Buenos Aires Fatal Fire Under Investigation

Buenos Aires

The investigation into the fatal fire in Buenos Aires continues as investigators start to look closer at the possibility of arson.  The general public in Buenos Aires is still trying to figure out why the fire control and suppression system failed to work in last week’s blaze which killed nine firefighters at Iron Mountain.

Sources say that investigators have ruled out accidental causes such as electrical problems.  They are now focusing more on arson as a likely cause.  Iron Mountain specializes in the storage and protection of important documents for banks, corporations and governments.

Despite a guarantee on Iron Mountain’s website, the company has a history of  blazes destroying its warehouses.  Ottawa, Canada and London both saw Iron Mountain warehouses go up in flames in July 2006.  New Jersey, in the US, saw two of Iron Mountain’s warehouses burn in 1997 and the investigators ruled those fires “…intentional.”

Iron Mountain has had a presence in Argentina since 2000.  The owner of Iron Mountain is Argentine antagonist Paul Singer.  A powerful and wealthy US speculator, Singer is the same man who was responsible for having the Argentine frigate Libertad impounded and held for three months in Ghana.

Paul Singer

Paul Singer, 79, is the founder and CEO of Elliott Management Corporation, a hedge fund managing company.  Singer founded the company in 1977 with $1.3 million borrowed from friends and family.  Elliott Management Corporation has two wholly owned subsidiaries, Elliott Associates and Elliott International Limited which, combined, have more than $21 billion in assets.  Singer’s investment strategy began as buying distressed debt for pennies on the dollar and selling them at a profit.  Eventually, he discovered he could make more money with less work by buying the debt and then suing the debtor for full payment, a technique he employed in Peru.

In 1996 Singer bought defaulted Peruvian debt for $11.4 million.  Two years later, a US court ruled that a person could not buy debt with the sole purpose of suing the debtor.  In 2000 when the ruling was overturned, Singer won a $58 million judgement from the State of New York.

Singer and Argentina

In 2002 Argentina defaulted on debts that amounted to $182 million.  Singer stepped in and bought the debts.  The Argentine government offered to pay 30 cents on the dollar.  Singer, who assessed the debts were actually worth $2.3 billion, refused the Argentine offer.

After battling each other in courts for a decade, Singer seized the Argentine naval vessel, ARA Libertad, in an attempt to force Argentina to pay up.  Argentina refused to pay the debt and was awarded custody of the vessel in world court.

Singer continues to hold out for 100 cents on the dollar to erase the debt from the books.  He has invested more money in legal proceedings than he would have received had he accepted the Argentine offer of 30 cents on the dollar.  Singer may be remembering the great deal he got when he sued the Republic of Congo.

When the ROC defaulted on a $400 million debt, Singer stepped in and bought it for $10 million.  Then he sued for the entire $400 million and was awarded a cool $127 million in the courts.

The Fire

Investigators for both Argentina and Iron Mountain continue to comb through the charred debris from the tragic fire.  In addition to taking samples for analysis, they have been busy interviewing Iron Mountain employees and members of the Buenos Aires Fire Department.

Sources say that early indicators point to arson as the cause.  It’s too early to speculate which party bears culpability.  Each side, Singer vs Argentina, would benefit if the crime were proven to be the result of actions by the other party.

Regardless of the ultimate outcome, it is striking to note that the blaze came just a few hours after the Central Bank announced a multi-million tax fraud investigation into various companies in South America’s second largest country.

While Buenos Aires’ continues to be under investigation in the fatal fire, Singer would do well to remember that Argentina has stiffed creditors seven times since independence from Spain in 1816. This is their history.

By Jerry Nelson

Washington Post
Buenos Aires Herald

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