NPP USA Warns NDC

* OVER DREADED VULTURE FUNDS*

* *Cognizant of* *NDC’s notoriety of contracting bad loans for political

expediency detrimental to national interest, evident in the vehemently

criticized STX Housing deal, it is prudent we proactively caution it to

avoid the much touted detestable and ill famed Vulture Funds. The

discredited STX Housing deal has been criticized and condemned by

Ghanaians as well as some NDC party functionaries including Nana Konadu

Agyeman Rawlings who has indicated her intentions of investigating the

controversial STX housing deal thoroughly if she becomes president in

2012.Despite the suspicions

of fishy deals and consequential condemnations of the STX housing deals,

NDC is adamant and bent on foisting the deal on Ghanaians at all cost for

parochial political and personal gains at the expense of the concerns and

interests of Ghanaians. We are apprehensive the NDC, in their desperation

to satisfy their selfish political and personal goals, may obtain loans from

the much dreaded Vulture Funds that have run down the economies of most

third world countries.

Vulture Funds are profit oriented financial organizations that buy

distressed debts of poor countries from their creditors at a huge discount

and later sue the poor indebted countries in court once the poor country

has some money (often after debt cancellation) to obtain multiples of the

price they paid for the debt. Vulture Funds recover the original face value

of the debt literally rejecting international debt reduction agreements and

initiatives.

Donor Countries, through The Heavily Indebted Poor Countries (HIPC)

Initiative in 1996, have cancelled over $90 billion debts owed by many

debt-ridden poor third world countries to promote economic development and

poverty reduction in the developing world. In addition, members of the Paris

Club and London Club are also actively involved in debt relief and

restructuring. The objective is to assist these poor countries to use the

money formerly earmarked for debt repayment for development. However, the

activities of Vulture Funds have corrupted, threatened and undermined these

progressive initiatives to emancipate impoverished countries from the

clutches of poverty and underdevelopment. Poor countries across the

developing world are facing Vulture lawsuits.

A 2008 report by the IMF stated that Vulture Funds were engaged in claims

seeking a total of $1.47 billion from HIPCs. The Vulture Fund Donegal

International claimed $55 million from Zambia for a debt it purchased for $3

million. The vulture fund Red Mountain Finance, between 1998 and 2003, sued

the Democratic Republic of Congo in a U. K. High Court and received $ 40

million in judgments and obtained settlements at great expense to

conflict-ridden DRC’s efforts to reconstruct its social and economic

infrastructure. Other Vulture Funds targets include Nigeria, Liberia,

Cameroon, Ethiopia, the Republic of Congo, Honduras, Nicaragua, Sierra

Leone, and Uganda.

Vulture Funds litigations also increase risk levels of companies doing

business with poor countries targeted by Vulture Funds. Vulture Funds,

usually using US and UK courts, attempt to seize the debtor country’s assets

worldwide, interfere with and threaten established trade relationships

between the debtor country and private companies. These actions adversely

affect the capacities of impoverished countries to attract potential trading

partners and investors thereby undermining their development strategies and

provision of the basic needs of their people.

There is a global crusade to outlaw the diabolical exploitation of

impoverished third world countries by Vulture Funds. In the United States,

The Stop VULTURE Funds Act (H.R. 2932),* *introduced in Congress on June

18, 2009, aimed to outlaw profiteering by Vulture Funds on debts held by

countries eligible for debt relief. The Act does this by capping the amount

of profit that a secondary creditor can reap through litigation based on

those debts. The Bill requires, prior to litigations in US Courts, public

disclosure of the names of persons interested in the sovereign debt claim,

how and where the claim was acquired and the purchase price. The bill also

requires certification by Vulture Funds that they have not bribed anybody

while pursuing collection of the defaulted debt claim. The legislation is

supported by numerous non-profit and faith-based organizations including

Jubilee USA Network, TransAfrica Forum, Africa Action, the United Church of

Christ, the Center for Economic and Policy Research and the Quixote Center,

all of which agitate for debt cancellation and a more just international

financial system for the world’s impoverished countries.

Vulture Funds have also garnered concerns among World leaders and financial

institutions that recognize the threat posed by Vulture Funds. In 2007, the

G-7 Finance Ministers voiced their concerns about “the problem of aggressive

litigation against HIPC countries.” UK Prime Minister Gordon Brown condemned

“the perversity where Vulture Funds purchase debt at a reduced price and

make a profit from suing the debtor country to recover the full amount owed

- a morally outrageous outcome." The World Bank called Vulture Funds “a

threat to debt relief efforts.”

It is evident that Vulture Funds have exploitative agenda and governments

that deal with these funds equally have hidden diabolical agenda of

obtaining political and financial gains. As articulated by numerous world

leaders and financial institutions, all purposeful governments that purport

to place their citizenry interests above parochial political and personal

gains must avoid Vulture Funds. We therefore advise the NDC to avoid at all

cost the fearful Vulture Funds and their catastrophic consequences.