6:06PM EST November 29. 2012 - WASHINGTON -- A bill authored by GOP Rep. Connie Mack IV that would benefit one of Mack's largest political benefactors represents a "bold" step to safeguard American businesses and investors, the congressman said Thursday.
The Judgment Evading Foreign States Accountability Act would pressure Argentina to pay U.S. investors more than $3.5 billion worth of principal and interest on bonds that Argentina sold to raise capital. The country defaulted on the bond payments in 2001.
One of those investors is New York venture capitalist Paul Singer (no relation to the second reporter on this story), a major source of campaign financing for Republican candidates, including Mack and his wife, Republican Rep. Mary Bono Mack of California.
Employees of Singer's investment firm, Elliott Management, also donated $39,000 -- more than any other single company -- to Connie Mack's Florida Senate campaign.
The connection between Singer and Mack's legislation was first reported by USA TODAY on Wednesday.
The House Foreign Affairs Subcommittee on the Western Hemisphere voted Thursday to approve Mack's bill. Mack, who chairs the panel, voted for the measure, which had bipartisan support.
The bill would bar defaulting nations from U.S. capital markets and would require the U.S.government to take a nation's default status into account when making decisions about foreign aid. It was the only bill Mack has moved through the subcommittee this year.
Singer has battled in U.S.courts for years over repayment of the Argentinian debt. Court records show Argentina owes Singer's companies more than $1 billion.
He isn't the only one pursuing repayment by Argentina. Several large investors have formed a coalition called American Task Force Argentina seeking repayment of the debt.
President Obama suspended trade preferences for Argentina earlier this year over the bond dispute.
But Mack said the White House has not gone far enough to protect U.S. interests.
"Many people in the United States are unaware of Argentina's irresponsible behavior and blatant disregard for the rule of law," Mack said before the committee voted to approve his proposal. "Those who are injured as a result of this conduct often have little or no recourse. (This bill) takes bold steps to protect U.S.businesses and investors."
Last year, Singer gave $1 million to Restore our Future, the super PAC supporting GOP presidential candidate Mitt Romney. He used another $1 million to create American Unity, a PAC that supported pro-gay Republicans.
American Unity paid for ads backing eight congressional candidates in the 2012 election, including Bono Mack. It spent just over $423,000 on ads attacking Bono Mack's opponent,according to campaign finance records compiled by the non-partisan Center for Responsive Politics.
After Thursday's hearing, Mack told a reporter he has never spoken with Singer about the legislation. He said he didn't learn the venture capitalist was pursuing repayment from Argentina until after he had introduced the bill.
"This is an important function of this subcommittee and everyone recognizes that Argentina has a responsibility to pay its debt to the United States," Mack said. "As a member of Congress, I believe it's my job to stand up for America and America's interests around the world."
Last week, a federal judge in New York ordered Argentina to pay U.S. bondholders and scolded Argentine officials, including President Cristina Fernández de Kirchner, for repeatedly stating that they will not pay off the bonds and will not be bound by U.S.court rulings ordering the country to do so.
According to a briefing paper prepared by the subcommittee, Argentina defaulted on its debts in 2001 and in 2005 "unilaterally offered lenders approximately 27 cents on the dollar." Singer's initial filings with the New York court indicate he bought significant chunks of the contested bonds several years later.
Democratic subcommitteemember Rep. Eliot Engel of New York voted against Mack's bill, saying the courts were still dealing with the matter and it's "the wrong time" for Congress to get involved. Eliot also said it's unlikely the full Foreign Affairs Committee will take up the bill anyway.
A spokesman for Singer and Elliott Management declined to comment.
This is Mack's last stint as subcommittee chairman. He will leave Congress in January after losing his bid to unseat Florida Democratic Sen. Bill Nelson earlier this month. His wife also lost her re-election race.
Ledyard King also reports for the Gannett Washington Burea