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Vultures feed when economies are turned into rotting carcasses

S ource: UK Guardian

If God doesn’t give a rat’s arse about “The Vulture”, and what he does for a living, and what he’s done to Africa, why should I?

The thought struck me while sitting here, coffee getting cold, in my old Toyota, trying to look invisible, staked out in front of 300 De Kalb Avenue, in Brooklyn, New York. It’s just after dawn and I’m hoping that Peter Grossman, a Wall Street star, will pop out of his posh brownstone for a jog or a cup of coffee. Then I can jump him. He’s on the lookout for me because I’d already jumped his acquaintance, Goldfinger, the man who’s making Grossman stunningly rich.

Grossman’s riches, nearly $100m for his firm, FG Management, come from theDemocratic Republic of the Congo. I was just there in Congo, two days before this stakeout, at a cholera quarantine centre in the capital, Kinshasa.

Besides lots of cholera, Congo has lots of cobalt. Grossman has, through a crazy legal loophole in British law, waylaid a payment of $80m to the African government for a shipment of cobalt from a government-owned mine.

Grossman is a “vulture”, the name Wall Street gives, with an affectionate smile, to those who can get their hands on old, forgotten debts of desperately poor nations – Congo, Zambia, Peru and Liberia are cases I’ve investigated – that they pick up for pennies on the pound of face value.

When – usually after a Bono concert – western nations forgive debts owed by these poor countries, the nation receiving this aid is now ripe enough, and flush enough, for attack by a vulture, who demands many a pound of flesh for the debt he suddenly brandishes.

In Grossman’s case, his company paid about $3m for a debt Zaire (now Congo) owed Yugoslavia (now Bosnia). A court on the tiny island of Jersey, a tax haven in the Channel, has ordered Congo to turn over the $80m it has in a bank account there, the payment for the cobalt. Furthermore, Congo must pay an additional $20m to Grossman if the country can find the money.

If that seems nuts to you, it is. The UK and other nations bar collections by vultures against poor countries where western government treasuries have agreed to give up their own claims. However, Grossman was free to sue Congo in Jersey, a pseudo-colony of Britain, because the UK parliament failed to include the words, “and Jersey” in its anti-vulture law.

How did Grossman got his hands on Congo’s debt to Bosnia? That’s what I was waiting in the Brooklyn cold to ask him.

Here’s what I can piece together. Only three days before I was in the Congo cholera clinic, I was in the office of the chief of financial police in Sarajevo, Bosnia. With the help of the Centre for Investigative Reporting in Bosnia, we tracked down the police report asserting that the nation’s own prime minister had slipped control of the debt to one Michael Sheehan, aka Goldfinger who, for a fee, passed it from the Bosnia state power company to Grossman. The Bosnian police chief told me this little business with the Congo debt was a crime, and the (now former) prime minister, Nedzad Brankovic, should be in prison. Yet, to date, prosecutors have not acted.

I got to the man who blew the whistle on Brankovic, Brigadier General Izet Spahic. He’d worked out a deal for the Bosnia power company (desperately broke) to make power pylons for Congo (desperately broke). The project would generate electricity, clean water and profits for both nations.

It was quite a heart-warming story of two nations coming out of civil wars, with a combined total of 4 million dead, helping each other. But when it was discovered that The Vulture in Brooklyn had control of the debt between the nations, the electricity deal was off.

I went by the Bosnia pylon-making factory. It was now shut and its several thousand workers were gone. At least there’s no cholera.

The brigadier general was furious: how could these people think about making a profit off civil war, poverty and unimaginable suffering? When do humans grow feathers and claws?

It’s a question I’m going to ask Grossman when he comes out because the Guardian and BBC Newsnight want me to ask it. For me, The Vulture’s answer is inconsequential to the bigger picture.

I assume that after we break our story, parliament will move to close the loophole it so glaringly left open to The Vulture; and the US Congress will at least pretend to consider anti-vulture legislation, now languishing in some committee.

But I think the focus on Grossman and his fellow carrion chewers is distracting. The destruction of Bosnia’s power-pylon industry was the direct consequence of privatising it, bringing the free market to socialist Yugoslavia and Brankovic to power over its debts, allowing him to buy and sell debt securities on the deregulated world financial market.

It was the privatisation of Congo’s state cobalt mine and the looting of its riches, all at the behest of the World Bank, IMF and privateers, that drained Congo’s treasury.

Grossman is just the repo man, the last of the financial carnivores who’ve bitten into Congo and Bosnia – and Greece and Detroit.

Grossman’s vulture operation is just over the bridge from Occupied Wall Street, which was occupied at the bottom by protesters, “the 99%”, and is occupied at the top by “the 1%”, those who kill economies for a profit.

It’s easy to target Grossman. But vultures can only feast when the system kills, when, for easy profits, economies are turned into rotting carcasses.

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