In a hearing Friday afternoon in New York, attended by lawyers for Argentina and the Queen's vulture funds, Federal Judge Thomas Griesa went off the rails, threatening to declare Argentina in contempt of court if it doesn't cease making what he called "misleading" statements.
He ordered lawyers for both parties to continue negotiating and work with special master Daniel Pollack.
Griesa became unhinged over the Argentine governments's legal notice published Aug. 7 in The Washington Post, The New York Times and other U.S. media, stating that it had paid $539 million to the trustee bank, Bank of New York-Mellon (BoNY), and urged restructured bondholders to demand payment from that trustee, or to consider replacing it with a new one. The notice also repeated harsh criticisms of Griesa and Pollack for their vulture-friendly behavior.
Griesa is troubled by the truth, apparently. He ordered Argentina's lawyers at the Cleary, Gottlieb, Hamilton & Steen firm, to "try" to make the Fernandez de Kirchner government stop making "false statements," such as asserting that its deposit in BoNY constituted payment of its debt obligations under the 2005 and 2010 restructuring. "There has been no payment," he said.
Cleary, Gottlieb attorney Jonathan Blackman told Griesa that his firm had no role in drafting Argentina's legal notices, and that, furthermore, "Argentina is a state. The state takes positions and makes decisions. They are not necessarily legal positions. This is a statement of their position, for better or worse," he said, as Reuters reported Friday.
In her nationally-televised speech August 7, President Fernandez de Kirchner had some choice words for Judge Griesa's mental state. With some irony, she noted that his rulings "possess a quality of urbi et orbi" ("for the city and for the world"), the phrase which signifies that a papal document is addressed not only to the City of Rome but to the entire Catholic world. That is the power Griesa thinks he has, Fernandez said, noting that he also took it upon himself to absolve the Bank of New York from all legal liability for not paying the $539 mn. deposited in BoNY to bondholders. He might as well have included the phrase "ergo, I absolve you," in his ruling, the President said. But, she concluded," I think at this point he has neither head nor feet."
President Fernandez: Obama Could End the Debt Standoff at Any Time
During a nationally-televised speech Aug. 7, Argentine President Cristina Fernandez de Kirchner referred to an article published the same day by investigative journalist Greg Palast in The Guardian to point out that, should he wish to do so, U.S. President Barack Obama could end the debt standoff between Argentina and the vultures at a moment's notice.
Palast reported that Obama could simply invoke the authority which the Constitution's "separation of powers" clause grants all presidents, and citing the principle of "comity," inform Federal Judge Thomas Griesa that the suit brought by vulture kingpin Paul Singer was interfering with the President's sole authority to conduct foreign policy. "Case dismissed," Palast concluded.
Even the brain-challenged George W. Bush had taken action against the same Paul Singer, blocking his seizure of Congo-Brazzaville's U.S. property, Palast points out, adding further documentation on how Singer preyed on Congo Brazzaville, and seized funds earmarked for fighting a cholera epidemic. But Obama and his State Department, who claim to be "on Argentina's side," have "never invoked the magical, vulture-stopping clause," Palast explained.
In her speech, President Fernandez expressed surprise at Palast's revelation, and particularly at his report of how Obama had capitulated to Singer in 2009, quietly paying him $12.9 billion after Singer threatened to shut down Delphi Automotive (which he had taken control of), and cut off GM and Chrysler from autoparts supplies. At the time, Treasury official Steve Rattner had labelled Singer's demands "extortion."
Extortion? President Fernandez pointed out that when Argentina used that term to describe the vultures' demands, Judge Thomas Griesa went berzerk. Yet a member of the Obama administration used the same term to describe Singer, she observed. So what kind of world are we living in?
Fernandez also pointedly reminded both Citibank and Bank of New York, which hold restructured bonds, that their branches in Argentina are Argentine banks which must function according to the nation's laws; thus, she strongly implied, Griesa's orders that these banks not pay bondholders don't apply.
In an interview with The Real News Network published today, Palast repeatedly denounced the absolute insanity of the Argentine case, the vultures' functioning, and the way that Griesa is proceeding. "You can't make this stuff up," he said.