July 30, 2009: TransAfrica Forum, along with our advocacy partners, Africa Action and the Jubilee USA network, has some exciting developments in the fight against Vulture Funds that we would like to share.  Last week, the British government announced it would consider passing legislation to stop Vulture Fund profiteering off the debt of impoverished nations.  We also have indication from U.S. congressional leaders that they are interested in moving forward with the Stop VULTURE Funds Act as early as September of this year if we can gain more Congressional support for the measure.  These are significant steps forward in our struggle to ensure that the positive gains of debt cancellation are not siphoned off by Vulture Funds!

Now is the time to build on this positive momentum to increase Congressional support for the Stop VULTURE Funds Act (HR 2932) in the House of Representatives.  Since Representative Maxine Waters (D-CA) and Spencer Bachus (R-AL) re-introduced the bill in June, 15 Representatives have signed on as co-sponsors.  We need many more co-sponsors to demonstrate the political will to move forward with this important piece of legislation.

Take Action! Meet with your representative during the August recess to urge him/her to cosponsor the Stop VULTURE Funds act. During the month of August, Congress is on recess and your representative will be in his/her home district, so this is a great time to set up a meeting to ask him/her to cosponsor the bill. Setting up a district meeting is fun and easy.  To set up a meeting:

1. Go to www.house.gov to find your representative and his/her district office phone number.

2. Call the office and ask to speak to the congressperson's scheduler to set up the meeting.

3. Download the legislative leave behind packet that we have prepared for you to take to the meeting.

Click here for more tips on preparing for a district meeting. If you are unable to set up a district meeting at this time, please call your representative and ask him/her to cosponsor the bill.  You can reach your Representative via the Capitol switchboard at 202-224-3121.  Click here for a call script.

What are Vulture Funds?

Vulture Funds are investors, generally specialized types of hedge funds or private investment funds, which acquire distressed sovereign debt of impoverished countries for pennies on the dollar, with the intent to demand sums that greatly exceed the amount of the original debt.

When a country receives debt cancellation from governments or international financial institutions, Vulture Funds rarely participate in the deal.  Instead they take the opportunity to sue in U.S. or European courts to seize the newly available resources - usually many times what they originally paid to purchase the debt.  After Zambia received debt cancellation, the Vulture Fund Donegal International seized $15 million that could have been used for AIDS treatment and rural healthcare.  Click here for more background resources on Vulture Funds and debt.

What does the Stop VULTURE Funds Act do?

The Stop VULTURE Funds Act would prevent Vulture Funds from using U.S. courts to collect more than 6% interest above the amount they paid to purchase the debt.  It also would require vulture funds to operate in a more transparent and fair manner by requiring the Vulture Fund to disclose certain information, such as the amount paid for the debt.

Please set up a meeting or call your US Representative today and ask her/him to co-sponsor the bill! 

Visit www.transafricaforum.org for more information and analysis.