Yesterday, the financial vultures, the carcass-chewers who were preying on the dirt-poor African nation of Liberia, gave up.
Two shadowy vulture funds, which had won a $43 million court judgment against Liberia, agreed to accept only $1.4 million to settle their claim following an investigation by our BBC Newsnight team. We had sought to determine if the vulture funds were covers for an elaborate fraud scheme. They folded rather than face further scrutiny and attacks from activists, Parliaments and Congress.
on the dollar, secretly bought the right to collect a $6 million debt owed by Liberia.
Hermann and his flock of vulture partners demanded Liberia pay $43 million – a devastating sum for that nation – or he would, in effect, block aid funding for Liberia’s recovery from civil war. The nation was now Hermann’s economic hostage.
I was investigating the strange links between Hermann and a company named Hamsah Investments; it smelled of fraud. Tipped off that I was about to arrive with a camera crew to question …more
Some vultures have feathers, but some have fancy offices and huge homes. Tonight, BBC investigative reporter Greg Palast follows the trail of one “vulture fund” chief, from a locked office door in New York to mud-brick houses in Africa.
Reporter Greg Palast outside the office of New York vulture fund. The name plaque has been removed and the staff locked inside.
How strange. When I arrive at the offices of Eric Hermann at hedge fund FH International, just outside New York City, the company’s corporate sign is unbolted from the wall and the suite number removed from the door.
But wait … I hear noises inside the office. Huh? I knock on the locked door and out steps the office building’s security manager.
“Guys, they don’t want to be interviewed. They don’t want to be seen. So we are going to have to ask you to leave the building.”
“And do you know why they took the sign off?”
His reply to our cameras, “I have no clue.”
But we do.
Mr. Hermann is the principle owner of a so-called “vulture fund” which attempted to seize more than $20 million from the war-wounded nation of Liberia.
Mr. Hermann is known in the finance business as a debt “vulture.” He and his associates buy up the debt of the poorest nations on the planet, usually for pennies on the dollar, then sue or use other means to squeeze the nations to pay ten times, even a hundred times, what the vulture fund paid for the debt.
The effect of Hermann’s financial maneuvers earns little applause in Liberia. In that African democracy, diplomat Winston Tubman tells us what he would say to vulture fund operators, “‘Do you know you are causing babies to die all over Liberia?'”
Vultures defend themselves by vomiting on their enemies. In Britain last week, terrified vultures puked up a Tory MP named Christopher Chope.
Two weeks ago, the day after the 25 February broadcast of our investigation on BBC Television of financial vultures preying on the world’s poorest nations, the British Parliament voted to effectively put them out of business in the UK. A rare victory for victims.
But last Friday, MP Chope used a Parliamentary gimmick to kill the bill.
Chope, I should say, has not confessed to the deed. The cowardly little piece of vulture puke would not admit he’d put the knife in the back of the law. However, vulture vomit has a truly vile stench, impossible to wash off; so activists were able to sniff him out.
Vulture funds buy up Third World nations’ debts at pennies on the dollar then sue these nations for ten or a hundred times what the funds paid for the securities. The Debt Relief (Developing Countries) Bill would have barred vultures from using UK courts.
Whether the law ultimately takes effect may depend on the outcome of the UK election. Though all parties in the UK back the anti-vulture law, the Conservatives’ commitment is apparently hobbled by some of their members’ preference for dining on the dead.
When I was in West Africa in February, I met with former UN diplomat Winston Tubman, who asked the vultures, “Don’t you know you are causing babies to die all over Liberia?”
Will the honorable MP Mr. Chope answer the question?
Greg Palast’s investigations can be seen on BBC Television Newsnight. Sign up to receive Palast’s reports at www.GregPalast.com…more
A week ago Friday, the day after BBC Television broadcast of our investigative report on Liberia vultures, Britain’s Parliament voted to put an end to the creepy business of financial “vultures” who siphon off aid money through manipulating Third World nations’ debt.
And our prior report on financial tricksters, on Democracy Now!, motivated two congressmen to confront the President personally, in the Oval Office with our findings. And now legislation has jets on in the USA.
We’ve kicked vulture butt, but now we need new boots.
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Greg Palast is an investigative reporter for BBC Newsnight and the author of Armed Madhouse and The Best Democracy Money Can Buy. Subscribe to Palast’s Newsletter and podcasts. Follow Palast on Facebook and Twitter.
Ellen Johnson Sirleaf, the president of Liberia, is urging MPs to back a bill banning vulture funds from using British courts to prey on poor countries when it comes to a vote on Friday. Liberia lost a $20m (£13m) case in London last year against two so-called vultures. Such funds buy up the loans of poor governments, wait for them to win from the international community, and then use courts to pursue the countries for assets.
Sirleaf said: “We’ve been waiting for a parliament or an assembly to take this kind of hard decision. I hope the US Congress and maybe some others in Europe will pick up this gauntlet and will follow the example of Britain.”
An investigation for BBC’s Newsnight, to be broadcast tonight, has uncovered allegations that speculators subverted the international debt relief process for Liberia, in an attempt to gain more money from its government and international donors than 97% of its other creditors accepted.