An image common to see plastered around Buenos Aires recently proclaims "enough vultures: Argentina is united for a national cause." (Credit: flickr/cc/Benjamin Dumas)
Aug 08, 2014
Argentina filed a suit against the United States in the Hague's International Court of Justice (ICJ) on Thursday in an attempt to force an international resolution to the dispute that caused the country's default last month.
In response to the lawsuit, Judge Thomas Griesa--who made the initial ruling that forced Argentina's default --called a hearing at 3 p.m. on Friday, in which he threatened a contempt-of-court order if Argentina doesn't stop issuing what he says are false statements from Argentine officials that the country payed its debt.
"There has been no payment," said Griesa.
Argentina maintains that it hasn't actually defaulted, since it made a $539 million interest payment on one of its bonds that is due in 2033. But the default was technically triggered after that payment was frozen in a Bank of New York Mellon account by Griesa on the grounds that the country must also pay the hold-out investors in full if it wishes to make payments to the investors that agreed to a restructuring of Argentina's debt payments in 2005.
The suit filed on Thursday alleges that the country's sovereignty was violated by U.S. court decisions that the country must pay in full its debts to the so-called 'vulture funds' that bought the country's debt for pennies on the dollar back in 2001.
The suit is "against the United States of America for the activity of its judicial power," but is "not an action against the country," in the words of President Cristina Fernandez de Kirchner. "It simply means that dependent powers or dependent employees of that country have provoked damage or have acted outside of the law, considering the expressions and resolutions of a municipal judge who wants to trample sovereignty," according to Kirchner.
Eric LeCompte, Executive Director of the religious anti-poverty coalition, Jubilee USA Network, said that the suit's filing "illustrates that we need basic rules of responsible lending and borrowing in place in order to stop predators.
"If we had an international bankruptcy process, countries from Argentina to Grenada never would default and predatory actors are forced to sit at the table," LeCompte continued.
The ICJ has now sent the suit to the United States, which must agree to accept the UN body's jurisdiction in order for the case to go forward. While the U.S. has acknowledged the ICJ's jurisdiction 22 times in the past, it's not clear whether they will in this instance.
The suit follows Argentina's official default which came at the end of July, after the country failed to reach an agreement with NML Capital, an affiliate of Elliott Management Corporation that is owned by billionaire hedge fund manager Paul Singer, who has a history of preying on countries with debt problems.
While the amount in question wouldn't be a problem for Argentina to pay, the country is worried that if it agrees to pay NML and the other hold-outs in full, the 93 percent of investors that did agree to a debt restructuring will also demand payment of the amount they were originally owed. The filing of the suit is therefore an important step towards finding an international solution to the dispute, as even though it is fairly likely the U.S. will refuse the ICJ's authority, if they do so they will essentially be forced to at least offer an "alternative peaceful solution," Argentina Cabinet Chief Jorge Capitanich said Friday.
"From the point of view of the U.S. government, the New York court system has dealt with a contractual dispute in which the executive [branch] cannot intervene. It's a dispute governed by a contract, not by a treaty or international law," Paz Zarate, an international law expert at Oxford Analytica told the Wall Street Journal.
"Obama could prevent vulture hedge-fund billionaire Paul Singer from collecting a single penny from Argentina by invoking the long-established authority granted presidents by the US constitution's 'Separation of Powers' clause."
--Greg Palast, Investigative Journalist
--Greg Palast, Investigative Journalist
But many see a clear gap in what might be 'legal' and what lengths a responsible hedge fund manager will go to in order to increase profits, especially since Singer's predatory actions are outlawed in many countries outside the U.S. Investigative journalist Greg Palast, who has kept files on Singer for years, pointed out in the Guardian on Thursday that there is actually a simple and legal solution to the problem: Singer "can be stopped dead by a simple note to the courts from Barack Obama."
"Obama could prevent vulture hedge-fund billionaire Paul Singer from collecting a single penny from Argentina by invoking the long-established authority granted presidents by the US constitution's 'Separation of Powers' clause," writes Palast. "Under the principle known as "comity", Obama only need inform US federal judge Thomas Griesa that Singer's suit interferes with the president's sole authority to conduct foreign policy. Case dismissed."
Palast goes on to point out that President Bush actually invoked the right to do so when he "blocked Singer's seizure of Congo-Brazzaville's US property, despite the fact that the hedge fund chief is one of the largest, and most influential, contributors to Republican candidates."
But while President Obama has publicly supported Argentina, and notified Judge Griesa of that support while the case was being heard, he has yet to take any official action to curb Singer's predatory financial practices.
Join Us: News for people demanding a better world
Common Dreams is powered by optimists who believe in the power of informed and engaged citizens to ignite and enact change to make the world a better place. We're hundreds of thousands strong, but every single supporter makes the difference. Your contribution supports this bold media model—free, independent, and dedicated to reporting the facts every day. Stand with us in the fight for economic equality, social justice, human rights, and a more sustainable future. As a people-powered nonprofit news outlet, we cover the issues the corporate media never will. Join with us today! |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Max Ocean, Editorial Intern
Max Ocean was an editorial intern at Common Dreams in 2014. He now is Vice President at Subversive Malting & Brewing in Ithaca, NY.
Argentina filed a suit against the United States in the Hague's International Court of Justice (ICJ) on Thursday in an attempt to force an international resolution to the dispute that caused the country's default last month.
In response to the lawsuit, Judge Thomas Griesa--who made the initial ruling that forced Argentina's default --called a hearing at 3 p.m. on Friday, in which he threatened a contempt-of-court order if Argentina doesn't stop issuing what he says are false statements from Argentine officials that the country payed its debt.
"There has been no payment," said Griesa.
Argentina maintains that it hasn't actually defaulted, since it made a $539 million interest payment on one of its bonds that is due in 2033. But the default was technically triggered after that payment was frozen in a Bank of New York Mellon account by Griesa on the grounds that the country must also pay the hold-out investors in full if it wishes to make payments to the investors that agreed to a restructuring of Argentina's debt payments in 2005.
The suit filed on Thursday alleges that the country's sovereignty was violated by U.S. court decisions that the country must pay in full its debts to the so-called 'vulture funds' that bought the country's debt for pennies on the dollar back in 2001.
The suit is "against the United States of America for the activity of its judicial power," but is "not an action against the country," in the words of President Cristina Fernandez de Kirchner. "It simply means that dependent powers or dependent employees of that country have provoked damage or have acted outside of the law, considering the expressions and resolutions of a municipal judge who wants to trample sovereignty," according to Kirchner.
Eric LeCompte, Executive Director of the religious anti-poverty coalition, Jubilee USA Network, said that the suit's filing "illustrates that we need basic rules of responsible lending and borrowing in place in order to stop predators.
"If we had an international bankruptcy process, countries from Argentina to Grenada never would default and predatory actors are forced to sit at the table," LeCompte continued.
The ICJ has now sent the suit to the United States, which must agree to accept the UN body's jurisdiction in order for the case to go forward. While the U.S. has acknowledged the ICJ's jurisdiction 22 times in the past, it's not clear whether they will in this instance.
The suit follows Argentina's official default which came at the end of July, after the country failed to reach an agreement with NML Capital, an affiliate of Elliott Management Corporation that is owned by billionaire hedge fund manager Paul Singer, who has a history of preying on countries with debt problems.
While the amount in question wouldn't be a problem for Argentina to pay, the country is worried that if it agrees to pay NML and the other hold-outs in full, the 93 percent of investors that did agree to a debt restructuring will also demand payment of the amount they were originally owed. The filing of the suit is therefore an important step towards finding an international solution to the dispute, as even though it is fairly likely the U.S. will refuse the ICJ's authority, if they do so they will essentially be forced to at least offer an "alternative peaceful solution," Argentina Cabinet Chief Jorge Capitanich said Friday.
"From the point of view of the U.S. government, the New York court system has dealt with a contractual dispute in which the executive [branch] cannot intervene. It's a dispute governed by a contract, not by a treaty or international law," Paz Zarate, an international law expert at Oxford Analytica told the Wall Street Journal.
"Obama could prevent vulture hedge-fund billionaire Paul Singer from collecting a single penny from Argentina by invoking the long-established authority granted presidents by the US constitution's 'Separation of Powers' clause."
--Greg Palast, Investigative Journalist
--Greg Palast, Investigative Journalist
But many see a clear gap in what might be 'legal' and what lengths a responsible hedge fund manager will go to in order to increase profits, especially since Singer's predatory actions are outlawed in many countries outside the U.S. Investigative journalist Greg Palast, who has kept files on Singer for years, pointed out in the Guardian on Thursday that there is actually a simple and legal solution to the problem: Singer "can be stopped dead by a simple note to the courts from Barack Obama."
"Obama could prevent vulture hedge-fund billionaire Paul Singer from collecting a single penny from Argentina by invoking the long-established authority granted presidents by the US constitution's 'Separation of Powers' clause," writes Palast. "Under the principle known as "comity", Obama only need inform US federal judge Thomas Griesa that Singer's suit interferes with the president's sole authority to conduct foreign policy. Case dismissed."
Palast goes on to point out that President Bush actually invoked the right to do so when he "blocked Singer's seizure of Congo-Brazzaville's US property, despite the fact that the hedge fund chief is one of the largest, and most influential, contributors to Republican candidates."
But while President Obama has publicly supported Argentina, and notified Judge Griesa of that support while the case was being heard, he has yet to take any official action to curb Singer's predatory financial practices.
Max Ocean, Editorial Intern
Max Ocean was an editorial intern at Common Dreams in 2014. He now is Vice President at Subversive Malting & Brewing in Ithaca, NY.
Argentina filed a suit against the United States in the Hague's International Court of Justice (ICJ) on Thursday in an attempt to force an international resolution to the dispute that caused the country's default last month.
In response to the lawsuit, Judge Thomas Griesa--who made the initial ruling that forced Argentina's default --called a hearing at 3 p.m. on Friday, in which he threatened a contempt-of-court order if Argentina doesn't stop issuing what he says are false statements from Argentine officials that the country payed its debt.
"There has been no payment," said Griesa.
Argentina maintains that it hasn't actually defaulted, since it made a $539 million interest payment on one of its bonds that is due in 2033. But the default was technically triggered after that payment was frozen in a Bank of New York Mellon account by Griesa on the grounds that the country must also pay the hold-out investors in full if it wishes to make payments to the investors that agreed to a restructuring of Argentina's debt payments in 2005.
The suit filed on Thursday alleges that the country's sovereignty was violated by U.S. court decisions that the country must pay in full its debts to the so-called 'vulture funds' that bought the country's debt for pennies on the dollar back in 2001.
The suit is "against the United States of America for the activity of its judicial power," but is "not an action against the country," in the words of President Cristina Fernandez de Kirchner. "It simply means that dependent powers or dependent employees of that country have provoked damage or have acted outside of the law, considering the expressions and resolutions of a municipal judge who wants to trample sovereignty," according to Kirchner.
Eric LeCompte, Executive Director of the religious anti-poverty coalition, Jubilee USA Network, said that the suit's filing "illustrates that we need basic rules of responsible lending and borrowing in place in order to stop predators.
"If we had an international bankruptcy process, countries from Argentina to Grenada never would default and predatory actors are forced to sit at the table," LeCompte continued.
The ICJ has now sent the suit to the United States, which must agree to accept the UN body's jurisdiction in order for the case to go forward. While the U.S. has acknowledged the ICJ's jurisdiction 22 times in the past, it's not clear whether they will in this instance.
The suit follows Argentina's official default which came at the end of July, after the country failed to reach an agreement with NML Capital, an affiliate of Elliott Management Corporation that is owned by billionaire hedge fund manager Paul Singer, who has a history of preying on countries with debt problems.
While the amount in question wouldn't be a problem for Argentina to pay, the country is worried that if it agrees to pay NML and the other hold-outs in full, the 93 percent of investors that did agree to a debt restructuring will also demand payment of the amount they were originally owed. The filing of the suit is therefore an important step towards finding an international solution to the dispute, as even though it is fairly likely the U.S. will refuse the ICJ's authority, if they do so they will essentially be forced to at least offer an "alternative peaceful solution," Argentina Cabinet Chief Jorge Capitanich said Friday.
"From the point of view of the U.S. government, the New York court system has dealt with a contractual dispute in which the executive [branch] cannot intervene. It's a dispute governed by a contract, not by a treaty or international law," Paz Zarate, an international law expert at Oxford Analytica told the Wall Street Journal.
"Obama could prevent vulture hedge-fund billionaire Paul Singer from collecting a single penny from Argentina by invoking the long-established authority granted presidents by the US constitution's 'Separation of Powers' clause."
--Greg Palast, Investigative Journalist
--Greg Palast, Investigative Journalist
But many see a clear gap in what might be 'legal' and what lengths a responsible hedge fund manager will go to in order to increase profits, especially since Singer's predatory actions are outlawed in many countries outside the U.S. Investigative journalist Greg Palast, who has kept files on Singer for years, pointed out in the Guardian on Thursday that there is actually a simple and legal solution to the problem: Singer "can be stopped dead by a simple note to the courts from Barack Obama."
"Obama could prevent vulture hedge-fund billionaire Paul Singer from collecting a single penny from Argentina by invoking the long-established authority granted presidents by the US constitution's 'Separation of Powers' clause," writes Palast. "Under the principle known as "comity", Obama only need inform US federal judge Thomas Griesa that Singer's suit interferes with the president's sole authority to conduct foreign policy. Case dismissed."
Palast goes on to point out that President Bush actually invoked the right to do so when he "blocked Singer's seizure of Congo-Brazzaville's US property, despite the fact that the hedge fund chief is one of the largest, and most influential, contributors to Republican candidates."
But while President Obama has publicly supported Argentina, and notified Judge Griesa of that support while the case was being heard, he has yet to take any official action to curb Singer's predatory financial practices.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.