Fact Check: Argentina

958 days, 18 hours, 29 minutes ago


Receive email alerts

ATFA Announces New Advertising Campaign: Who are the people Argentina’s Leaders Call “Vultures?”

Today, ATFA unveils a new advertising campaign defending the more than 61,000 bondholders that have never been paid one penny by Argentina.

Argentina falsely claims in advertisements and speeches that it pays its bills, but these bondholders have been paid nothing and are still waiting for Argentina to engage in a good faith negotiations.

Here’s the television ad, which will be running on national news networks in the United States:

The television advertisement is also available in Spanish at this link.

And here’s a link to the print advertisement that will be running in both the United States and Argentina.

Recently, the Wall Street Journal chronicled the plight of Argentina’s bondholders.

It’s not too late for Argentina to come to an agreement with bondholders.

Riposte to Blackman

In open court last Friday afternoon, Argentina’s lead lawyer Jonathan Blackman called out our organization for last week’s coverage of Blackman and his firm Cleary Gottlieb on this website.  The New York Times specifically included Blackman’s overwrought rant about ATFA in its story on Friday’s hearing.

In summary, Blackman maintains that ATFA falsely accused him of advising Argentina on a default (although there can be no debate about whether he did – see below), and stated that ATFA’s blog posts were “evil and malicious” in their depiction of both Cleary and Blackman.

We’re perplexed as to why Blackman would think he is above criticism or a thoughtful examination of him and his firm’s contribution to the Argentine debt mess, which was the sole purpose of the four blog posts.  Here they are again, all in one place, for your reference:

Cleary’s Default

The Cleary Playbook

Should the Court Sanction Cleary

Did Cleary Draft Today’s Advertisements

Now, back to Friday and Blackman’s attack on ATFA in court – let’s review some key facts:

1)   Based on its own leaked memorandum, Cleary did advise Argentina to default.  Blackman challenged this in court – saying that ATFA claimed he personally advised the president of Argentina to default.  This is merely sly word gymnastics from a slick litigator. Blackman did author a memo  for the Government of Argentina advising default as its “best option.” Maybe Blackman didn’t personally tell the President (we doubt any counsel advises the Republic’s president directly) but Blackman unquestionably advised Argentina to default. Again, here’s the relevant excerpt:

“… We believe that, if the Supreme Court does not decide to review the lower court ruling, the best option for the Republic is to allow the Supreme Court to force a default and then immediately restructure all its external bonds in such a way that the payment mechanism and other related aspects remain outside the reach of the US courts…”

Blackman – who signed the memo along with two colleagues at Cleary – cannot deny its authenticity: In the course of arguing in court that it should be considered a privileged attorney-client communication, they admitted that it is Cleary’s work product. Therefore, we fully stand by last Monday’s post “Cleary’s Default.”

2)   Regarding last Tuesday’s Post “The Cleary Playbook” – There are striking similarities in Cleary’s representation of Argentina and its representation of the Republic of Congo.  In both cases, Cleary advised against a settlement with creditors by invoking baseless fears over future claims by other creditors, and in both cases, Cleary campaigned for the removal of key judicial figures who got in its way – Judge Preska in the Congo case and Special Master Dan Pollack in the Argentina case.

3)   Blackman didn’t like Wednesday’s post “Should the Court Sanction Cleary,” but we think this is a fair question.  In advising its client to default, was Cleary helping or encouraging Argentina to evade the injunction?  If so, this would certainly be grounds for sanction.  We pointed out that it wouldn’t be the first time Cleary was sanctioned, either.  In the Congo case, Judge Preska (yes, the same judge Cleary tried to have removed from the case), sanctioned Cleary for witness intimidation. In our post, we noted that an email from a Cleary attorney urging a witness not to testify suggested that the witness discuss the matter further with – you guessed it – Jonathan Blackman. We understand why Blackman doesn’t like it when people point out these facts, but he can’t deny them.

4)   Undoubtedly for us, the richest part of Blackman’s speech on Friday was when he called ATFA’s conduct “far more damaging to the court and our profession than anything that has been discussed.”  This is rich coming from a litigator who stood in front of a Circuit Court judge and told her that his client would simply refuse to comply with her order.  Here’s the video, in case you haven’t seen it yet.

And that’s not all.  Blackman recently co-authored a brief in the U.S. Supreme Court that used the word “vulture” no fewer than 15 times when referring to more than 61,000 bondholders that have never been paid a penny by Argentina.  These individuals are trying to enforce their contracts under New York law, but to Blackman and Cleary Gottlieb, they are “vultures.”  (The Republic, for its part, depicts Judge Griesa –literally using posters and placards – as a vulture, derides the U.S. justice system, and calls the judge and the Special Master “incompetent”). And, according to Blackman, ATFA’s blog posts last week are the most damaging thing to the legal profession?

At ATFA, we’re about defending the rule of law and the right of the 61,000 bondholders that Argentina has never paid to legally enforce their contracts without being called “vultures.”  These individuals are real people, and we think it’s a far greater threat to the legal profession when lawyers adopt their client’s malevolent tactics of calling their adversaries demeaning names. In any case, the legal profession is far better off when lawyers are held accountable for their statements and conduct. And maybe only through a careful examination of their statements and conduct will we see more appropriate decorum from our officers of the court.

Axel Leads Argentina to Defeat at The Hague

Breaking just this evening: In response to Argentina’s announcement that it was filing suit against the United States at the International Court of Justice (ICJ) in The Hague, Netherlands, the Obama Administration has just announced that it has no intention of granting its consent to this suit.

“We do not view the ICJ as an appropriate venue for addressing Argentina’s debt issues, and we continue to urge Argentina to engage with its creditors to resolve remaining issues with bondholders,” a State Department spokeswoman said Friday.

Wow. By betting the ranch on a hopelessly futile legal gambit at the ICJ, Economy Minister Axel Kicillof has miscalculated (again!) and now Argentina finds itself in the same place it was two days ago: facing downgrades, decreased investment and isolation because of Kicillof’s decision and Cleary’s advice to default.

What’s most striking about Kicillof’s latest blunder is that he needed the support of the United States to file this suit at The Hague, and yet he engaged in taunts and rants against the Obama Administration, calling our government “a joke.” As a non-signatory to the ICJ, the United States would have needed to specifically grant permission for the Court to take up the case.

Axel, some free advice from all of us here at ATFA: don’t taunt the United States government the day before you ask for their help with a lawsuit against U.S. citizens.

In a wild speech yesterday, Kicillof suggested to President Obama that Judge Griesa should be “reined in.” Perhaps it’s time for President Kirchner to “rein in Axel”, and work with the bondholders to pull Argentina away from default.

More bad news from the rating agencies: Moody’s revises outlook of Argentine provinces and municipalities from “stable” to “negative”

Argentina’s decision to default is starting to catch up with the country. S&P declared the country to be in default last week. Yesterday Fitch downgraded Argentina’s financial institutions. Now Moody’s has followed promptly with a press release announcing it was downgrading the outlook for Argentina’s provinces and municipalities.

Moody’s gave the following rationale for the decision: “Argentina´s default could increase pressure on the country´s operating environment through its official foreign exchange reserves amid continued economic stagnation. Argentina is mired in stagflation with a GDP that declined 0.2% year-over-year during the first quarter and high inflation of over 30%, driven in good part by continued currency depreciation. The default is likely to exacerbate the economic contraction, increase pressure on the exchange rate, and push inflation even higher.”

This latest ratings downgrade will only make borrowing conditions more difficult and more expensive for the country. Countless articles have been published discussing Argentina’s struggling economy and the picture only looks to be getting bleaker. Instead of focusing on resolving its debt crisis, Argentina is now attempting to take its issues with its creditors to The Hague.

The Economist just published an article today discussing how the government is to blame for Argentina’s struggling economy.

In 11 years in power the Kirchners have preferred nationalism and confrontation to pragmatism and professional competence, while focusing relentlessly on the short termEven before the default, the economy was set to contract by about 1.5% this year. Businesses are laying off workers, or cancelling overtime. The current account and the public finances are both in deficit. Inflation is at 39%, according to Elypsis, a consultancy. On the black market a dollar costs nearly 50% more than it does at the official exchange rate.”

The Economist concludes that “the uncertainty Ms. Fernandez has unleashed will curb investmenta better–advised and more pragmatic president would find it fairly easy to the put the economy back on track and win foreign investment…next year’s election is likely to produce this outcome.”

Let’s hope the Argentine people don’t have to wait until the end of 2015 for the government to put the country on the right track.

Argentina’s choice to default leads to downgrade of its banks

The effects of Argentina’s default are starting to become apparent. Just today, Fitch Ratings issued a press release stating it was downgrading Argentina’s financial institutions as a direct result of the country’s “recent sovereign restrictive default.”

Fitch stated that “These financial institutions have maintained sound financial profiles, but the potential of increased sovereign risk cannot be underestimated.”

The downgrade included some of Argentina’s biggest banks: Banco Macro, Banco Santander Rio, BBVA and Banco Frances, among others. This downgrade is likely to make it even more expensive for Argentines to borrow money.

Why should Argentina’s independent financial institutions, who, according to Fitch, are healthy (despite the macroeconomic mess the Argentine government has caused) be punished because Argentina refuses to negotiate with its creditors?

The press release continued, “In Fitch’s view, regardless of their overall reasonable financial condition, these bank’s ratings are currently capped by the LC [local currency] sovereign rating, due to the weak and worsening operating environment, and the challenges posed by the sovereign’s delicate position with foreign creditors…Fitch considers that downside risk for these ratings is heavily associated with the potential contagion effect of the recent sovereign default on the country’s already weak economic outlook.”

One would think the Argentine government might be prompted to take the default more seriously after this downgrade some of the country’s largest financial institutions, but recall that Economic Minister Axel Kicillof had this to say recently after S&P declared the country to be in default: “Who Believes in the Ratings Agencies?”  Just another example of Argentina’s stubborn refusal to acknowledge that its policy mistakes are hurting its businesses and the economy.


Page 18 of 23« First...10...1617181920...Last »