Don’t Cry For Them: Coalition Urges Lawmakers to Oppose World Bank Loan to Argentina

World Bank HQ in Washington, D.C. (courtesy Wikimedia Commons)

The United States is in debt by more than $17 trillion dollars and it is imperative to take steps to curb the out of control spending and inefficiencies in government that have led us to this point. One area that elected officials must keep a close eye on is lending money to other nations. The World Bank, which receives backing from U.S. taxpayers, is considering a loan to Argentina for $3 billion. Argentina has been clearly defined as a bad actor in the international community and taxpayers should not be contributing a single dollar to support a loan that may never be paid back. Argentinean officials have publicly and repeatedly announced their intentions to defy the U.S. judicial system.  In fact, they’ve actively ignored U.S. court judgments, and their disrespect for the rule of law combined with their unwillingness to abide by its commitments is not just limited to the United States. Argentina also continues to ignore the World Bank’s arbitrational body, the International Centre for Settlement of Investment Disputes (ICSID). Since 2011, US policy regarding multilateral development banks’ (MDB) lending to Argentina has been the same: oppose any loans. In an effort led by the Taxpayers Protection Alliance & the National Taxpayers Union; American Commitment, American Majority Action, Center for Individual Freedom, Cost of Government Center, Free Congress Foundation, Frontiers of Freedom, Hispanic Leadership Fund, Institute for Liberty, The Latino Coalition,  Less Government, National Black Chamber of Commerce, National Grange, and Tea Party WDC signed on to a coalition letter urging lawmakers to stand firm on that policy and urge the Obama Administration and the Treasury Department to oppose the loan, and to withhold funding from the Bank if it continues to underwrite “financial rogue” states like Argentina. Taxpayers are already on the hook for trillions in wasteful spending, the government shouldn’t be adding to that by lending out money that stands zero chance of being paid back.

Read the full letter below:

October 29, 2013

Dear Member of Congress:

The undersigned groups write to call your attention to alarming news that the World Bank – which receives backing from U.S. taxpayers – is considering a new loan to Argentina, a country that has been clearly defined as a bad actor in the international community. Press reports indicate that Argentina will receive a new $3 billion loan from the World Bank, even though Argentina has had numerous public stand-offs against U.S. interests.

Argentinian officials have publicly and repeatedly announced their intentions to defy the U.S. judicial system. Their government has actively ignored more than 100 U.S. court judgments and counsel for Argentina told a U.S. Second Circuit Court of Appeals in February 2013 that it “would not voluntarily obey” the district court’s injunctions in the case of NML v. Argentina, even if those injunctions were subsequently upheld by the Second Circuit.

Argentina’s disrespect for the rule of law and unwillingness to abide by its commitments is not just limited to U.S. courts and U.S. investors. Argentina also continues to ignore the World Bank’s arbitrational body, the International Centre for Settlement of Investment Disputes (ICSID). As the Financial Times pointed out, “of a total of 439 legal disputes between countries and companies at the World Bank tribunal, no fewer than 50 involve Argentina – far more than anywhere else, with socialist Venezuela lagging some way behind in second place.” Several companies that hold ICSID claims against Argentina are American. While Argentina has recently said it will pay five of the outstanding claims, it is yet to be determined if it will comply. Argentina also promised to repay its long-outstanding debts to governments like the U.S. and France, but for over a decade has not done so.

For these reasons and others, the United States implemented a policy in 2011 to oppose all multilateral development banks’ (MDB) lending to Argentina. Following the leadership of the U.S., several other nations including the United Kingdom, Spain, Germany, Japan, the Netherlands, and Canada also opposed MDB loans to Argentina. However, news reports now indicate the U.S. and others may be contemplating approval of this current request to the World Bank.

It remains in our best interest to ensure that no more World Bank loans are approved for Argentina. A country that continues to flout U.S. court judgments and stiff our lenders cannot also continue to receive money from international institutions, for which the U.S. provides core funding. Every failure to satisfy U.S. court judgments results in lost revenue to the Treasury, to U.S. investors, and to hard-working Americans who invested in Argentina.

We urge you to send a strong message to the Administration to oppose these World Bank loans, and for Treasury to withhold funding from the Bank if it continues to underwrite “financial rogue” states like Argentina.

Thank you for your support on this issue. We look forward to your reply.

Sincerely yours,

American Commitment

American Majority Action

Center for Individual Freedom

Cost of Government Center

Free Congress Foundation

Frontiers of Freedom

Hispanic Leadership Fund

Institute for Liberty

The Latino Coalition

Less Government

National Black Chamber of Commerce

National Grange

National Taxpayers Union

Taxpayers Protection Alliance

Tea Party WDC