Clipping the vultures’ wings
Campaigning to stop the companies who profit from poverty
Debt cancellation is crucial to ending poverty. It frees up vital funds to help poor countries improve essential services, like health and education. That’s why Oxfam and its supporters have campaigned long and hard to make it happen. And why, when we saw it threatened, we flew into action…
Oxfam uncovered an injustice
In 2006, Oxfam came across a commercial company trying to profit from ‘bad debt’ – by scavenging $55 million from Zambia, one of the poorest countries in the world.
And got to the bottom of the story
In 1999, ‘Vulture Fund’ Donegal International bought up $15 million of Zambia’s debt to Romania at a knock-down price of $3.3million (just one month before Zambia qualified for debt cancellation). Then, in February 2007, they attempted to sue Zambia for the full cost of the original debt, plus penalty payments, plus interest – a staggering $55 million.
Then we shouted about it
We broke the story with the BBC's Newsnight programme on the eve of the High Court judgement. We ran an exclusive with the Financial Times newspaper. And Oxfam supporters turned up outside the Court with a live vulture, just to drive the message home! Inside the courtroom, the judge said that although he was legally bound to award the core debt, it would be considerably less than Michael Sheehan, the man behind Donegal, was asking for. He described Sheehan as ‘deliberately evasive and even dishonest’.
And our supporters shouted too
Around 25,000 campaigning actions were taken to try to stop Donegal. Supporters sent emails to Mr Sheehan, asking him to give the money back; and called on Gordon Brown, then UK Chancellor, to push for legislation to stop vulture funds.
Then the British government responded
The UK Treasury issued a statement condemning vulture funds, calling Sheehan’s action ‘socially irresponsible’.
And very soon, it made headlines in America
Donegal is registered in the British Virgin Islands, but Mr. Sheehan is an American citizen. The US media were on to the story fast. Our colleagues and supporters from Oxfam America also took action.
Then it was raised with President Bush
After seeing the story, US Congressman John Conyers, chair of the Judiciary Committee, raised it directly with President Bush.
Who said he’d do something about it!
So, now we want President Bush to put the brakes on Sheehan, and to send a strong message to all other Vulture Funds that they must stop trying to profit from poverty.
And maybe soon this kind of thing will stop
A judge reluctantly awarded Sheehan £15.5 million in March 2007 – much less than he was after, but £15.5 million is still too much. Donegal is not the only vulture fund. Poor countries could still be prey to other companies profiting from poverty in the future. We will be watching them with an eagle-eye. And now, thanks to our supporters, so will the US and UK governments.
Jargon buster
'Vulture fund' is the name given to a commercial company that seeks to profit from buying up 'bad debt' at a cheap price and suing for the full amount through the courts.
