Credit Suisse Banker Pleads Guilty in Mozambique Loan Scandal

Washington DC - On Friday, former Credit Suisse banker Andrew Pearse pled guilty in US Federal Court for accepting millions of dollars in a fraud scheme that led to a $2 billion Mozambique loan scandal and debt crisis in the East African country. Pearse and six others are accused of taking $200 million in the scheme.

“Mozambique, one of the poorest countries in the world, is dealing with a financial crisis because of the greed of corrupt bankers," said United Nations corruption and finance expert Eric LeCompte and Executive Director of the religious development group Jubilee USA Network. “This behavior is only possible because of a lack of global loan transparency and a lack of public budget transparency in Mozambique.”

US prosecutors argue that Credit Suisse and Russian-based VTB finance group hid secret loans to the Mozambique government by bribing bank and government officials. The loans were supposed to support the tuna fishing industry, but instead supported the outfitting of boats for military attack crafts. When the secret loans to Mozambique were revealed in 2016, the IMF and World Bank cut ties with the country, halting development funding. This year, Mozambique was hit with two cyclones further impacting the debt ridden and poverty stricken country.

"Mozambique is struggling to recover from a debt crisis and terrible natural disasters," noted LeCompte.

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IMF Head Christine Lagarde Resigns to Pursue European Central Bank Nomination

Washington DC - The Managing Director of the International Monetary Fund, Christine Lagarde, announced that she is resigning. Lagarde is pursuing her nomination to lead the European Central Bank. Her resignation takes effect on September 12th.

"Lagarde moved forward new focuses on gender and inequality at the International Monetary Fund," said Eric LeCompte, the Executive Director of the religious development group Jubilee USA. "After the Greek crisis, we saw her lead shifts in thinking on the problems with austerity, although we didn't see enough changes in austerity policies at the IMF."

Since the creation of the IMF and World Bank in 1945, the United States and Europe who hold the controlling votes of the financial institutions, had a "gentleman's agreement" that the head of the World Bank should be an American and the head of the IMF should be a European.

"Now that Lagarde is moving on, there are growing calls for the new head of the IMF to be selected based on the merits of the nominee as opposed to whether or not the person is born in Europe," stated LeCompte who serves on United Nations finance expert groups.

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IMF's Lagarde to Resign September 12th

Washington DC - The head of the International Monetary Fund, Christine Lagarde, announced Tuesday that she will resign on September 12th. Lagarde was nominated to lead the European Central Bank earlier this month.

Eric LeCompte the Executive Director of the religious development group Jubilee USA, releases the following statement:

"Lagarde moved forward new focuses on gender and inequality at the International Monetary Fund.

"After the Greek crisis, we saw her lead shifts in thinking on the problems with austerity, although we didn't see enough changes in austerity policies at the IMF.

"Now that Lagarde is moving on, there are growing calls for the new head of the IMF to be selected based on the merits of the nominee as opposed to whether or not the person is born in Europe."

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States Tackle Student Debt and For-Profit Colleges Rise

Washington, DC - As Democratic presidential candidates debate student debt, States attempt to tackle what they see as a debt problem impacting their economies. California relieved $59 million in student debt for doctors in exchange for treating low-income communities. Maryland passed a tax credit to offer student debt relief.

“We are dealing with a student debt crisis that makes inequality worse," noted Eric LeCompte, the director of the religious debt relief group Jubilee USA. "Students are also being exploited by for-profit colleges that offers students high debt loads with too few job opportunities."

New US Federal research shows for-profit colleges are increasing student enrollment while increasing high levels of student debt. The data illustrates that less than 40% of students graduating from for-profit colleges had salaried positions a year from graduation. The federal research noted that public university and nonprofit private school graduates attained salaried positions at higher levels of between 45% and 51% within a year of graduation.

Read the recent federal research on for-profit colleges and debt

Read about student debt debated by presidential candidates and Republican and Democratic proposals

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United Nations Calls for Mozambique Disaster Aid as Country Wrestles with Illegal Debt

Washington, DC - On Thursday, UN Secretary General Antonio Guterres called for more relief aid to be sent to disaster-recovering Mozambique. The country is reeling from two devastating cyclones and wrestling with debts that Mozambique's high court calls illegal. 

“The International community needs to deliver rebuilding aid to Mozambique," noted UN finance expert and head of the religious development group Jubilee USA, Eric LeCompte. "Debts declared illegal by Mozambique's courts should not be repaid, especially as the country is struggling to recover."

The top court of Mozambique declared last month that the $850 million Eurobond to Ematum, the state-run tuna operation, is illegal.  In 2016, the International Monetary Fund ceased funding for the East-African country because of billions of dollars in debt that was supposed to equip fishing boats, but instead created Mozambique military attack crafts.

“Mozambique desperately needs debt and disaster relief,” said LeCompte. “Mozambique is a troubling tale of corruption and poor people being exploited because of a lack of public budget transparency and international standards on responsible lending," said LeCompte. 

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Ballooning Student Debt Debated by Presidential Hopefuls

Washington DC - American student loan debt topped $1.6 trillion dollars this year, surpassing credit card and auto loan debt combined. More than 45 million people hold student debt, owing an average of $35,000. 20% of current borrowers are behind in student loan payments and the Brookings Institution released data that 40% of student borrowers will default by 2023.

Presidential candidates, Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) proposed student debt relief plans. The Sanders plan seeks to eliminate all student debt while the Warren plan offers substantial relief on a sliding income scale.

“Student debt is a cause of inequality and a challenge for our economic growth,” stated Eric LeCompte, Executive Director of the religious debt watchdog group Jubilee USA Network. “Americans need student loan relief and we also need solutions for the root causes of high student debt. We need to reign in for-profit colleges and schools that have low retention rates. Student borrowers should be able to access bankruptcy protection and we need to address the high costs of university education.”

The Trump Administration suggests there should be caps on student lending that, the White House argues, would drive the cost of college tuition down and ensure responsible lending and borrowing. In the last Congress, Representative Virginia Foxx (R-NC) sponsored the Prosper Act to stop student loans from accruing interest while students are still taking classes. Foxx's legislation would also eliminate or lower other types of federal aid or student loan relief.

"When students graduate with high debts, they don't buy homes and invest in our economy. Student debt is affecting our entire economy and we can not afford to leave this problem unaddressed," noted LeCompte. 

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Senate Bill Tackles Tax Evasion, Secrecy and Money Laundering

Washington DC - Last Wednesday, Senators Ron Wyden (D-OR), Marco Rubio (R-FL) and Sheldon Whitehouse (D-RI) introduced the Corporate Transparency Act of 2019, which would reveal the secret owners of shell corporations to law enforcement.

"This legislation is critical to stop crime, tax evasion and corruption," stated United Nations finance expert and Jubilee USA Executive Director, Eric LeCompte. "Shell companies facilitate human trafficking, tax evasion and the stealing of relief monies in the developing world."

In mid-June the House of Representatives voted in the House Financial Services Committee to release the House Bill for a vote this year. The House legislation is sponsored by Representative Carolyn Maloney (D-NY), Representative Peter King (R-NY) and Representative Tom Malinowski (D-NJ).  

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IMF's Lagarde Nominated to Head European Central Bank

Jubilee USA Releases Statement 

Washington DC - The head of the International Monetary Fund, Christine Lagarde, was nominated Tuesday to lead the European Central Bank.

Eric LeCompte the Executive Director of the religious development group Jubilee USA, releases the following statement:

"Lagarde brings a lot to the helm of the European Central Bank. She understands the concerns of potential financial crisis and the need for keeping women at the center of decision-making.

"Her legal background is important as our global economy needs more than economic forecasts and now requires legal solutions to ensure financial stability.

"During her time at the IMF, Lagarde dealt with the Greek crisis and came to understand that austerity is a deterrent for economic growth. This lesson is important as economic policies need to support growth and sustain employment across Europe."

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We Won - NAFTA, Puerto Rico, Tax Transparency

Friends,

Thanks to your support and partnership, we won our campaign for emergency food and housing assistance for people recovering from hurricane destruction in Puerto Rico.

Your support, e-mails and calls to Congress moved forward more than $8 billion in debt relief and disaster aid for Puerto Rico and billions more for Americans wrestling with disasters from California to Minnesota and Texas to Florida. 

Please join me and make a donation to Jubilee USA Network today so we can keep on winning. For the next week, your tax-deductible gift will be doubled.

Your gift means:

  • We can move forward debt and disaster relief for Puerto Rico. Already your efforts won $50 billion in aid and moved forward a super bankruptcy process for the island. Your gift means we can work to make sure debt relief means stopping austerity policies and winning the $70 billion in recovery aid Puerto Rico still needs.

  • Congress just introduced our legislation to combat financial secrecy and anonymous shell corporations. This type of "Panama Papers" secrecy facilitates the theft of debt relief aid, human trafficking and contributes to the loss of more than a trillion dollars of revenue in the developing world. With your support, we can get this legislation signed into law in the next year.

  • Working together, we moved the White House on eliminating harmful provisions in trade agreements that favor predatory debt collecting hedge funds and abusive corporations. Now as negotiations continue on a new NAFTA, your support means we can push for access to medicines for vulnerable populations and all who need life saving medicines.

  • When you make a contribution to Jubilee USA now, you further our efforts to address student debt and payday lending. Working together, we ensured certain types of student loans had low interest rates. When you donate to Jubilee USA now, it means our bipartisan work can build bridges to protect students and consumers.

Please make a contribution to Jubilee USA today so we can continue to move forward strategic campaigns. Your gifts are doubled and matched for the next week.

Summer is the most difficult time for fundraising and for us to sustain our work.

Your contributions are needed and so appreciated as we work to move the White House, Congress, the G20 and the IMF during these hot summer months.


Gratefully,

Eric

Eric LeCompte
Executive Director

 

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G20 Leaders Wrestle with Trade, Climate and Financial Crisis

Jubilee USA Releases Statement on Japan Summit

Osaka, Japan - Leaders of the world's wealthiest economies gathered at the annual G20 Summit to discuss global policies on trade, climate, debt, tax and financial crisis prevention.

Eric LeCompte the Executive Director of the religious development group Jubilee USA, releases the following statement on the G20 Japan Summit:
"Trade tensions, climate change concerns and preventing global financial crisis dominated much of the Osaka Summit.

"There is great concern at the G20 meetings about debt crises and future financial crisis.

"The G20 was founded to prevent financial crisis and there is willingness to move forward global policies on debt sustainability and transparency. The question is whether or not we can achieve policies that move beyond voluntary crisis prevention and implement binding policies that will prevent future crisis.

"Combating financial secrecy and raising revenue in countries remained a key focus of the Japan meetings.

"Fundamentally, we need trade policies that protect workers and the vulnerable. We need to see shifts in the status quo on trade policies.

"Climate is a critical issue, especially as the G20 focused this meeting on ensuring that economies can be more resilient in the face of natural disasters. Economies that can be resilient in the face of disaster need debt policies that offer relief until recovery goals are met."

 

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