Puerto Rico fiscal board chairman: ‘We aren’t acting crazy’
SAN JUAN – The chairman of the Financial Oversight & Management Board for Puerto Rico, José Carrión, played down on Friday legal challenges questioning the seven-member panel’s constitutionality. He also denied allegations that the board is violating the federal Promesa law in its managing of the island’s fiscal crisis.
Some of the island’s creditors and a union have filed lawsuits, challenging the selection process of the board. They argue the appointment violated the Appointments Clause under the U.S. Constitution because none of the seven members were confirmed by the Senate.
“I am not a lawyer, but I know there is difference between a traditional challenge to the Appointments Clause and a challenge to the Appointments Clause based on the territorial situation of Puerto Rico. But I don’t know if that will be the basis for the [board’s] defense. It will be an interesting case and, unfortunately, it will cost the people of Puerto Rico,” Carrión said.
The fiscal board’s chairman delivered a speech during an Associated General Contractors event held in Río Grande.
The Irrigation & Electrical Workers Union (Utier by its Spanish acronym), which comprises about 3,600 employees of the Puerto Rico Electric Power Authority (Prepa), sued the utility, the commonwealth government and the fiscal board on Aug. 7, challenging the constitutionality of the members’ selection process and their determinations, certified fiscal plans and budgets, as well as local legislation, among other matters.
Aurelius Capital, a hedge fund that owns more than $470 million in general obligation bonds, also filed a similar action, alleging the fiscal board’s members were unconstitutionally appointed for not being confirmed by the upper chamber, in violation of the Appointments Clause and the separation of powers.
Carrión, moreover, dismissed claims the fiscal board has violated Promesa in the way it has managed the commonwealth’s fiscal crisis. Some creditors say the board has not respected payment priorities, has approved “faulty” fiscal plans and is acting beyond its purview.
“We are following Promesa according to our own interpretation and the interpretation of our attorneys, whom we consult before making any decisions. We are not acting crazy but doing what we have to do under the parameters as we understand it, provided to us by our lawyers,” the board chairman stressed.
Meanwhile, Carrión recalled that, last month, the board unveiled a series of proposals or “topics to talk about,” including 18 suggestions for amendments to federal laws that could help Puerto Rico’s economy, such as seeking the island’s exclusion from federal air cabotage laws.
“Next week, we plan to shape them, advance the topics of economic development,” he said, in reference to lobbying efforts in Congress to achieve the changes. “We want to help the island,” Carrión added.
When asked about President Donald Trump’s interest in avoiding the use of political capital on issues related to Promesa and the commonwealth’s fiscal crisis, as sources have told Caribbean Business, Carrión said he didn’t know anything about it, adding that “I’m [rooting] for us.”