing until the company drops Project Nimbus and stops powering this genocide."
Apr 18, 2024
The peace coalition No Tech for Apartheid accused Google of a "flagrant act of retaliation" late Wednesday night as the Silicon Valley giant announced it had fired 28 workers over protests against its cloud services contract with the Israeli government.
The firings came after Google organizers held two 10-hour sit-ins at the company's offices in Sunnyvale, California and New York City, demanding the termination of Project Nimbus, a $1.2 billion contract under which Google and Amazon provide cloud infrastructure and data services for Israel—without any oversight regarding whether the Israel Defense Forces uses the services in its occupation of Palestinian territories and bombardment of Gaza.
Workers have denounced Project Nimbus since it was announced in 2021, but Israel's killing of at least 33,970 Palestinians in Gaza since October and its intentional starvation of civilians led employees to escalate their protests.
No Tech for Apartheid said in a statement that Google officials called the police to both offices to arrest nine protesters—dubbed the Nimbus Nine—on Tuesday morning, before utilizing "a dragnet of in-office surveillance" to fire nearly two dozen other employees on Wednesday.
"They punished all of the workers they could associate with this action in wholesale firings," said the coalition, which includes Jewish Voice for Peace and MPower Change, a Muslim-led anti-war group.
Google accused the workers of "bullying," "harassment," defacing property, and physically impeding other employees—allegations No Tech for Apartheid rejected as it noted organizers "have yet to hear from a single executive about" their concerns over Google's collaboration with Israel.
"This excuse to avoid confronting us and our concerns directly, and attempt to justify its illegal, retaliatory firings, is a lie," said the workers. "Even the workers who were participating in a peaceful sit-in and refusing to leave did not damage property or threaten other workers. Instead they received an overwhelmingly positive response and shows of support."
The organizers staged the sit-ins on the heels of reporting in Time magazine about new negotiations between Google and the Israeli government regarding further potential tech contracts.
Kate J. Sim, a child safety policy adviser at Google who said she was among those fired this week, said the terminations show "how terrified [executives] are of worker power."
Google employees have a history of harnessing worker power to change policies at the company. In 2018, Google terminated a deal with the U.S. Defense Department to develop drone and artificial intelligence (AI) technology through a contract called Project Maven. The decision followed the resignations of several employees and the condemnation of thousands of workers.
Calling Google CEO Sundar Pichai and Google Cloud CEO Thomas Kurian "genocide profiteers," No Tech for Apartheid said Wednesday that they will not stop demonstrating against Project Nimbus until they get a similar result.
"The truth is clear: Google is terrified of us," said the group. "They are terrified of workers coming together and calling for accountability and transparency from our bosses... The corporation is trying to downplay and discredit our power.
"These mass, illegal firings will not stop us," No Tech for Apartheid added. "On the contrary, they only serve as further fuel for the growth of this movement. Make no mistake, we will continue organizing until the company drops Project Nimbus and stops powering this genocide."
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While applauding the U.S. House of Representatives' bipartisan passage of a bill to ensure that "law enforcement and intelligence agencies can't do an end-run around the Constitution by buying information from data brokers" on Wednesday, privacy advocates highlighted that Congress is trying to extend and expand a long-abused government spying program.
The House voted 219-199 for Fourth Amendment Is Not For Sale Act (FANFSA), which won support from 96 Democrats and 123 Republicans, including the lead sponsor, Rep. Warren Davidson (R-Ohio). Named for the constitutional amendment that protects against unreasonable searches and seizures, H.R. 4639 would close what campaigners call the data broker loophole.
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"We're grateful that the House passed these vital and popular protections," she added. "The bill would prevent flagrant abuses of our privacy by government authorities in league with unscrupulous third-party data brokers. Making this legislation into law with Senate passage too would be a decisive and long-overdue action against government misuse of this clandestine business sector that traffics in our personal data for profit."
Wednesday's vote followed the House sending the Reforming Intelligence and Securing America Act to the Senate. H.R. 7888 would reauthorize Section 702 of the Foreign Intelligence Surveillance Act (FISA), which allows for warrantless spying on noncitizens abroad but also sweeps up Americans' data.
The House notably included an amendment forcing a wide range of individuals and businesses to cooperate with government spying operations but rejected an amendment that would have added a warrant requirement to the bill, which the Senate could vote on as soon as Thursday.
Noting those decisions on the FISA reauthorization legislation, Ruddock stressed that "today's vote is a victory but follows a recent loss and ongoing threat as that Section 702 bill moves to the Senate this week too."
"As FANFSA and the 702 reauthorization move to the Senate, lawmakers in that chamber need to take a stand for the rights of people in the United States," she argued. "That means passing FANFSA and reforming Section 702 authority—and prioritizing everyone's First and Fourth Amendment rights."
Jeramie Scott, senior counsel and director of the Electronic Privacy Information Center's Project on Surveillance Oversight, also praised the House's FANFSA passage on Wednesday.
"The passage of the Fourth Amendment Is Not For Sale underscores the extent to which reining in abusive warrantless surveillance is a bipartisan issue," Scott said. "We urge the Senate to take up this measure and close the data broker loophole."
Kia Hamadanchy, senior policy counsel at ACLU, similarly said Wednesday that "the bipartisan passage of this bill is a flashing warning sign to the government that if it wants our data, it must get a warrant."
Hamadanchy added that "we hope this vote puts a fire under the Senate to protect their constituents and rein in the government's warrantless surveillance of Americans, once and for all."
Sen. Ron Wyden (D-Ore.), a critic of the pending 702 bill and FANFSA's lead sponsor in the upper chamber, called the the House's Wednesday vote "a huge win for privacy" and said that "now it's time for the Senate to follow suit."
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"This is the evidence that President Biden's talk about a two-state solution is nothing but idle talk," said one former Lebanese diplomat.
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As the United Nations Security Council prepares to vote Thursday on Palestine's bid to become a full U.N. member, the Biden administration—which claims to support Palestinian statehood—is lobbying UNSC nations in an effort to wrangle enough "no" votes so that the United States can avoid resorting to a veto.
Leaked cables obtained by The Intercept show U.S. pressure on Security Council members including Malta—which currently presides over the body—and Ecuador.
While claiming that President Joe Biden backs "Palestinian aspirations for statehood," one of the cables asserts that "it remains the U.S. view that the most expeditious path toward a political horizon for the Palestinian people is in the context of a normalization agreement between Israel and its neighbors."
"We therefore urge you not to support any potential Security Council resolution recommending the admission of 'Palestine' as a U.N. member state, should such a resolution be presented to the Security Council for a decision in the coming days and weeks," the document advises.
The U.S. argument essentially is that the U.N. should not create an independent Palestinian state by fiat—even though that's precisely how the world body voted in 1947 to establish the modern state of Israel.
The renewed push for Palestine's U.N. membership comes as Israel wages a genocidal war on the Gaza Strip. The Palestinian Authority, which hasn't controlled Gaza for nearly two decades, rejected the Biden administration's requests to hold off on seeking full membership.
"We wanted the U.S. to provide a substantive alternative to U.N. recognition. They didn't," one unnamed Palestinian official toldAxios on Wednesday. "We believe full membership in the U.N. for Palestine is way overdue. We have waited more than 12 years since our initial request."
As The Intercept's Ken Klippenstein and Daniel Boguslaw noted:
Since 2011, the U.N. Security Council has rejected the Palestinian Authority's request for full member status. On April 2, the Palestinian Observer Mission to the U.N. requested that the council once again take up consideration of its membership application. According to the first State Department cable, U.N. meetings since the beginning of April suggest that Algeria, China, Guyana, Mozambique, Russia, Slovenia, Sierra Leone, and Malta support granting Palestine full membership to the U.N. It also says that France, Japan, and Korea are undecided, while the United Kingdom will likely abstain from a vote.
Along with the United States, China, France, Russia, and the United Kingdom are permanent members of the UNSC, so they also have veto power.
Ahead of Thursday's planned vote, Spain has been doing its own lobbying in Europe to build greater support for Palestinian statehood. At a joint Tuesday press conference with Spanish Prime Minister Pedro Sánchez, Slovenian Prime Minister Robert Golob said the question is "when, not if, but when is the best moment to recognize Palestine."
Belgium—which is seeking economic sanctions against Israel in response to its genocidal war on Gaza—is expected to join Spain's push for Palestinian statehood after the country's European Union presidency expires in June.
Currently, 139 of the U.N.'s 193 member states recognize Palestine as an independent state.
Israeli Prime Minister Benjamin Netanyahu—who has also claimed to support a so-called "two-state solution"—has alternately boasted about thwarting Palestinian statehood.
Critics pointed to the leaked cables as more proof of U.S. duplicity and double standards on the Israel-Palestine issue.
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