Stop the Vulture Culture: The Real Life Story of Vulture Funds

By Hayley Hathaway

Do secondary debt markets, hedge funds, and offshore banking make you want to dance?

Not until now. Jubilee USA's newest video brings us the "real life story of vulture funds."  These predatory funds buy poor countries' defaulted debt for pennies on the dollar, then sue for huge profits - the original amount of the debt plus sky-high interest and legal fees - once the country gets new resources thanks to debt cancellation.  International debt cancellation should mean more resources for vital education, health care, and infrastructure, not more money in the pockets of wealthy scavengers. Vulture Fund profiteering is completely immoral, but currently totally legal. Instead of getting overwhelmed by this cruel reality, we decided to show Vulture Funds for what they are: ridiculous and absurd.

This past fall, Liberia fell under two Vultures’ attack and was ordered to pay them $20 million from a debt dating back to 1978.  Liberia is one of the most impoverished countries in the world; the $20 million siphoned off by the Vulture Funds is equal to 105% of the country's education budget and 155% of its health budget in 2008.  In 2006, Zambia was forced to pay a Vulture Fund $15 million, over 60% of Zambia's debt cancellation savings that year.

Our video describes the most recent Vulture activity occurring right under our noses in Washington, D.C. against Democratic Republic of the Congo. As the DRC struggles to free itself from the legacies of colonialism, brutal dictators, civil war and destructive poverty, international debt cancellation through the Heavily Indebted Poor Countries (HIPC) Initiative offers some relief. Throughout Africa, Latin America and Asia, debt cancellation has helped governments use precious resources for basic education, health clinics, clean water, and roads for citizens instead of paying debt service to wealthy countries. Yet in the DRC, Vulture Funds have swooped in to profit off of this internationally accepted debt cancellation agreement.  They are using US courts to sue the DRC for a decades-old loan taken out under Mobutu, the notorious dictator.  Now the Vulture Fund, FG Hemisphere, has gone so far as attempting to seize the DRC's embassy in Washington, DC.

Around the country and the world, citizens are mobilizing to stop these Vulture Funds from preying on the world's poorest. Recently, the UK became the first-ever government to establish a law protecting poor countries against Vulture Funds profiteering off of debt relief resources. In the US House of Representatives, the Stop VULTURE Funds Act (HR 2932) would limit the profits that a Vulture could make, reducing the incentive to sue. Please help Stop the Vulture Culture by sharing the video with your friends, sharing it on Facebook, and taking action today.