Say what you will about President Cristina Fernández de Kirchner, but she has held her ground against some powerful enemies. Media giant Grupo Clarín, mayor of Buenos Aires Mauricio Macri, and—as documented in The Bubble—Paul Singer.
Singer is the leader behind Elliot Investment Management, a hedge fund worth over $21 billion. When Argentina’s economy imploded in 2001, Singer’s vulture funds swooped in to buy government debt at a discount, then immediately demanded full payment, instigating what would later be dubbed the debt trial of the century.
For over a decade Singer has pursued Argentina in courts across the United States and hunted its assets across the globe. Last year he succeeded in temporarily capturing an Argentine frigate in Ghana. He has also orchestrated an aggressive negative public relations campaign, publishing this full-page newspaper ad, which accuses Cristina of creating a sanctuary for drug-traffickers.
You might recognize the name American Task Force Argentina at the bottom of the ad, not to be confused with Team America. ATFA, which is also supported by Argentina’s US-based cattle competitors, is the mouthpiece for Singer’s mud-slinging. The group spends millions on anti-Argentinian lobbying efforts and has accused the Argentinian government of making a deal with the devil, amongst other things.
Most of Singer’s fortune has been made through his knack for profiting from crises. In 2007, only days after Pakistani President Pervez Musharraf announced a state of emergency, suspended the constitution, and dissolved the Supreme Court, Singer sent one of his researchers into the country for “investment opportunities.” He has gone after countries like Peru and the Democratic Republic of Congo and won multi-million dollar court judgments. Greece was so scared of Singer that after its economy crashed it restructured its national debt to protect itself from vulture funds.
Singer does not only target countries under financial duress. He has also profited from the bankruptcies of United States car manufacturer Chrysler and the financial institution Lehman Brothers. He stated in one of his remarkably rare interviews, “Our primary goal is to find bankruptcy situations where our ability to control or influence the process is the driver of value…. That’s our favorite.”
As one of the most influential backers of the Republican Party, Singer has donated millions to GOP think tanks and candidates alike, all in passionate defense of the one percent. His political reputation in hedge-fund circles is “to the right of Attila the Hun,” which may be a common jest amongst the wall-street crowd, but— in light of his hell-bent financial imperialism—is less satirical than spot on.
Fortunately for those of us who don’t agree with Attila’s world view, some policymakers are coming around to the argument that Singer’s rapacious financial strategy may be harmful to the world economy. The Obama administration, the IMF’s managing director, and most recently the government of France have all weighed in against Singer the vulture funds, although France is the only Argentine backer with the brass to file against them in the Supreme Court.
The United States’ highest court may set the final stage. Argentina stands to lose up to $1.3 billion if Singer has his way. The stakes are high, and the vultures are circling.
(Paul Singer photo via Wikipedia)