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Sunday, January 17, 2021

Bush Could Back Zambia in Battle Against Vulture Fund

Headlines Bush Could Back Zambia in Battle Against Vulture Fund

george-bush-1.jpgPresident Bush could come to the aid of Zambia against a so-called “vulture” fund demanding millions of dollars in debt payments. He is reported to be concerned that investors from the Washington DC area won a court case in Britain last week which enabling them to claim $20m to $40m (£20m), including interest and costs, from the poor African nation – as much as it has received in debt relief from rich countries in recent years.

The fund is Donegal International, owned by US resident Michael Sheehan. In 1999 Donegal bought up some Zambian sovereign debt at a fraction of its original value and has pursued the country through the courts to enforce full repayment.

The high court in London last week said Donegal’s actions were legal but the judge, Justice Andrew Smith, made clear his distaste for what it was doing. He ordered Zambian assets in Britain frozen until a fresh hearing next month.

Donegal is likely to pursue Zambian assets in the US. However, Washington’s powerful congressional judiciary committee has seen a BBC Newsnight report on the case and is expected to investigate Donegal. The committee’s chairman, Congressman John Conyers, said he had drawn the tape, by reporter Greg Palast, to the attention of the president. Mr Conyers told US television that Mr Bush had said he knew nothing of the case but had asked his staff to look into it. “It’s our position that the Foreign Corrupt Practices Act and the comity doctrine brought from our constitution allows the president to require the courts defer in individual suits against foreign nations. And so, we’re conducting a couple of things,” Mr Conyers said.

“First of all, we want to know where these practices are going on at the present time, and, two, how we can get this information to President Bush so that he can, as he indicated to us, stop it immediately.”

Mr Bush has the power to block collection of debts by vulture funds, either individual ones or all of them, if he considers it to be at odds with US foreign policy, in this case debt relief for poor countries.

Donegal bought the debt, with a face value of $30m, from Romania in 1999 for less than $4m. Zambia agreed to pay Donegal $15m in return for a payment to the then president’s favourite charity. This payment, exposed by Mr Palast but which Mr Sheehan denies was a bribe, could mean Donegal falls foul of the US Foreign Corrupt Practices Act.

Adrian Lovett at Oxfam welcomed Mr Bush’s possible intervention. He said 5,000 campaigners had emailed Donegal urging it not to take money from Zambia.

And in another development, the Debt Advisory International (DAI) in Washington DC has launched a petition asking for people to call during the week of February 19-23, on 202-463-2188 and tell Michael Sheehan, the owner of DAI and Donegal International, not to take up to $20 million from Zambia!
When people call, they should say:

“My name is X and I am calling from City, State, Country.

I am calling to urge Michael Sheehan to do the right thing: don’t take money from Zambia.

I am alarmed that Donegal International is making money from one of the poorest countries in the world. I urge you not to take this money from Zambia. Donegal bought this debt cheaply when Zambia was already eligible for debt relief. It is now seeking to extract money from a country that has recently received life-saving debt cancellation.

I urge you not to demand this money. Zambia cannot afford to be paying out millions of dollars.”

6 COMMENTS

  1. hi,greetings to you all.iam zambian i really feel sad about the whole thing zambia is not a rich country that one should demand for millions. dont forget that you third countires have developed from us. have mercy on poor african countries .kc.

  2. hi,greetings to you all.iam zambian i really feel sad about the whole thing zambia is not a rich country that one should demand for millions. dont forget that you third countires have developed from us. have mercy on poor african countries .kc.

  3. I would like to thank president Bush for the interest he and his administration has shown in the unfortunate financial situation Zambia has found herself into at the hands of Michael Sheehan. This man Michael is indeed a vulture who should be ashamed of himself and his activities stopped at all costs. I am sure there are other better business ventures Michael can make money from other than preying and taking advantage of poor countries like Zambia.
    I hope this will also serve as a lesson to the Zambian government not to act out of desperation and engage in deals they do not fully understand or which may have serious consequences in case of default.

  4. I would like to thank president Bush for the interest he and his administration has shown in the unfortunate financial situation Zambia has found herself into at the hands of Michael Sheehan. This man Michael is indeed a vulture who should be ashamed of himself and his activities stopped at all costs. I am sure there are other better business ventures Michael can make money from other than preying and taking advantage of poor countries like Zambia.Typical vulture behavior.
    I hope this will also serve as a lesson to the Zambian government not to act out of desperation and engage in deals they do not fully understand or which may have serious consequences in case of default.

  5. This debt arrangement was done when Fred Chiluba was at the helm (1999). It underscores the dubious and corrupt nature of everything Chiluba’s administration had engaged in.There was no attempt by Chiluba’s administration at the time to expose this arrangement to the Zambian people and seek informed legal and international opinion, let alone necessary assistance on the matter. Any lessons learnt? Let the people of Zambia insist today, that thenceforth every foreign debt our government conceives of must first be subjected to Parliament’s thorough scrutiny and ratification. We need urgent legislation in this regard. Local and international pressure against Vulture Funds’shylock practices must be stepped up, but our own government must be held to account. Already, Minister Magande has started piling up debt from China even before ink dries up on the HIPIC “debt relief” cancellation page. A recent loan of $34 million from China makes no sense at all(for whatever excuse that loan may be contracted), especially when one considers that Zambia can easily raise that money locally from own resources in view of the huge profits being made by the Mining companies in Zambia. These are the kind of loans that shall forever be a yoke on Zambia’s neck and enslave future generations ad infinitum. God save us!

  6. The lessons learnt from this Judgment are that there is a lot of work we need to do in-house. we need to clean the system from corruption because for us who have read the Judgment, the roles played by some senior officials is rather disappointing. I agree we need to keep a tab on the commitments being made by our leaders. I recently saw an adveert and aI agreed with it, we are living in this world having borrowed it from our children, so the question is what are leaving them with?

Comments are closed.

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