OK this is old news – from March, but I’ve been meaning to write on this for ages… only just got round to it!
This item shows you the following
- For A2 Global Development – this demonstrates the role of the Capitalist class in keeping developing countries poor – this is due to to the inability of the government to regulate a few unscrupulous hedge fund managers.
- For A2 Crime and Deviance – The power of the elite minority to prevent just laws that the majority believe in coming into force
I first came across Vulture Funds thanks to this article – which is quoted at some length below…
“Would you ever march up to a destitute African who is shivering with Aids and demand he “pay back” tens of thousands of pounds he didn’t borrow – with interest? I only ask because this is in effect happening, here, in British and American courts, time after time. Some of the richest people in the world are making profit margins of 500 per cent by shaking money out of the poorest people in the world – for debt they did not incur.
Here’s how it works. In the mid-1990s, a Republican businessman called Paul Singer invented a new type of hedge fund, quickly dubbed a “vulture fund.” They buy debts racked up years ago by the poorest countries on earth, almost always when they were run by kleptocratic dictators, before most of the current population was born. They buy it for small sums – as little as 10 per cent of its paper value – from the original holder and then take the poor country to court in Britain or the US to demand 100 per cent of the debt is repaid immediately, plus interest built up over years, and court costs.
Let’s look at two examples in two of the countries most aggressively targeted by the vulture funds – Peru, and the Democratic Republic of Congo. I spent a week in a gargantuan rubbish dump in Peru 35 miles north of Lima. It is home to more than 5,000 children. Among them I found Adelina, a little eight-year old smudge, living there in a nest she had built from trash. She spends all day searching for something – anything – she can sell. The vulture funds managed to get $58m out of Peru, on a debt they paid $11m for.
Action Aid launched a campaign to prevent vulture funds from suing indepbted developing countries for their money in British Courts – part of whch involved raising public awareness as most people simply don’t know about them! – see here for more details –http://www.actionaidusa.org/what/intl_policy/vulture_funds/
In March 2010, Labour MP Sally Keeble actually tabled a private members bill to prevent vulture funds from operating in Britain. Having just reviewed some old WDM and Action Aid magazines from that month, they had news reports that assumed these vulture funds would be bloked.
However, because this bill was brought before the commons just before the general election, if one member objected, it would not get passed – This member was a Torie MP Christopher Chope – It is rare that you find a living example of scum – but here is one – Christopher Chope MP – Doing the dirty work of hedge fund managers in the house of commons while the poorest people suffer.
What is really aweful about this affair is that at the time of the vote on the bill, three MPs actually covered their mouths when the question ‘are there any objections’ to this bill was raised, so other people in the house could not be sure who actually objected, it was only afterwards that Chope came out as being scum.
Chope’s contact details, should you wish to send him a message…
House of Commons, London, SW1A 0AA
Tel: 020 7219 5808
Fax: 020 7219 6938
Had this bill gone through it would have been a good example of the state regulating the finance sector – but once again here it fails to do so – and this example shows you the appalling lack of morality amongst some conservative MPs.