Tuesday, April 24, 2018

Puerto Rico House introduces measure requiring information on debt negotiations

By on April 13, 2018

SAN JUAN – After assuring that the executive director of the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish initials) scants the issue, island House Speaker Carlos Méndez and Rep. José Enrique Meléndez have introduced a resolution that seeks a report on the debt-negotiation agreements reached.

Resolution 868 gives director Gerardo Portela five days to deliver a comprehensive report detailing all the agreements obtained so far and all the concrete steps taken by Aafaf to reach extrajudicial settlement agreements with bondholders, in accordance with the provisions contained in Title VI of the federal Promesa law.

Portela has been reluctant to provide the information and has clashed with the lower legislative chamber on the matter, according to the resolution dated April 9.

“Regrettably, we have to affirm that the Fiscal Agency and Financial Advisory Authority of Puerto Rico, and especially its executive director, Gerardo J. Portela Franco, has been sparing with respect to the efforts they carry out, in accordance with the functions that they were conferred.

Gerardo Portela, the executive director of the Puerto Rico Fiscal Agency and Financial Advisory Authority  (Juan J. Rodríguez/CB)

“In fact, it is known to all, that the House of Representatives has already had confrontations with this public corporation, due to the handling of the funds it has been assigned to carry out their responsibilities and for an apparent lack of transparency with which they operate, keeping a large part of the population alienated from what they do,” the resolution reads.

Aafaf is the entity in charge of renegotiating and reaching debt agreements with the island’s different creditors and helping with the debt plans. Under Promesa, before asking the federal court to adjust the debt of an entity under the law’s Title III, the government must have made reasonable efforts to reach debt-restructuring agreements with creditors under Title VI.

In its resolution, the legislature says that by having information about the negotiations, alternatives for achieving a viable consensus could be identified to help Puerto Rico pull itself out of its economic and fiscal quagmire.

“There can be no true citizen oversight of public administration when knowledge of what is being done or what is intended is lacking,” the resolution says while citing legal cases over access to public information.

The fiscal agency opposed the resolution, and a source from the entity told Caribbean Business that the reluctance to provide information is due to existing confidentiality agreements and that making it public could affect the negotiations.

However, Aafaf denied it was reluctant to provide information, adding that it had recently met several times with Méndez and Meléndez.

“The AAFAF has maintained direct communication with the members of the Legislature and has shared information related to debt restructuring, government reorganization and other fiscal aspects,” the entity said.

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