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FACE 2 FACE WITH THE VULTURES

FACE 2 FACE WITH THE VULTURES. Jubilee Grassroots Conference 08 By Briggs Bomba Africa Action With research support from Uduak Bassey & Atlang Mompe. Meet Donegal International.

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FACE 2 FACE WITH THE VULTURES

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  1. FACE 2 FACEWITH THE VULTURES Jubilee Grassroots Conference 08 By Briggs Bomba Africa Action With research support from Uduak Bassey & Atlang Mompe

  2. Meet Donegal International • “Donegal International Ltd., incorporated in the British Virgin Islands on December 18, 1997, was established for the purpose of holding and managing the distressed debt purchased from Romania and owed by Zambia…” • Director: Michael Sheehan • Lawyer, who markets himself as a “an expert in debt restructuring.” • Previously, General Counsel at the Debt-for Development Coalition, Inc., a USAID funded non-profit organization established to reduce the debt burden in developing countries using debt-for-equity swaps.

  3. Welcome to Zambia Life expectancy: 40.5 Population living below $1 a day(%): 63.8 Population living below $2 a day(%): 87.2 <5 mortality rate/1000 births: 182 HIV prevalence(% aged 15-49): 17

  4. more on Zambia… • Population not using an improved water source(%): 42 • Population living below the national poverty line(%): 63.8 • Probability at birth of not surviving to age 40(%): 53.9

  5. The Case • Zambia borrowed 15 million from Romania in 1979. • The money was to buy machinery for the agric sector. • In 1999 the two countries negotiated to liquidate the debt for $3 million. • Donegal International(DI) swooped at the last minute & bought the debt for $3.3 million.

  6. case continues… • In 1999, the debt total value was $30 million. • By 2003 it had gone up to $44 million. • Following Zambia’s 2005 debt cancellation, DI sued for $55 million. • Ultimately DI was awarded $15 million.

  7. Judge Andrew Smith • “ (found) the actions of Donegal reprehensible, but not illegal.” • "I am concerned, of course, with the legal questions that are raised by the applications before me and not with questions of morality or humanity."

  8. Matters of Fact • In 1999 DI donated $2 million dollars to Zambia’s Presidential Housing Scheme. • By accepting the donation, Zambia acknowledged formally/legally DI’s ownership of the debt. • DI initially tried to swap debt for equity( in textiles, lottery, privatization).

  9. more facts… • When debt for equity swap failed DI sued in the British Virgin Islands. • In an un-transparent manner Zambia signed agreement with DI acknowledging the debt & empowering DI to sue in British courts. • Officials involved were later tried for corruption.

  10. Just Don’t Pay • Congo Brazzaville • Argentina • Peru

  11. Elliot Ass vs. Congo Brazzaville • Congo • Controls Africa’s 4th largest oil reserve bringing more than $11.6 billion a year. • 2/3 of population leaves on less than $1 a day.

  12. Elliot International • Founded by NY based billionaire, Paul Singer. • Singer is one of the biggest Republican donors; In 2004, he gave $1.2 million. • Singer’s assets have grown by $5 billion in the last 3 years.

  13. The Case • Elliot International bought Congo's debt for $10 million, and got $127 million through litigation. • Congo refused to pay. • Elliot International fought a legal battle over 10 years targeting to seize Congo's exports & banks handling Congo’s money. • Elliot’s forensic investigators exposed obscene corruption by Congo’s ruling elite. • Stung by corruption expose’ and persistent harassment, Congo’s government finally agreed to settle out of court.

  14. Opportunity Cost • Education • Health Care • Development • Poverty Eradication • and more…

  15. Notes… • Mind their language • Big politics & big business • Financialization of capital • Business unchecked becomes criminal • Whose law?

  16. The Next Frontier… • Liberia • Haiti • Mozambique • Cameroon • …

  17. Another World is Possible • Thank You…

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