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On Government Funding of Think Tanks Print
Written by Dan Beeton   
Wednesday, 10 September 2014 15:44

The New York Times ran an investigative article over the weekend examining foreign government funding of U.S. think tanks. The article found that

More than a dozen prominent Washington research groups have received tens of millions of dollars from foreign governments in recent years while pushing United States government officials to adopt policies that often reflect the donors’ priorities, an investigation by The New York Times has found.

The money is increasingly transforming the once-staid think-tank world into a muscular arm of foreign governments’ lobbying in Washington. And it has set off troubling questions about intellectual freedom: Some scholars say they have been pressured to reach conclusions friendly to the government financing the research.

The article was a good example of investigative journalism. However, it did miss one point that is perhaps most important for majority of U.S. citizens and residents, who are generally opposed to much of our government’s foreign policy, especially e.g., wars of choice. This is that the foreign governments funding the think tanks in question are all allies of the United States, and often share U.S. foreign policy goals. In that sense they may reinforce the U.S. government’s influence over media and ideas.  This paid influence in “the marketplace of ideas” help perpetuate the process by which the media that reaches most Americans does not recognize an independent civil society on foreign policy issues. Practically all of the experts that Americans see on major TV on foreign policy issues are either government officials, former government officials, or are getting money from the government – or from its foreign allies.  

Writing about the investigation, the Non-Profit Quarterly noted that sometimes think tanks are not overly transparent regarding their foreign funding:

There are several very disturbing elements to this story that should be a concern for all nonprofits.

First, because these think tanks are 501(c) organizations, the public disclosure of their funding relationships with foreign governments may be difficult to spot in formal documents such as Form 990s. For example, on the CSIS website, there is a list of foreign governments that have provided funding to the organization, but without funding amounts, dates, or the specific projects or initiatives they may have supported. There is nothing in the latest CSIS Form 990 posted on the GuideStar website identifying or describing any foreign government funding of the organization. One would think that funding from other sovereign nations might be something that should be a matter of public disclosure.

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Window Dressing for the Vulture Funds Print
Written by Peter Hayakawa   
Thursday, 14 August 2014 09:48

The American Task Force Argentina (ATFA) is Elliott Management’s main public relations and lobbying arm supporting its long-running legal fight against Argentina in U.S. courts to collect on debt purchased in the aftermath of the country’s 2001 default. Although it markets itself as a coalition, ATFA has in the past had to remove several groups from its list of supporters after the Wall Street Journal found that they had never heard of the organization, much less supported it. Over the years, ATFA has gone to creative lengths both to lobby the hedge funds’ case and to generally defame Argentina, by alleging nefarious ties with Iran, for example.

One of ATFA’s main goals has been to divert attention away from the fact that the fight over Argentina’s debt fundamentally hinges on the heavy-handed tactics of large hedge fund owners, like Elliott’s Paul Singer, to collect a lot of money on distressed sovereign debt. These tactics are not pretty, and these hedge funds rightly earned the name “vulture funds” long before the Argentina case, as CEPR Co-Director Dean Baker has pointed out. So one of ATFA’s strategies has been to highlight how Argentina’s actions have supposedly hurt the “little guys” and how the vulture funds’ case somehow represents a fight for these underdogs.

ATFA has not been great at coalition building, however. To date, perhaps their most successful lobbying push was their attempt to portray Argentina as cheating retired educators. Before 2010’s bond restructuring, one of the holdout creditors was TIAA-CREF, which had a relatively small stake in the defaulted bonds. Jumping on this fact, ATFA alleged that Argentina seriously harmed the pensions of retired academics, hosting an event [PDF] on the default’s effect on teachers, coordinating [PDF] letters [PDF] to members of Congress, and launching an ad campaign  [PDF]. ATFA’s ad lists the members of the “American Task Force Argentina Educator Coalition” who support the vulture fund’s case: the Alabama, Georgia, and Colorado conferences of the American Association of University Professors (AAUP), the Nebraska Community College Association, and lastly, the Nebraska Retired Teacher Association. That’s it. There was no participation from the national AAUP or TIAA-CREF in this campaign; in the case of the Georgia conference of the AAUP, it’s unclear if the collaboration with ATFA involved the participation of anyone but the group’s then-executive secretary. When Congressman Eric Massa later pushed ATFA-backed legislation to punish Argentina over the debt issue, ATFA’s efforts may have helped the bill to garner some extra co-sponsors. But Massa’s ATFA legislation died, just like all of its later versions.

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Do the Holdout Hedge Funds Hold Argentine Credit Default Swaps? Print
Written by Peter Hayakawa   
Wednesday, 13 August 2014 13:34

The International Swaps and Derivatives Association (ISDA), the body that governs credit derivatives, recently declared a “failure to pay” credit event that triggers payment of credit default swaps (CDS) on Argentina’s debt. Bloomberg and others have raised the question of whether Paul Singer’s Elliott Associates or other hedge funds involved in the case against Argentina hold any of these CDS—and may be forcing a default and profiting from their CDS positions.

Elliott’s lawyers have denied that the firm owns CDS on Argentina’s debt, and a December, 2012 Reuters report cites an anonymous source saying the firm did have some, but no longer does. When asked by Judge Rosemary Pooler in a February 27th hearing in the Second Circuit Court of Appeals if Elliott’s NML owned any of the CDS, Elliott’s lawyer, Ted Olson, gave an evasive answer:

“I don’t know that that’s true,” Olson said. “I’m informed it isn’t true. But if it was true, it would be utterly irrelevant.”

Bloomberg pointed out that it was unclear if the denial applied to just NML Capital the Elliott subsidiary represented in the case, or to all of Paul Singer’s firms.

ISDA Decision

On June 20th, the law firm Schulte Roth & Zaber (SRZ) sent a memo on behalf of an anonymous holder of Argentine CDS to the ISDA Credit Derivatives Determination Committee (DC) asking them to decide whether Argentina had defaulted on its debt, and also arguing that Argentina’s public statements were tantamount to a repudiation of its restructured bond payments, urging them to rule that Argentina had triggered a “repudiation/moratorium” credit event.

SRZ wrote that their client’s CDS were set to expire on the 20th of June, and that if the ISDA DC ruled that “repudiation/moratorium” had occurred, this would extend the life of the CDS.

The ISDA DC did rule that Argentina had defaulted through a “failure to pay” credit event, which is different than a “repudiation/moratorium” credit event in that it apparently doesn’t extend the life of expired CDS, though it does trigger payment of non-expired CDS. ISDA DC later confirmed that Argentina’s public statements did not constitute a “repudiation” credit event. The ‘no’ vote was unanimous among the DC’s 15 members, including Elliott Management, which is a non-dealer voting member.

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Cold Warrior Criticizes Cold War and Drug War, Hires Cold Warrior to Promote Drug War Print
Written by Jake Johnston and Peter Hayakawa   
Tuesday, 12 August 2014 14:03

After penning an op-ed which blames the U.S. backed cold war and drug war for leading to the recent surge in migration from Central America, the Guatemalan President has hired a cold warrior to lobby the U.S. for increasing drug war cooperation. Confused yet? Okay, let’s start over.

Last week, Guatemalan President Otto Perez Molina wrote an op-ed in the Guardian arguing that the U.S. shared responsibility for a legacy that has spurred the current migration crisis involving the surge of unaccompanied Central American children arriving at U.S. borders:

…the so-called cold war had one of its hot spots in Guatemala…Communist and anti-communist ideologies created in Guatemala one of the bloodiest conflicts in Latin America, with weapons and money mostly from countries outside the region. More damaging was that for decades governments diverted resources from social and economic programs to security and defense.

Nonetheless, after the curse of the cold war, we faced another war: the war on drugs. Again based on ideological motivations, this new war diverted scarce funding from policies to foster education, health and employment to programs to block the flow of drugs from producer countries in South America to the consumer countries in the north. The failure of the war on drugs is widely recognized today, both for its limited capacity to stop drug flow, and its terrible consequences, expanding violence, corrupting institutions and weakening the rule of law.

While Perez Molina makes some fine points in his op-ed, he also completely leaves out his own role in the exact policies he’s criticizing. During the Cold War, Molina was a Guatemalan military officer involved in a “scorched earth” campaign that resulted in hundreds of thousands of deaths and he has even been personally linked to serious human rights violations from this time period. Pot, meet kettle.

The situation took a turn for the ironic this week when O’Dwyers reported that Guatemala had hired notorious and far-right cold-warrior Otto Reich to lobby on the government’s behalf in Washington. Reich, who’s also been pretty much at the center of every lousy U.S. policy in the region since the Cold War, will be paid over $100,000 to, among other things:

Design a strategy to move forward on the change of narrative from Guatemala to Washington, D.C., allowing representatives in the North American political parties that are willing to abandon the reference to Guatemala of the 1970’s and 1980’s, as well as the last century, and are eager to talk about the present and future of Guatemala of the 21st century.

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Wall Street Journal Uses Bogus Numbers to Smear Argentine President Print
Written by Jake Johnston and Mark Weisbrot   
Wednesday, 06 August 2014 10:51

Last week the Wall Street Journal had a front page article on the net worth of Argentina’s first family since 2003, the year Néstor Kirchner was elected president. Based on financial disclosures with Argentina’s Anti-Corruption Office, the Wall Street Journal reported that, “the couple's net worth rose from $2.5 million to $17.7 million” between 2003 and 2010. Implying that such returns must involve some sort of corruption, the Journal writes, a “lot of people in Argentina want to know where that money came from.”

But there is a serious problem with the way the data are presented here. The Journal is reporting the Kirchners’ net worth in dollars, without adjusting for local inflation. This makes the increase look much bigger than it is, since Argentina had cumulative inflation of nearly 200 percent during these years, according to private estimates.

WSJ Kirchner wealth

If the Wall Street Journal had taken inflation into account then the Kirchner’s net worth would have looked quite different. From $2.5 million in 2003, the Kirchners’ real net worth increased to around $6.1 million in 2010.

Simply adjusting for inflation takes away more than three-quarters of the Kirchners’ gain. Should the Journal have known this and adjusted for inflation? The question answers itself. We won’t speculate about anyone’s motives.

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The World Cup Has Come and Gone and Brazil Didn’t Crash and Burn Print
Written by Brian Mier (Guest post)   
Friday, 01 August 2014 11:25

Election season officially kicked off in Brazil on July 1st. For the past 7 months, amid wide-scale attacks on her competency -- and against the Brazilian economy -- coming from all sides of the political spectrum in the Anglophone media, President Dilma Rousseff’s poll numbers have remained stable, placing her far ahead of her closest competitor, Senator Aécio Neves of Fernando Henrique Cardoso’s PSDB party.  IBOPE, Brazil’s most widely-respected polling agency, released numbers last week showing that 38 percent of the Brazilian public intends to vote for Dilma. According to IBOPE this is the same percentage who intended to vote for her in the last poll that was taken immediately before the World Cup, and roughly the same percentage that have supported her all year.  Brazil has a multi-party system and she is currently far enough ahead of the remaining candidates that if the election were held tomorrow, she would win in the first round.

According to another recent poll by Datafolha [PDF], Dilma is leading in every region in Brazil. The numbers are close in the wealthy Southeast and South, but her lead climbs in the poorer North and Northeast. In the Northeast, Brazil’s poorest and second most populous region, the percentage of people saying they will vote for her climbs to 55 percent.

João Pedro Stedile, one of the national leaders of the Landless Peasants’ Movement (MST), breaks down the choices that voters have this October in the following manner: “Dilma Rousseff and (third-most-popular candidate) Eduardo Campos represent neo-developmentalism, and Aécio Neves represents neoliberalism.” Neo-developmentalism is a term that people on the Brazilian left use to describe the PT’s modern version of developmentalism. Developmentalism is a Keynesian-influenced economic strategy first developed in the 1940s in the Third World by economists like Raúl Prebisch and Celso Furtado  based on income redistribution through social welfare initiatives, government stimulus for national industrial production and consumption, maintaining key sectors of the economy under control of state companies, and a high minimum wage, that was employed at varying levels by Brazilian president João (Jango) Goulart before the U.S.-supported military coup of 1964. Many people on the Brazilian left apply the “neo” prefix to the 12 years of PT government due to the neoliberal policies initiated in the Fernando Henrique Cardoso administration, such as an independent and monetarist Central Bank , that the PT has done little to revert and that blend with traditional developmentalist policies such as large minimum wage hikes, high social spending on welfare programs, maintaining state control over the petroleum industry and mortgage market and subsidizing  the construction and manufacturing industries.

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Update on Latin American Responses to Israel's Siege on Gaza Print
Written by Stephan Lefebvre   
Thursday, 31 July 2014 11:20

[Below is an update to the blog post from July 21 reviewing how Latin America's political leaders responded to Israel's siege on Gaza.]

In a coordinated move on Tuesday (July 29), several Latin American countries recalled their ambassadors to Israel, including El Salvador, Chile, and Peru, the latter two of which made a point to say they had consulted with each other before announcing their decision. This means that five countries so far have recalled their ambassadors over Israel’s attack on Gaza which began July 8th, since Brazil and Ecuador had done so earlier. According to reports from Haaretz, Israel’s Foreign Ministry responded by saying that El Salvador, Peru and Chile were encouraging Hamas by recalling their ambassadors. 

El Salvador announced its decision to recall its ambassador over “the serious escalation in violence and the realization of indiscriminate bombing from Israel into the Gaza Strip,” which they say has resulted in many deaths, injuries, an exodus of Palestinians fleeing their homes, and serious material damage. Chile recalled its ambassador the same day (July 29), saying that Israel’s military operations “comprise a collective punishment against the civilian population of Palestine in Gaza.” The same statement from Chile condemns rocket launches by Hamas against civilians in Israel, but argues that Israeli operations in Gaza “violate the principle of proportionality in the use of force, an indispensable requirement for the justification of legitimate defense.” The government of Peru recalled its ambassador and said that Israel’s military operations in Gaza “constitute a new and reiterated violation of the basic norms of international humanitarian law.”

In addition, several countries put out new statements reacting to the conflict.

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Obama Throws Another Bone to the Right on Venezuela Print
Written by Mark Weisbrot   
Wednesday, 30 July 2014 14:39

On Monday, I wrote this article looking at the splits within the Obama administration on policy toward Venezuela and how they were manifested in the case of Venezuela’s former military intelligence chief Hugo Carvajal.  Carvajal was arrested last Wednesday in the Dutch island of Aruba with the help of the DEA, after he arrived to take up a post as Consular-General at the Venezuelan embassy there. Washington’s attempt to extradite him to the U.S., despite his diplomatic immunity, collapsed on Sunday night when the government of the Netherlands acknowledged Carvajal’s protected diplomatic status.

My argument was that the failed extradition was another attempt by the hard right to blow up diplomatic relations with Venezuela. It failed for the same reason that the previous attempt – the proposed economic sanctions against Venezuela that passed the House of Representatives on May 28,  did not become law:  President Obama (or whoever is in charge of U.S. foreign policy in the hemisphere), does not want to break diplomatic relations with Venezuela at this point.

Since yesterday, three more developments have followed the failed extradition attempt:  first, Senator Bob Corker (the ranking Republican on the Senate Foreign Relations Committee) released his hold on the sanctions legislation.  This was what was officially holding up the sanctions bill in the Senate. 

At the same time, a group of senators including Robert Menendez, Bill Nelson, and Marco Rubio, the co-sponsors of the Senate’s version of the proposed Venezuela sanctions bill, released a letter urging Secretary of State John Kerry to “use the existing authorities that the Administration has to levy targeted sanctions against individuals that have been complicit in human rights violations in Venezuela.” This may be a signal from the most militant anti-Venezuela members of the Senate that they have reached some sort of agreement not to push forward with their own sanctions legislation, which the State Department has referred to as “unhelpful,” if the Obama administration utilizes its “existing authorities” to pressure Venezuela.

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How Have Latin America’s Political Leaders Responded to Israel’s Siege on Gaza? Print
Written by Stephan Lefebvre   
Monday, 21 July 2014 16:03

On July 10th, just two days after Israel launched Operation Protective Edge (the largest attack on Gaza in several years) President Obama released a statement in which he “reaffirmed Israel’s right to defend itself.” With a death toll now over 550, it is important to look beyond U.S. government sources for information and perspective. Foreign policy among the countries in Latin America conforms to the long-standing, overwhelming international consensus that opposes Israeli aggression and occupation, but it also reflects the region’s “second independence.” Over the last 15 years, most countries in Latin America have increased their ability to pursue a foreign policy agenda separate from the goals of the U.S. State Department. In the vast majority of cases, reactions to the latest hostilities are fundamentally at odds with the U.S. position, but they are also varied: many governments directly criticize Israel, using words like “crimes against humanity” and “genocide” to describe recent events; other official statements limit themselves to calling for a ceasefire and a peaceful resolution to the conflict.

Some of the strongest statements were issued by left-leaning governments in South America, including those of Argentina, Bolivia, Brazil, Chile, Ecuador, Uruguay and Venezuela. The government of Argentina issued a statement “strongly condemn[ing] that Israel -- defying calls by the Security Council, by the Secretary General and by the many voices of the international community – has decided to escalate the crisis by launching a ground offensive.” President Evo Morales of Bolivia announced that he had petitioned the United Nations High Commissioner for Human Rights (UNCHR) to consider a case against Israel at the International Court of Justice (ICJ) for “crimes against humanity” and “genocide.” (Bolivia broke diplomatic relations with Israel in 2009 over Israel’s Operation Cast Lead assault on Gaza.) The statement from Brazil reads in part:[1]

The Brazilian Government vehemently condemns the Israeli bombardment of Gaza, with disproportionate use of force, which resulted in more than 230 Palestinians dead, many of them unarmed civilians and children. It equally condemns the firing of rockets and mortars from Gaza into Israel.

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The Problem with the Venezuela Sanctions Debate Print
Written by Peter Hayakawa   
Friday, 18 July 2014 10:56

As murmurs of U.S. sanctions against Venezuela continue in the aftermath of the protest violence there, researcher Michael McCarthy recently published an article in World Politics Review making some good arguments for why they would be a bad idea. He points out that unilateral sanctions lack regional support, and argues that they would discourage dialogue within Venezuela, would likely be ineffective, and may even harm U.S. interests by scuttling efforts to improve and maintain ties in the region.

McCarthy claims that the push for sanctions represents a “symbolic action” on the part of U.S. officials to communicate “universal support for human rights.” This assumption is pervasive in the mainstream debate about Venezuela sanctions; most commentators assume that the moral basis of imposing sanctions is sound and that the only real debate is on whether they will have the desired practical effect. In this context, some of the most obvious questions are missing from the discussion—in particular: a) what right does the U.S. have to enact coercive, unilateral economic measures against democratically-elected governments (measures that in this case, happen to be nearly universally opposed in the rest of the region and, as a study by pollster Luis Vicente Leon recently presented at the Washington Office on Latin America shows, are overwhelmingly opposed domestically in Venezuela)? And b) what integrity does the U.S. have when it comes to promoting human rights?

Last year, over a thousand unarmed protestors were killed by the U.S.-backed military government of Egypt after an illegal coup overthrew the country’s first democratically-elected president. Among those killed was a young journalist, Ahmed Assem el-Senousy, who had the misfortune to film his own murder at the hands of a government soldier who had spotted his camera.  It was a grim echo of an event from another era—in June, 1973, Swedish journalist Leonardo Henrichsen similarly filmed his own death in Chile at the hands of a soldier in an unsuccessful military coup attempt that presaged Augusto Pinochet’s U.S. supported takeover three months later. The State Department claims that U.S. interests always align with democracy and human rights, but it is hard to miss the glaring gap between U.S. rhetoric on these issues and its actions.

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The Americas Blog seeks to present a more accurate perspective on economic and political developments in the Western Hemisphere than is often presented in the United States. It will provide information that is often ignored, buried, and sometimes misreported in the major U.S. media.

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