NEW LEGISLATION WOULD OUTLAW VULTURE FUND PROFITEERING
By Melinda St. Louis
Thanks to efforts of the global Jubilee campaign, the Democratic Republic of Congo (formerly Zaire) began receiving debt relief from the World Bank and IMF as part of the Highly Indebted Poor Country (HIPC) Initiative in 2003 and continues to work to meet the conditions for full cancellation. Now, a lawsuit brought by FG Hemisphere, a known Vulture Fund, threatens to swoop in to profit off of this critical debt relief at the expense of the impoverished people of the DRC.
In 1980, the brutal and corrupt Mobutu dictatorship took out a $30 million loan with the Sarajevo-based company ENERGOINVEST to supposedly construct a hydroelectric facility and an electric power line. The debt remained in default for more than 20 years. After the DRC qualified for debt relief, FG Hemisphere bought ENERGOINVEST’s claim for an undisclosed amount. FG Hemisphere pursued the claim in the Washington, DC court system, suing the DRC for $105 million — more than three times the original price of the debt As partial payment, FG Hemisphere tried to seize the DRC’s embassy properties in DC. The DC courts rejected this claim, but ordered the DRC to document all of its assets outside the country. The DRC failed to locate all of the documents, arguing that the court’s [Image:act.jpg]
What Future? Young girl at watertap in the DRC. Vulture funds take money taht could be used for education and clean water
demands were overly broad and burdensome, and now faces the threat of fines of an additional $4 million per year.
The people of the DRC — struggling to emerge from crushing poverty, colonial rule, brutal dictatorship, civil are and cold war intervention — should not be forced to prioritize repayment of this decades-old debt, taken on by a corrupt and unaccountable regime, plus fines, interest and legal fees. Jubilee USA is leading a coalition to stop this type of practice by vulture funds. Representatives Maxine Waters (D-CA) and Spencer Bachus (R-AL) introduced the Stop VULTURE Funds Act (HR-2932) in June.
TAKE ACTION to gain support for the Stop VULTURE Funds Act by calling your Member of Congress at 202-224-3121 and urging him/her to co sponsor HR 2932
LEARN MORE about Vulture Funds at www.stopvultureculture.org