Jubilee, Argentina, and the Supreme Court

Hi Everyone,

I need your help. Jubilee USA is a plaintiff in a case before the Supreme Court this month having to do with some old debts of Argentina going back for decades. And they want religious and mission and justice groups to sign-on as co-supporters of the brief.

Here is the issue. You know that way back in the 1970s dozens of poor and developing countries borrowed way more than they could afford. Many of them did it because they were run by dictators or authoritarian militaries who stole the money and then retired to the French Riviera (or similar places). Some of them, like Costa Rica, tried to use the money wisely, but in the early 1980s the economy went to hell and the interest on their loans went through the roof. So, whether they were moral or immoral, around sixty countries collapsed economically. That’s the origins of the great debt crisis that spawned the Jubilee movement. Ever since then, we have been trying to arrange deals to get them out from underneath those debts that were literally eating up the incomes of so many countries.

In many cases, we have been able to do a version of what happens to you and me when we get behind and go to a debt arrangement service. That is, they say “my client can pay you a certain amount on the dollar for the old debt, or you can continue trying to get more than they can afford and wind up getting nothing.” In most cases the creditor agrees and all parties are happy.

The case in point today is Argentina, whose debts were stacked up during authoritarian military dictatorships that borrowed and squandered billions of dollars back in the 70s and 80s. They were finally thrown out in the late 1980s, and the new democratically elected government was left to pick up the tab. (They had to pay for all of the weapons that their previous government had purchased to shoot them with, which left a bad taste in their mouths.) Argentina is a middle income country, so they managed for a while, but when the recession of 2000 came, they were hit hard and offered their creditors the cents-on-the-dollar arrangement I mentioned above. The creditors took the deal and it was signed and done and everyone was happy.

However, bizarrely, later on a couple of investment firms bought up those old dead loans which for some reason were for sale on the international market, and they took Argentina to court, suing them for back payments. And they won their cases against Argentina all the way up to the US Supreme Court today. If they win this one, it means that Argentina will have to pay off all of the old dictators’ bills plus interest, which is billions of dollars. The importance of this is that if a middle-income country can be sued for debts it thought it had already cleared from the books, then poor countries all over the world will be vulnerable to the same kinds of law suits. It’s hard to overstate the kind of devastation this could wreak upon the world. The magazine, The Economist has called this the “Trial of the Century” because of the good it can do if we win and the damage it can do if we lose.

So, all I am asking is that our little group agree to be to sign onto the “amicus brief” in support of Argentina in this case. It won’t mean a whole lot, but they say that if the Supreme Court sees dozens of organizations supporting a case it carries a little bit of weight in their decision. And every little bit helps.

So, let me know. This is a long note (but it’s a long subject), so once you read through all of this, send me a quick note back as soon as you can with your vote.

Incidentally, I’ve included a copy of the letter from our attorneys to the Supreme Court about the case; it isn’t much, but it’s interesting to see how they do these things.