Monday, October 16, 2017

Fiscal board to refer any illegality in Puerto Rico debt to authorities

By on August 4, 2017

FAJARDO, Puerto Rico – Fiscal control board Chairman José Carrión said that if the investigation the panel ordered on the issuance of Puerto Rico’s debt reflected any illegality in the process, it would be referred to the authorities.

“If something illegal is discovered, logically we will refer it to the authorities for justice to be done,” Carrión said Friday, when the ninth public meeting of the island’s financial oversight board was held.

The chairman of the body created by Promesa, a federal law, explained that the investigation’s scope will not be limited to a “select group” but will encompass, “in general terms, entities of anyone who could have taken action on this matter” of debt issuances.

Fiscal board to investigate Puerto Rico debt

However, the insurance broker did not specify the time period to be analyzed by an independent investigator who will be selected by a special board committee. Its members will be Carrión and three other board members: Arthur González, Ana Matosantos and David Skeel.

“The committee we have just appointed today will have to choose a third party and we will be working to present to the people of Puerto Rico what we discover,” Carrión said.

“We took this action for two reasons, mainly it was always based on the premise that this issue was going to be dealt with in court because of Title III, what we found was the action was somewhat limited and we understood that, to be fair and correct, we should broaden the base,” Carrión explained as the reason for investigating the debt.

Puerto Rico gov’t objects to creditor request for probe into debt

Two days ago, the board announced it would investigate the practices of disclosure and sale of the island’s public debt.

The announcement came at a time when federal Judge Laura Taylor Swain, in charge of Title III for Puerto Rico, has before her consideration a petition from a group of creditors to investigate the debt. Specifically, they wanted to investigate the role of the Banco Popular, Banco Santander and the Government Development Bank (GDB) in the government’s issuances. On Aug. 9, the federal judge will determine whether to accept this petition.The question to Carrión was whether he would be willing to investigate or prosecute any member of the board, were they to be involved in any illegal way with respect to how the debt was incurred.

Currently, the board has the president of the GDB, Christian Sobrino, as the government’s representative.

Within the board are two former GDB presidents: Carlos García (2009-2011) and José Ramón González (1986-1989). Both also worked at Banco Santander. García was executive vice president of Banco Santander Puerto Rico from 2002 to 2004 and then executive vice president and operating director of Santander Bancorp from 2004 to 2008, when he also served as COO of Banco Santander Puerto Rico that year.

Meanwhile, González was president of Santander BanCorp from 2002 to 2008 and of Santander Securities from 1996 to 2001.

Both González and García have denied conflicts of interest in their former positions and their work within the board.

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