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Baupost Group

Baupost Group is a Boston-based hedge fund worth an estimated $30 billion. While the Puerto Rican people were struggling to rebuild following the devastation wrought by Hurricane Maria in 2018, Baupost held and demanded repayment of bonds entitling it to a piece of Puerto Rico's "debt." The CEO of Baupost Group, Seth Klarman, is a Boston area billionaire and mega-donor to Zionist organizations.

Beginning in 2017, Baupost Group bought up bonds entitling the company to $931 million worth of Puerto Rico's "debt." (Puerto Rico's total bond debt stood at $74 billion as of 2017.) Baupost bought these bonds at a rate of pennies on the dollar, before insisting that the Puerto Rican people should pay the bonds back "at par" (i.e. at 100 cents on the dollar). In a 2018 piece in The Intercept, David Dayan reported:

[Baupost] had been hiding $911 million in COFINA bonds, a debt instrument backed by sales tax receipts, through a shell corporation named Decagon Holdings. A disclosure last week from the COFINA bondholders said that Baupost’s investment had increased to $931 million. Klarman has consistently dismissed cries for debt cancellation for Puerto Rico, saying the island would be better off in the long run repaying its debts. Baupost bought the bonds on the cheap and would reap a huge payday if paid back at face value.

This bond debt that Baupost CEO Seth Klarman insists the island would be "better off in the long run repaying" to billionaires like himself, cannot in reality be paid by the people of Puerto Rico. Paying down the debt even partially is only possible through disastrous austerity policies which deny basic essential services to the Puerto Rican people. As longtime Puerto Rican activist Juan Gonzalez wrote in a separate 2017 piece in The Intercept:

During the past two years, the commonwealth [or Puerto Rico's] government has sharply raised electricity and water rates. It has increased the sales tax (now a value added tax) to 11.5 percent. It has proposed ending all pensions for new workers and cutting existing benefits by an average of 10 percent. And last week, it announced the closing of 179 public schools for the coming school year. In addition, the control board has called for a $450 million cut over the next four years to the island’s 70,000-student public university.

Insisting that the Puerto Rican people go without essential services so US-based hedge funds like Baupost Group and US billionaires like Seth Klarman could become even richer was morally perverse, to say the least. Even more so given that this "debt" Puerto Rico "owes" is the direct result of the US government's over a century-long (and ongoing), violently-enforced policies of colonial plunder of the island for the purpose of extracting its sovereign resources to enrich the United States. Rather than Puerto Rico owing a "debt" to the United States, in reality the United States owes the Puerto Rican people reparations for over a century of theft, abuse, and violent repression. 

To this day, Puerto Rico remains a "territory" (which is to say, a colony) of the United States. The United States denies the Puerto Rican people even the illusion of sovereignty over the management of their own affairs and economic resources. Key decisions about the island's finances are made not by Puerto Rican representatives elected by the Puerto Rican people, but by a fiscal control board called the Financial Oversight and Management Board (FOMBPR), appointed by and accountable to the interests of the US government, US corporations (like Baupost), and US billionaires (like Seth Klarman). Puerto Ricans commonly refer to this US-imposed fiscal control board as "la junta de control" in a (not unfounded) reference to military "juntas" that the United States and its regional backers have violently imposed upon nations across Central and South America and the Caribbean over the past century to repress attempts by peoples in the region to engage in policies such as land reform and the independent development of their own sovereign resources.

The immorality of Klarman's insistence that Puerto Ricans should repay at par the debts Baupost Group bought up at pennies on the dollar came into even sharper focus following the devastation wrought upon the island by Hurricane Maria in 2018. In the midst of deaths estimated at 3,000 people (which Puerto Ricans insist is a drastic undercount) and damages to the island estimated at $94.4 billion, rather than forgiving Puerto Rico's (colonially-rooted) "debt" in order to allow the Puerto Rican people breathing room to rebuild and repair essential civilian infrastructure, Baupost Group remained firm in its insistence on its right to enrich itself from the COFINA bonds it had bought up at pennies on the dollar.

Following Hurricane Maria, Baupost's profiteering from Puerto Rico's debt came under increasing scrutiny from Puerto Rican and other Boston area community members. Community members demonstrated repeatedly in front of Baupost's Boston office, while Harvard University students and community allies demonstrated at Harvard to demand that Harvard divest from its nearly $2 billion worth of investment in Baupost Group. Harvard students also protested Seth Klarman's participation as a keynote speaker at an Investment Conference at Harvard Business School. Students at Yale and Cornell similarly protested to demand that Yale and Cornell divest from the hundreds of millions USD commitments each held in Baupost Group. (See also: here and here.) 

Amidst this heightened negative publicity, Baupost chose to quietly sell off its holdings in Puerto Rico’s debt in the first quarter of 2019, as reported in Bloomberg. While it is not confirmed how much Baupost made from the sale of the bonds, Bloomberg states that Baupost likely profited from the sale, given the typical values of COFINA bonds in 2017 when Baupost acquired them relative to the typical values of these bonds in the first quarter of 2019 when the company sold them off.

It is worth highlighting that a portion of the wealth Baupost has extracted from Puerto Rico has undoubtedly flowed into Israel’s ongoing colonization of Palestine, given that Baupost CEO Seth Klarman is a major donor to numerous organizations which materially and ideologically sustain the zionist project.

Address (St. James Ave, Boston, MA) comes from this SEC filing of the Baupost Group. See also entry on Seth Klarman, and the Klarman Family Foundation.

10 Saint James Avenue, Suite 1700, Boston MA 02116

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