Last Thursday, President Cristina Fernández de Kirchner made a televised speech in which she blasted the vulture funds yet again, then told the nation how the case could be ended with one stroke of a pen.
Not her pen, unfortunately. President Obama’s, who she said has the power to veto a court decision if it compromises the United State’s relationship with another country.
President Fernández was citing an article by veteran investigative journalist Greg Palast that appeared in The Guardian on 7th August and was quickly picked up by media outlets in Argentina and all over the world (The president even later posted a translated version of it on her own web site).
Palast’s solution is straightforward:
“Obama could prevent vulture hedge-fund billionaire Paul Singer from collecting a single penny from Argentina by invoking the long-established authority granted presidents by the US constitution’s “Separation of Powers” clause. Under the principle known as “comity”, Obama only need inform US federal judge Thomas Griesa that Singer’s suit interferes with the president’s sole authority to conduct foreign policy. Case dismissed.”
“Indeed, President George W Bush invoked this power against the very same hedge fund now threatening Argentina. Bush blocked Singer’s seizure of Congo-Brazzaville’s US property despite the fact that the hedge fund chief is one of the largest, and most influential, contributors to Republican candidates.”
Great news! If only Obama will act, the default will be reversed! Except that – no. This kind of presidential intervention in an ongoing judicial proceeding, under such circumstances, is not remotely possible.
In fact, there is no “Separation of Powers” clause in the US Constitution. Oops. There is a concept of ‘comity’, but it means something very different. Oops again.
A bit of background: though Congress traditionally defers to the president regarding foreign policy, he does not have, as Palast claims, “sole authority” over its conduct. Treaties and ambassadorial appointments must be ratified by the Senate, for example, and Congress has the right to deny funding for foreign adventures if it does not agree.
As for dismissing the case, there is no mechanism for an executive override of a court decision. At best, the administration could file a legal brief on behalf of a party, which it already did in 2012, voicing strong support for Argentina. In an extreme case, he could issue an Executive Order, but given that Argentina’s case is proceeding along established legal guidelines, there is no basis to do so, and it would surely be overturned on appeal to the Supreme Court.
And as for Palast’s statement that President George W Bush “invoked this power against the very same hedge fund” – he did no such thing. The case was settled in a UK court, and though there were several parallel lawsuits in US courts, there is no sign of direct intervention by the White House. (I contacted Greg Palast for comment on these points, but he did not respond.)
I’ve been an admirer of Palast in the past, but on this topic, he seems to have strayed into magical thinking. While I support Argentina in their struggle against the vultures, Obama’s signature will not cause this case to disappear. For all their moral and human failings, the vulture funds have won key court decisions and hold all the legal cards – especially in the US.
Argentina’s suit at the International Court of Justice is, similarly, no more than a publicity stunt, since the US has already said it does not recognise the Court’s jurisdiction. Even if the Bank of New York wished to abide by an ICJ decision, it could not do so.
President Cristina Fernández de Kirchner deserves better advisers, who will stop her, next time, before she gives a speech based upon demonstrably false pretenses. In their defence, the Guardian column was also republished, without challenge, by media all over the world. But wishing that it were true will not make it so.
Argentina may decide to negotiate with the vultures, or to wait them out, but there is no quick fix coming from Washington DC.