Tough Judge Thomas Griesa weighs Argentina’s fate
Before taking on Argentina’s debt exchange, Judge Thomas Poole Griesa’s most famous case involved a failed New York highway project and some fish.
“What was memorable about him – aside from that he ran a pretty tight ship – was that he was willing to learn,” said Albert Butzel, a lawyer who appeared in front of Judge Griesa in the early 1980s to argue against the “Westway” project that would have seen a large chunk of the Hudson River on Manhattan’s west coast filled in to make room for tunnels.
So willing was Judge Griesa that he hopped on a boat to tour the waterfront and learn more about the effect that construction of the tunnels would have on striped bass – the saltwater fish native to the area.
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In a decision that went against powerful interests – including then New York Mayor Ed Koch and US President Ronald Reagan – Judge Griesa blocked the project after accusing a federal agency of lying about Westway’s environmental impact.
It was a landmark case for New York and one that paved the way for the Hudson River Park that runs from the southern tip of the city to 59th Street.
Now the 83-year-old judge who helped shape the landscape of Manhattan is influencing the financial future of a country more than 5,000 miles to the south.
Argentina this week defaulted on its debt for the second time in 13 years following a protracted court battle that has seen Judge Griesa, a veteran of the Southern District Court of New York, become a household name in Argentine politics.
Jurisdiction over the bonds landed in Judge Griesa’s lap after Argentina agreed to negotiate the exchange of some of its debt issued under New York law in the US courts.
For years Judge Griesa’s decisions were viewed as friendly to the Argentine government. But that changed abruptly in 2012, when he ruled that the country could not make payments on exchanged debt without also paying so-called holdouts – bondholders who refused to participate in the earlier exchange deal.
The decision surprised many and set Argentina on a collision course with investors.
“What he thinks is what he says,” notes Guy Struve, a retired partner at Davis Polk & Wardwell, the law firm, who used to work with Judge Griesa.
Judge Griesa was born in Kansas City, Missouri in 1930 and studied classical history at Harvard University before going on to Stanford Law School. He joined Davis Polk and was appointed a federal judge by former US president Richard Nixon at the relatively young age of 42.
We’re in the soup
- Thomas Poole Griesa, referring to the banks that are stuck in the middle of Argentina’s debt crisis
In his long career Judge Griesa has ruled in cases involving a New York mobster, a Guatemalan drug dealer and a hotels company businesswoman accused of tax evasion, yet it is his handling of the Argentina case that is likely to define his career.
When federal judges have served for many years, they achieve “senior” status, and are allowed to pick and choose their caseloads for the first time. Many would have preferred not to take on Argentina’s sprawling debt lawsuits, given a choice.
Judge Griesa became senior in 2000 – and thus volunteered for more than a dozen years of litigation which may yet tip the balance of power in financial markets in favour of holdouts over defaulting governments.
While Judge Griesa, a Christian Scientist, has cultivated a reputation as an arbitrator who is unafraid to make controversial decisions, colleagues sometimes whisper that he has a tendency to make judgments that can have unintended consequences.
It may be a habit that comes back to haunt him in relation to the Argentina case. A day after the country’s default, few were certain what the result of the lengthy debt saga in the US courts would be.
In a hearing last week Mr Griesa said simply: “We’re in the soup.”
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