Predatory Wall Street investors have created a multibillion—dollar business buying debts owed by struggling governments at steep discounts. They hold out in debt renegotiations and block restructuring deals, then sue to drain countries’ resources and force debt repayment at face value. These investors, called “vulture funds” for their strategy of targeting countries that cannot make sovereign debt payments, frequently leave crushing austerity in the form of regressive taxes, gutted public services, and the privatization of public goods and services in their wake.

Vulture fund predation on indebted countries is not a naturally—occurring phenomenon. Instead, it feeds off of a political and economic power structure that favors the profits of a few unscrupulous investment managers over the well—being of millions of people. In our December 2021 report, “Pain and Profit in Sovereign Debt: How New York Can Stop Vulture Funds from Preying on Countries,”1 we detailed the vulture fund playbook and the role that federal courts in New York State play in their strategy. Vulture funds rely heavily on favorable legal judgments from federal courts in New York because most sovereign debt contracts around the world are governed by New York or English law.

Beyond a compromised legal system that allows vulture funds to buy sovereign debt for the express purpose of suing to collect on it, networks of attorneys, lobbyists, trade groups, think tanks, and cultural institutions facilitate the vulture fund investment strategy and reap profits from debt predation.