Ted Olsen, former George W. Bush solicitor general, testified yesterday for Republican heavy-hitter Paul Singer at a House financial services committee hearing on “the need to protect investors from the government.” Yet neither Singer, nor his firm’s name Elliott Management, was ever mentioned.
Olsen was billed as a representative for the American Task Force Argentina, a lobbying group that is mainly financed by Singer. His firm has been battling Argentina in the courts for years to get the country to pay its debt to him.
At the hearing, Olsen said he represented NML Capital, which he defined as “a family of funds that manages capital for dozens of US-based organizations, including colleges, universities, hospitals and pension funds.”
In fact, NML is part of Elliott, a $20 billion hedge fund that is known as a “holdout creditor” for taking busted countries to court in order to profit handsomely on debt it purchases for pennies on the dollar.
Rep. Jim Himes (D-Conn.) referred to these investors as “swashbuckling investors who knew what they were getting into.”
At issue is a friend-of-the court brief the US filed on Argentina’s behalf in a case coming before the US Court of Appeals for the Second Circuit on June 20. Olsen will argue for Elliott.
“I am troubled by our government’s eagerness to side with lawless nations against the interests of Americans,” Olsen said, referring to the brief. He acknowledged that the Bush administration had also done so.
Argentina has ignored more than 100 court judgments to make it pay up, but law professors said that Elliott’s latest legal tactic sets a bad precedent.
“The US government has quite legitimate reasons to file the amicus (friend-of-the-court) brief, namely protecting global financial stability and the US’s ability to benefit from sovereign immunity abroad,” said Adam Levitin, professor of law at Georgetown University Law Center, who also testified.
He added that Elliott’s legal reading of a technical issue that the appeal rests on is “absolutely bizarre, but I hardly think a Congressional hearing is the place to get into the interpretation of the language.”
The Argentina legal drama was one of three cases the committee explored. The other two were the $25 billion mortgage settlement that neither Democrats nor Republicans like and the highly politicized and divisive Chrysler bankruptcy.
Adding Elliott’s Argentina battle to the list was “very creative and somewhat audacious,” said Anna Gelpern, professor of law at American University Washington College of Law.
American Task Force Argentina, Ted Olsen, Paul Singer, Elliott Management, House financial services committee hearing, George W. Bush, Argentina, Georgetown University Law Center, investors, NML Capital, Elliott