TIME magazine has sunk to new lows, soliciting a billionaire Republican donor, Paul Singer, to write its blurb for recently elected Argentine president Mauricio Macri’s entry in the 2016 edition of “100 Leaders.” It’s not ridiculous because he’s either a billionaire or a Republican though, it’s that for the better part of the last decade the man has funded a multi-million dollar campaign against the previous Argentine government. Oh, and he stands to make a pretty penny from the decisions of the new president too.
First, the backstory. In 2001, Argentina had the largest ever sovereign debt default in history, some $100 billion that the country, in the midst of a disastrous recession, simply could not continue to service. Over the following years, Argentina negotiated and reached a settlement with 93 percent of its bondholders. They agreed to take a significant haircut on their holdings and were given new bonds that were linked to the country’s economic growth. Since Argentina did quite well after its default (more on that here), the bondholders recouped their investment and a tidy profit as well.
But that wasn’t enough for everyone. A group of vulture funds, many of whom bought the distressed debt on the secondary market for cents on the dollar, took Argentina to court in New York demanding full repayment. The previous Argentine government refused to comply with court orders demanding billions be paid to these vulture funds, including Singer’s. The Argentine legislature also passed laws preventing the government from dealing with the vultures.
Singer and his allies set up a lobbying group, the American Task Force Argentina (ATFA). They brought on big Washington names like former Assistant Attorney General Robert Raben and Nancy Soderberg, a high ranking official under Bill Clinton. Since 2008, ATFA has spent more than $8 million on lobbyists, according to disclosure records. (This includes former Rep. Connie Mack, for whom Singer’s firm was a top campaign contributor. Mack was one of Argentina’s harshest critics in the U.S. House of Representatives and he quickly signed up to lobby for ATFA after losing his Senate run.)
ATFA took out full page ads in the Washington Post and other newspapers around the world denouncing former president Cristina Fernandez de Kirchner as corrupt and a supporter of terrorism. Lobbyists wrote op-eds trashing the country (without disclosing their financial interests). They even had an Argentine naval vessel seized in Ghana to try and secure repayment.
ATFA found a friend in New York Judge Griesa, who made an unprecedented ruling that Argentina could not pay the bondholders to whom it had been making regular payments, unless it also paid the vultures. This essentially locked the country out of the global credit markets, wreaking much economic havoc that contributed to the current downturn in Argentina.
In 2014, Singer brought on Madeline Albright, former Secretary of State, to try and negotiate with the Fernandez government. That relationship ended quickly however, as Fernandez denounced a five-point plan drafted by Albright to undermine and destabilize her government if she didn’t agree to terms with the vultures.
So yeah, there was a bit of bad blood between Singer and the previous government. Not surprising that he’s happy to see a new face in the Casa Rosada (Argentina’s version of the White House).
But here’s when TIME’s decision to let Singer write a couple of paragraphs on Macri gets even more absurd. Because when Macri was recently elected president of Argentina, he immediately went about settling the long-standing debt impasse with the vultures.
Just this week, Argentina returned to the international bond market, raising some $16 billion. Most of it will go to repay the vulture funds, including Singer’s. TIME included a short disclaimer at the end of Singer’s piece, saying that he “has been involved in debt negotiations with the Argentine government for several years.” Well, that’s putting it mildly, to say the least.
Singer’s hedge fund is about to get paid $2.28 billion from the new Argentine government. That’s almost four times the principal amount on the bonds. And even that understates the profit that Singer is making as a result of Macri’s election. Earlier court filings showed that Singer’s firm purchased Argentine bonds for just over 20 cents on the dollar.
TIME’s list should stand as a signal of important contributions to leadership; not as a thank you note from one man who did much to damage Argentina’s economy, to the one who filled his pockets with billions in profit.
It’s like having Macri’s public relations firm do his profile. That happens all the time, but at least they usually have to put someone else’s name on it.