Paul Singer at the World Economic Forum in Davos, Switzerland, Jan. 23, 2013. Credit: WEF/cc by 2.0

By Charles Davis
LOS ANGELES, Jul 31 2013 (IPS)

Vulture capitalist Paul Singer has hundreds of millions of dollars at stake in his legal battle with Argentina over the country’s 2001 debt default.

The promise of a huge payday has led the Wall Street hedge fund manager to sink a small fortune into a campaign against the South American nation portraying it as a close – and anti-U.S. – ally of the Islamic Republic of Iran. (See series, Part One)

One way he has done this is by issuing press releases through the American Task Force Argentina (ATFA), a trade group he helped found, and buying full-page ads in major newspapers.

Giving money to politicians is another way to affect the debate in the United States.

Senator Mark Kirk, an Illinois Republican, has been a vocal critic of Argentina, writing a letter to the country’s president denouncing her agreement with Iran to investigate the the 1994 bombing of the Asociación Mutual Israelita Argentina (AMIA) in Buenos Aires. That letter was later quoted in an ATFA ad.

As it turns out, Kirk has received more than 95,000 dollars from employees of Singer’s firm, Elliott Management, according to the Centre for Responsive Politics. Indeed, many letters expressing concern about Argentina’s ties to Iran appear are signed by lawmakers who have received campaign cash from Singer and his close associates.

A Jul. 10 letter to Attorney General Eric Holder, for instance, urged the Justice Department not to side with Argentina in its legal battle before the Supreme Court, citing both the AMIA agreement and Argentina’s expanding trade with the Islamic Republic “at a time when the rest of the world (including the United States) is attempting to isolate Iran to pressure it to give up its nuclear programme.”

“Rewarding Argentina’s decision to flout well-established international principles regarding the orderly restructuring of sovereign debt has clearly emboldened its leaders to defy other international norms with impunity,” the 12 lawmakers wrote.

Those who signed the letter received more than 200,000 dollars last year from companies and PACs tied to Singer.

One signer, Congressman Michael Grimm, a New York Republican on the House Financial Services Committee, was reelected to Congress last year after receiving 38,000 dollars from Elliott Management, nearly twice as much as his next largest donor.

Grimm has cosponsored legislation demanding “full compensation” for Argentina’s bondholders – the sponsor of that bill, former Congressman Connie Mack, took in 39,000 dollars from Singer’s company – and has urged the Barack Obama administration to investigate Argentina’s relationship with Iran. ATFA has commended Grimm for his work.

Another lawmaker who signed the letter to Holder is Ileana Ros-Lehtinen, a Florida Republican who chairs the House Foreign Affairs Committee. She accuses the Argentine government of colluding with the Islamic Republic to cover up its alleged role in the AMIA bombing and undermining U.S. interests “by giving Iran a larger footprint in the Western Hemisphere”.

But she isn’t just worried about Iranian-backed terrorism. In a 2012 press release, she said it was “troubling that Argentina refuses to honor its outstanding debts, and evades U.S. court decisions.”

Ros-Lehtinen received 108,000 dollars last year from the American Unity PAC. The PAC was founded in 2012 with a one-million-dollar investment from Singer, accounting for more than a third of the group’s budget.

New Jersey Republican Scott Garrett, chair of the House Financial Services subcommittee on capital markets, also signed the letter to Holder. On Jun. 7, 2012, Garrett held a hearing to address the Obama administration’s support for “deadbeat foreign governments . . . at the expense of our own U.S. investors.”

At the hearing, he decried that “U.S. investors are taking billions of dollars in losses, despite Argentina having the money to pay the bill.”

Garrett received 35,000 dollars from employees at Elliott Management last year, more than all but one of his other campaign contributors.

On Jul. 9, a House subcommittee chaired by South Carolina Republican Jeff Duncan held a hearing entitled “Threat to the Homeland: Iran’s Extending Influence in the Western Hemisphere”, the primary purpose of which was to rebut a recent report from the State Department that said Iran’s influence was on the decline.

Duncan received 10,000 dollars in 2012 from the Every Republican is Crucial PAC, which was heavily supported by the executives of Wall Street hedge funds, including Singer.

At the hearing, Douglas Farah, a former Washington Post reporter turned right-wing foreign policy analyst, testified that Argentina “is rapidly becoming one of Iran’s most important allies.”

He accused the government of Cristina Fernández de Kirchner of taking steps “aimed at absolving senior Iranian leaders of their responsibility in a major terrorist attack,” while also embracing “a series of seemingly irrational economic and political polices that favour transnational organised crime, are overtly hostile to U.S. interests, and could offer Iran a lifeline in both its economic crisis and its nuclear programme.”

That testimony was followed by a Jul. 11 letter to Secretary of State John Kerry, signed by a bipartisan group of politicians, including Singer-supported lawmakers Duncan and Grimm.

The letter, which warned that “Argentina may be seeking to aid Iran’s illicit nuclear weapons programme,” urged the secretary to weigh the Fernández government’s “ties with the world’s leading sponsor of terrorism” when considering whether the State Department will side with Argentina in its legal battle with U.S. hedge funds.

Farah, whose testimony was cited in the letter, wrote a Jun. 26 column for the Miami Herald in which he referred to Argentina’s “increasingly cozy relationship with the ayatollahs,” citing the 2012 Nisman report to claim Iran is using the country as a base from which to conduct intelligence and terror operations with the ultimate goal of “exporting the Iranian revolution”.

The column also asserts that the president-elect of Iran “would have been infinitely familiar with the planning” of the 1994 AMIA bombing, a claim echoed by other right-wing pundits but which Nisman himself rejected a day before the column was published.

The column was co-authored by Mark Dubowitz, executive director of the Foundation for Defence of Democracies (FDD), a neoconservative think tank that has been highly critical of Argentina’s relations with Iran. This year, FDD and its analysts have published more than a half-dozen such critiques.

“Why is Argentina letting Iran examine the 1994 AMIA bombing in Buenos Aires, a crime Hezbollah surely committed?” asked Lee Smith, an editor at The Weekly Standard and fellow at FDD, in a column for Tablet magazine. In The Atlantic, FDD’s vice president of research, Jonathan Schanzer, explored the “dark connections between Argentina’s government and Tehran”.

Since 2008, Singer has given FDD at least 3.6 million dollars, according to a 2011 tax filing seen by IPS.

Conservative connections

FDD is but one of many neoconservative organisations with ties to Singer. Since there aren’t that many neoconservatives to begin with, those who don’t recoil at the label all tend to know each other – and serve on each other’s boards.

William Kristol, publisher of The Weekly Standard, serves on the board of the Singer-funded FDD, as well as the Manhattan Institute, a New York think tank that advocates hands-off capitalism and an interventionist military policy; Singer is the chairman of the institute’s board.

In the small world of neoconservative politics, even when there aren’t necessarily financial ties, everyone still knows each other. Still, there are usually financial ties.

In March, Roger Noriega, another former Bush administration official, wrote a piece with José Cárdenas – another Bush official who now works at Noriega’s consulting firm – calling on the U.S. government to hold Argentina accountable “for its failures to abide by its obligations to international financial institutions” and “troubling alliances with rogue governments”. The piece was published by the American Enterprise Institute (AEI), an influential neoconservative think tank in Washington.

Noriega has been paid at least 60,000 dollars (in 2007) by Elliott Management to lobby on the issue of “Sovereign Debt Owed to a U.S. Company.” A tax filing that was mistakenly disclosed and reported on by The Nation shows that the publisher of Noriega’s piece, AEI, received 1.1 million dollars from Singer in 2009. Filings for subsequent years have not been made public.

Asked to comment, an AEI spokesperson told IPS that the think tank had “looked into the matter” and found Noriega “has no conflicts of interest in this regard”.

The other people and organisations named in this article did not respond to requests for comment.

Money is power

Singer has used his riches the way a lot of other wealthy people do: to get richer, of course, but also to promote what he believes – and fund the politicians and pundits who will promote it too.

At the very least, those who benefit from his generosity are going to think twice about opposing his interests; one doesn’t bite the hand that feeds. Some may even see the money they receive from Singer as a reason to actively promote his interests.

One thing is clear: no matter how his case against Argentina turns out, Paul Singer is going to be a very rich and powerful man. If he wins, though, he will be richer. And money in the United States means the power to shape the debate not just on financial matters, but war and peace.

Excerpt:

Four U.S. non-proliferation specialists are urging the Obama administration to impose tougher economic sanctions against Iran and issue more explicit threats to destroy its nuclear programme by military means.

In a 155-page report, the specialists, who were joined by the head of a right-wing pro-Israel lobby group, the Foundation for the Defence of Democracies (FDD), said Washington should declare its intent to institute a “de facto international embargo on all investments in, and trade with” Iran, excepting food and medicine, if it does not freeze its nuclear-related work.

The calls come amidst speculation over a critical meeting between Iran and the five permanent members of the United Nations Security Council – the United States, Britain, France, China and Russia – plus Germany (P5+1), which have met over the last two months in an apparent effort to unify their positions before meeting with Iran. That meeting has not yet been scheduled, but most observers believe it will take place at the end of the month.

The report, “U.S. Nonproliferation Strategy for the Changing Middle East,” also said Washington should “increase Iranian isolation, including through regime change in Syria” and “undertake…overt preparations for the use of warplanes and/or missiles to destroy Iran’s nuclear capabilities with high explosives”.

Only if Tehran provided “meaningful concessions”, among them suspending all uranium enrichment and heavy water-related projects, closing the underground enrichment facility at Fordow, and accepting a highly intrusive International Atomic Energy Agency (IAEA) inspections regime – should sanctions relief be considered, said the report, which was co-authored by FDD’s president, Mark Dubowitz, and David Albright, a physicist who heads the Institute for Science and International Security (ISIS).

In that respect, the recommendations appeared to reflect more the position held by Israel than that of the Obama administration, which has suggested that it will not necessarily insist on a total suspension of uranium enrichment – a demand that Iran has consistently rejected and which many Iran specialists believe is a deal-killer – as a condition for possible sanctions relief.

“The report does not offer a realistic formula for negotiating a satisfactory agreement on limiting Iran’s nuclear programme,” said Greg Thielmann, a senior fellow at the Arms Control Association (ACA) and a former top State Department analyst on proliferation issues. “It would require Iran to capitulate on virtually all fronts.”

“Some of the measures it suggests would be likely to disrupt P5+1 unity….and the maximalist requirements it cites for an agreement could convince Tehran that the U.S. objective is regime change, rather than full compliance with its obligations to the IAEA,” he noted.

In at least one respect, however, the report departed from Israel’s views. Israeli Prime Minister Binyamin Netanyahu, who has repeatedly threatened to attack Iran’s nuclear facilities, warned in September that Tehran could reach what the report called the “critical capability” to quickly build a bomb without detection as early as this spring. The reported concluded that mid-2014 was more likely, although it noted an earlier date was also possible.

“The focal point wasn’t to say, ‘Saddle up, we’re going to war in six months,'” said Leonard Spector, deputy director of the James Martin Centre for Nonproliferation Studies and a co-chair of one of the five task forces that contributed to the report. “This was a more careful assessment of how much time we had, and it allows the sort of (sanctions) pressure, which has been mounting, to have more impact.”

Iranian officials have suggested over the last several months that they are willing to make major concessions, including halting their enrichment of uranium up to 20 percent, transferring a substantial portion of their 20-percent enriched stockpile out of the country, and accepting enhanced IAEA inspections, provided they receive major sanctions relief in exchange. But they have also insisted that their right to enrichment of up to five percent is nonnegotiable.

The P5+1 appear divided over how much sanctions relief to offer and in what sequence. Recent reports indicate that Washington and Paris are pressing to require Iran to implement all of these measures, as well as closing Fordow and clearing up all questions raised by the IAEA regarding alleged military dimensions of Iran’s nuclear programme, before any major easing of sanctions can happen.

The new report, which came out of a series of “roundtables” that included presentations by senior administration officials, clearly favours an even tougher stance.

It explicitly endorsed a letter – reportedly drafted by the American Israel Public Affairs Committee (AIPAC) – to Obama signed by 73 U.S. senators last month that warned, “There should be absolutely no diminution of pressure on the Iranians until the totality of their nuclear problem has been addressed.” The report called for intensified sanctions and more explicit military threats by the administration.

It also called for stepping up covert action against Tehran’s nuclear and missile programmes and exerting greater pressure on China, Hong Kong, Turkey, and the Gulf kingdoms to halt all commerce with Iran.

While the report covered other non-proliferation issues in the Middle East and North Africa, it skipped lightly over Israel, the region’s only nuclear power, noting merely that the Jewish state will consider disarmament initiatives only after all its neighbours make peace with it.

The dearth of attention to Israel, which, unlike Iran, is not a signatory to the Non-Proliferation Treaty (NPT), was described by Thielmann as “conspicuous” given the intended scope of the report.

The report also said Washington should threaten the Islamist-led government in Cairo with tough sanctions if it takes steps to gain nuclear capability.

That the report’s recommendations coincided closely with Israel’s positions may have been due in part to the heavy involvement in the project by staff members from both FDD, which has been a leading proponent of “economic warfare” against Iran, and the Dershowitz Group, a media relations firm with FDD shares office space and reportedly cooperates closely.

Several Dershowitz account executives included in the report’s acknowledgments have previously been associated with Hasbara Fellowships, a group set up by the right-wing, Israel-based Aish HaTorah International, to counter alleged anti-Israel sentiment at U.S. universities. IPS inquiries into the project’s sources of funding went unanswered.

The endorsement by Albright, who is frequently cited by mainstream U.S. media as an expert on the technical aspects of Iran’s nuclear programme, of the report’s policy-oriented recommendations, such as making a military attack on Iran more credible, came as a surprise to some proliferation experts, including two who participated in the roundtables but asked to remain anonymous because of the off-the-record nature of the proceedings.

“His expertise is a technical one, but this is mostly a political paper,” noted one expert. “This covers areas that go far beyond his expertise.”