Between 1996 and 2001, Kensington went after the Congo Republic, a former French colony emerging from a devastating civil war. Though the Central African country is oil-rich, war and endemic government corruption have kept 51 percent of its 3.9 million citizens living on less than $1 a day. Half of them have no clean drinking water, and the average life expectancy is just 53 years. The World Bank reduced Congo’s debt by $2.9 billion in 2006, and many commercial creditors followed its lead. But Singer refused to get in line on Congo. Kensington International, one of Elliott’s affiliated funds, purchased $32.6 million in loans for what a source close to the Congolese government says was less than 7 cents on the dollar. Congo had defaulted, and the banks holding the notes were happy to unload the apparently worthless paper. Kensington sued in the British High Court for principal plus interest and won judgments of more than $100 million in 2002 and 2003. “Most courts think that commercial contracts, no matter how nefariously obtained, are superior to any other legal basis for decisionmaking,” explains Matthew Martin of Debt Relief International, a London-based group that helps developing countries maximize their debt relief.

After beating Congo in court, Kensington dispatched a kettle of lawyers across the globe to chase down Congo’s assets. Last year, the fund seized $39 million in proceeds from an oil sale by Congo to a British trading firm. Kensington has filed four lawsuits in Manhattan Federal District Court, one of which accuses Congo and its state-owned oil company of violating the Racketeer Influenced and Corrupt Organizations Act, a piece of legislation normally used to prosecute the Mafia. Earlier this year, Congo settled all outstanding legal actions with Kensington for an undisclosed amount. Singer’s spokesperson says that Congo acknowledged the legitimacy of its debt to Kensington as part of the settlement.

Despite that concession, debt-relief advocates are appalled by such tactics. They say Singer and the other vultures are rapacious mercenaries, driven by an unconscionable greed that creates incalculable human suffering for millions.

The vultures are unapologetic; in fact, they claim they are the ones doing God’s work. Their argument goes something like this: Without vulture fund suits, primary debtholders would be left with worthless loans, the cost of borrowing would skyrocket for developing nations, and liquidity would dry up. “Vulture funds add liquidity,” says Mitu Gulati, a securities-regulation and corporate-law professor at Duke University School of Law. “Further, they can impose discipline by forcing lawyers to be clearer about what they mean in their contracts.”

Vultures also contend that indiscriminate debt relief rewards corrupt regimes and encourages the kind of wasteful spending that landed these hapless nations in this mess.

Last year, in an affluent Virginia suburb of Washington, D.C., a BBC Newsnight TV crew waited outside the handsome colonial-style home of Michael Sheehan, a 48-year-old lawyer and debt-relief expert. Suddenly, as Sheehan, a fleshy-faced man wearing glasses, with a baseball cap pulled low over his forehead, appeared in front of his house, investigative reporter Greg Palast ambushed him and asked about a lawsuit that Sheehan’s British Virgin Islands-­based Donegal International fund had filed against Zambia, seeking the payment of millions in bad debts. The suit had suddenly made Sheehan public enemy No. 1 for debt-relief crusaders. Palast, chasing his prey down the street with a large microphone, said, “I just want to ask you, Mr. Sheehan, why are you squeezing the poor nation of Zambia? Doesn’t that make you a vulture?” Squirming uncomfortably and avoiding eye contact, Sheehan kept walking. “No comment,” he muttered. “I’m in litigation. It’s not my debt.”

Although Sheehan sat for an interview with Palast later that day, the footage of him outside his home made him look like the perfect debt-relief villain, but that may be painting a black-and-white picture of a very gray world. Sheehan spent a significant part of his career running a nonprofit organization that helped poor countries find creative ways to reduce their debt. In the 1990s, his group arranged debt-for-equity swaps, through which a country could convert its liabilities into partnerships for forestry projects, orphanages, programs to treat such diseases as river blindness, and HIV-AIDS education. Sheehan estimates that he raised about $40 million in Africa, Asia, and Latin America between 1992 and 1996.