Advocates for the poor charge that a top fund-raiser for Rudy Giuliani is a “vulture” whose firm preys on the debt woes of impoverished Third World countries.
Billionaire hedge fund manager Paul Singer – founder of the $7 billion investment fund Elliott Associates – serves as Giuliani’s Northeast finance chairman. He has helped raise millions of dollars for Giuliani through his business contacts and interests, and has allowed the candidate to rent planes through his leasing entity, Elliott Asset Management.
At a recent fund-raiser at the Sheraton New York, Giuliani praised Singer as working “tirelessly” for the campaign.
But debt-relief advocates claim that Singer’s firm acts like a scavenger by buying debt cheaply from cash-starved countries – and then suing them for the full repayment or even more than the original value.
“Vulture funds were first introduced by the billionaire Paul Singer, who in 1996 paid $11 million for discounted Peruvian debt and then threatened to bankrupt the country unless they paid him $58 million in order to keep good standing in international financial markets,” said the group TransAfrica Forum.
Peru paid.
In a more recent case, a Singer affiliate – Kensington International, based in the Cayman Islands – initially bought $100 million of old debt that the Republic of the Congo defaulted on for $39 million. His firm then sued under racketeering laws and seeks repayment of $375 million.
“We don’t think that it’s ethical for vulture funds like Singer’s to make profits off the poorest people in the world,” said Neil Watkins, national coordinator of Jubilee USA Network.
But Singer defended his actions, saying developing countries have to honor “international obligations.”
“Debt-relief advocates should recognize that the beneficiaries of debt relief are often corrupt or incompetent regimes that squander their nation’s assets and then cry poverty to avoid legitimate debts,” Singer told The Post, in response to written questions. “This cycle must be broken for countries to achieve economic development.”
Some financial experts – even anti-poverty advocates – agreed.
Court records revealed that Congo leaders used oil revenues to spend hundreds of thousands of dollars on lavish designer shopping sprees, a scandal blasted by the humanitarian group Global Witness.