Bond insurer MBIA sues Wall Street banks for ‘misconduct’ as Puerto Rico debt underwriters

(By Roberto Júnior)

Among those sued are UBS, Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, Merrill Lynch and Santander 

SAN JUAN – National Public Finance Guarantee Corp. and MBIA Insurance Corp. filed suit in the Court of First Instance, Superior Court of San Juan, Puerto Rico, against eight Wall Street banks, seeking to hold them accountable for what the bond insurers called “inequitable conduct” in Puerto Rico’s municipal bond market that contributed to the island’s “economic collapse.”

The insurers said they have been presented with, “and fully honored, over a billion dollars in claims after the municipal debt underwritten by the banks became unsustainable on their terms for the Commonwealth and its agencies and they defaulted on their obligations.” 

The lawsuit names as defendants UBS Financial Services Inc.; UBS Securities LLC; Citigroup Global Markets Inc.; Goldman Sachs & Co. LLC; J.P. Morgan Securities LLC; Morgan Stanley & Co. LLC; Merrill Lynch, Pierce, Fenner & Smith Inc.; RBC Capital Markets LLC; and Santander Securities LLC.

MBIA and National argue that the banks underwrote bonds issued by the island government, the Puerto Rico Electric Power Authority, the Puerto Rico Highways and Transportation Authority, and the Puerto Rico Sales Tax Financing Corp. The complaint alleges that, for more than a decade, the banks “urged Puerto Rico and its agencies to issue massive amounts of this debt, allowing the banks to profit from underwriting and selling the bonds, as well as from related interest rate swap, refinancing and other transactions. In their capacity as underwriters, the banks had a fundamental ‘gatekeeper’ responsibility that assured the markets that these municipal bonds could be repaid,” a release issued Thursday reads. 

However, the insurer’s added, “as shown by a Special Investigation Report prepared for Puerto Rico’s Financial Oversight and Management Board, the banks did not conduct appropriate due diligence, resulting in key disclosures being materially false or misleading. These diligence failures concealed essential facts that would have demonstrated that the debt was not sustainable and could not be repaid in accordance with its terms.” 

The plaintiffs stressed that the debt “forced the Commonwealth from the municipal markets, leaving it and its public institutions—like power utilities, hospitals, schools, and essential infrastructure on which millions of Puerto Ricans rely—in financial distress,” adding that bond insurers “have paid billions of dollars in claims payments,” while uninsured municipal bond investors, “including many Puerto Ricans, have suffered” substatntial losses. 

The complaint is based upon two equitable doctrines of Puerto Rican law—”doctrina de actos propios,” or unilateral acts, and “declaración unilateral de la voluntad,” or unilateral declaration of will. 

“Defendants through their acts assured National that they were conducting reasonable investigations regarding the terms of the bonds that National insured, and National relied on those acts in issuing its insurance. But Defendants frustrated National’s legitimate, good faith expectations by choosing not to conduct those investigations and utterly failing to ensure that they had confirmed the truthfulness and completeness of the integral materials in the insurance applications….These extraordinary circumstances warrant application of ‘doctrina de actos propios’ and/or the unilateral declaration of will,” Federico Hernández Denton, former Puerto Rico chief justice and counsel for National, said about the complaint’s allegation.  

As the bonds defaulted, National “has paid every cent of every claim on its policies— over a billion dollars—to cover the losses of insured investors,” the insurer said. 

“Just like the Commonwealth, and the people of Puerto Rico, National was misled by the underwriters of the Commonwealth’s bonds,” said Bill Fallon, CEO of MBIA Inc., the parent company of the plaintiffs. 

National “insured its first Puerto Rico government bond more than 30 years ago and to date has insured more than $15.7 billion of debt for Puerto Rico issuers,” Fallon added. “Our insurance has helped Puerto Rico raise the money to build schools and hospitals and other vital public services. We’re proud of that. The future of Puerto Rico and the integrity and transparency of the capital markets demand that the underwriters be held accountable.” 

Philippe Selendy, a founding partner of Selendy & Gay and former lead counsel for the Federal Housing Finance Agency in its RMBS litigations, is National’s counsel. 

Access the translated complaint here

Puerto Rico Supreme Court rules Pierluisi’s swearing-in as governor unconstitutional

Justice Secretary Wanda Vázquez to be sworn in

By José Alvarado and Limarys Suárez Torres

SAN JUAN — The Puerto Rico Supreme Court gave Gov. Pedro Pierluisi until 5 p.m. Wednesday to abandon the La Fortaleza governor’s mansion after the island’s highest court ruled his swearing-in Friday was unconstitutional.

In a unanimous decision that was made public at 1 p.m., the court declared unconstitutional the 2005 amendment to Act 7 of 1952, allowing a secretary of state appointed during a legislative recess to become governor without the need to be confirmed by both chambers of the commonwealth’s Legislature.

The ruling states that Pierluisi has until 5 p.m. to file a reconsideration of the ruling.

The court’s action opens the way for Justice Secretary Wanda Vázquez to become the next governor, given that she is next in the line of succession as established by the commonwealth’s Constitution.

“I will abide by said determination to comply with the succession order established by the Constitution of the Commonwealth of Puerto Rico in Article IV, Section 7, and Act No. 7 of July 24, 1952, as amended, known as the ‘Law to Provide the Order of Succession and Substitution for the Office of Governor,’ Vázquez said in a statement released shortly after the Judicial Branch Press Office released the court’s ruling.

Pierluisi, who had been appointed as secretary of State by former Gov. Ricardo Rosselló, took over the governor’s office Friday at 5:01 p.m. based on that amendment, even though he had only been confirmed as secretary of State by the House of Representatives the same day.

The Senate planned to consider his confirmation as secretary of state Monday, but canceled the vote after Pierluisi declined to testify. Senate President Thomas Rivera Schatz proceeded to file a lawsuit challenging Pierluisi’s claim to the governorship in San Juan Superior Court. The island’s highest court immediately took up the case given its constitutional importance.

After swearing-in Aug. 2, Pierluisi pledged to resign if the Senate voted against his confirmation. The Senate ended its special session Monday without a vote after Rivera Schatz said Pierluisi had only five of the 15 votes needed to be confirmed.

Understanding that the Senate did not consider his confirmation, Pierluisi conditioned his exit from La Fortaleza on a ruling from the Supreme Court.

“The Supreme Court of Puerto Rico issued an opinion today in the case of the Senate of Puerto Rico v. Hon. Pedro Pierluisi, in which it unanimously determined as unconstitutional the clause that added Act No. 7-2005 to article 1 of Act No. 7 of July 24, 1952, that allows a Secretary of State to become Governor without having to be confirmed by both legislative chambers,” states the ruling issued by Associate Justice Rafael L. Martínez Torres, and with which the other eight high court justices concurred.

The Senate leader quickly reacted to the ruling with his characteristic bluntness.

“Unanimous, 9-0. With absolute legitimacy we will seek true peace and stability,” Rivera Schatz said. “Now it’s when this is truly over and that detestable group from the chat that lied, mocked, contrived, conspired, violated the law and betrayed Puerto Rico will leave the government.”

Rivera Schatz, who is the ruling New Progressive Party’ acting president, added that “now we will continue the work agenda towards a better Puerto Rico with [Resident Commissioner] Jenniffer González Colón and all of the leadership of the New Progressive Party.”

González Colón reportedly is the consensus candidate for governor agreed upon between Schatz and House Speaker Carlos Johnny Méndez. The deal purportedly calls for Vázquez to nominate the resident commissioner as secretary of State. Both legislative chambers would confirm her, and then the Justice chief would resign.

The resident commissioner, who is the NPP’s vice president, praised the court ruling, saying, the “sense of stability cannot be restored, nor can credibility be restored at the expense of institutionally.”

“It is important to restore credibility in Washington by showing that we are able to govern ourselves according to our own Constitution,” she said.

Puerto Rico Becomes Early Primary State


Departing gov enacts law to hold Democratic primary in March

SAN JUAN – Puerto Rico Gov. Ricardo Rosselló, who said he would resign Friday at 5 p.m., has enacted Senate Bill 1323, to move the date of the Democratic presidential primary held on the island from the first Sunday in June to the last Sunday in March.

“This law intends to bring national attention to Puerto Rico, especially in the upcoming Democratic primaries. Currently, the primary is to be held in June, which reduces the impact we may have. By making Puerto Rico an early-voting state, candidates will be forced to pay attention to our needs,” Rosselló said.

The Republican primaries will continue to be held on the last Sunday in February.

Rosselló stressed that by changing the date of the presidential primary, Puerto Rico “becomes more relevant” as each party elects its presidential nominee.

“This legislative measure provides the opportunity to put Puerto Rico on the radar of potential presidential candidates in the Democratic Party. The candidates will not only pay attention to Puerto Rico but will have to clearly stipulate their positions regarding the issues that affect the island,” Rosselló added.

Departing gov appoints new Puerto Rico Federal Affairs director

As well appointments at Invest Puerto Rico and Science, Technology & Research Trust board

SAN JUAN – Departing Puerto Rico Gov. Ricardo Rosselló appointed Thursday Jennifer M. Storipan, Esq., as the new executive director of the Puerto Rico Federal Affairs Administration (PRFAA) in Washington, D.C., and James “Bo” Collins as a member of the Invest Puerto Rico board.

Storipan currently serves as PRFAA’s director of Government Affairs. In this role, she spearheads the implementation of Puerto Rico’s public policy in Washington, D.C.

Before working at PRFAA, Storipan worked for Congresswoman Joyce Beatty as a legal and legislative adviser. She also worked for Lowenstein Sandler LLP, and is licensed to practice law in New Jersey, New York and the District of Columbia. She earned her bachelor’s degree from the University of Maryland and studied law at Ohio State University.

“I thank Governor Rosselló for entrusting me with the task of leading the government’s public policy efforts as Executive Director of the Puerto Rico Federal Affairs Administration. I will continue to work tirelessly so that Puerto Rico continues to be a priority in Washington, DC,” Storipan said in the issued press release.

In 2000, Collins served as senior vice president of El Paso Merchant Energy, “where she worked on natural gas and led the sales team to achieve over one billion dollars in yearly income,” the governor’s office said, adding that, recently, Collins presided Mercantile Global Holdings in Puerto Rico, the first international bank focused on digital assets, as described in the release.

“I am proud to have the Governor’s support in this new endeavor. I recognize Puerto Rico’s economic potential and I will work to achieve the administration’s public policy to make it known to the international markets that Puerto Rico is ready and open for business,” Collins said.

Rosselló also made the following appointments to the Puerto Rico Science, Technology and Research Trust’s board: Dr. Dara P. Schuster, Alicia Syrett, and Prof. Ubaldo M. Córdoba-Figueroa.

“I am convinced the new appointees will continue leading the government’s agenda in Washington, DC and in Puerto Rico. These professionals have been successful in their careers and will be instrumental in the future economic success of Puerto Rico,” Rosselló said.

Puerto Rico Justice secretary assures she would assume governorship

Vázquez says she would accept her constitutional responsibility

SAN JUAN – The secretary of the Puerto Rico Department of Justice, Wanda Vázquez Garced, said Thursday she would not resign were the legislature not to confirm Pedro Pierluisi as secretary of State and replace Ricardo Rosselló as governor when he leaves office Friday.

“We are attentive to the process the Legislature has underway in relation to the evaluation of the designated Secretary of State. We will continue to perform our function. My resignation is not contemplated,” tweeted.

She also maintained her position that, if developments lead to the role of governor falling upon her, she would be sworn in.

“If the time comes, we will assume the responsibility imposed by the Constitution and the Law,” the Justice secretary said.

Her remarks came minutes before it became known that the confirmation process by the Senate would continue Monday at 11 a.m. when a “Total Commission” was convened.

Pierluisi was sworn in Wednesday as secretary of State.

However, in the House of Representatives, the public hearings will continue Friday at 9 a.m. A secretary of State nomination must be confirmed by both legislative chambers.

Last week, after learning about Rosselló’s resignation, Vázquez said she did not want to become governor.

Rosselló sent his resignation letter to the legislature following massive demonstrations calling for him to step down ensued after the former Education secretary and Health Insurance administrator were arrested for alleged corruption and private conversations with his inner circle were leaked the same week.

—CyberNews contributed to this report.

Puerto Rico official says drafting of Opportunity Zones regs underway

Economic Development Secretary Manuel Laboy (Jaime Rivera/CB)

List of priority projects will be available this month

SAN JUAN – Puerto Rico Economic Development Secretary Manuel Laboy Rivera said Wednesday that the development of Opportunity Zones of Puerto Rico will continue.

“We cannot stop our work plan, despite the changes that arise within the political processes we face. We recognize the economic importance of this law for the development of multiple projects related to the Opportunities Zones, which are estimated to generate over $600 million in investments. To give continuity to these projects, the process of drafting the regulation that will establish the rules for the selection and execution of the various initiatives has begun, which will allow us to demonstrate the competitiveness of Puerto Rico,” Laboy Rivera said in a press release.

The secretary belongs to the Committee of Priority Projects in Opportunity Zones, as provided by Act 21 of 2019, along with the executive director of the Central Office of Recovery, Reconstruction and Resiliency, Omar Marrero, and a representative from the House of Representatives and another from the Senate.

“The approval of the application to present the various projects to be developed in the areas designated as opportunity zones is already in the final phase. This document will be available in the coming weeks through the digital platform Single Business Portal and it will be processed by the DDEC Incentives Office, as established in Act 60 of 2019, known as the Puerto Rico Incentives Code,” Laboy added.

For his part, Marrero said that “this effort continues and we will continue to work hand in hand with the Federal Treasury Department to ensure that this is the case. Likewise, I would not pass up the opportunity to thank the federal government for its trust and support in these efforts.”

Laboy also said that as part of the work of said committee, an inventory of priority projects is being developed for the 98 percent of the island that was designated as an Opportunity Zone.

“This inventory should be ready by the end of August, once the new members that will fill the two available and needed vacancies are appointed to establish the quorum required to make decisions,” said Laboy, who also serves as executive director of the Puerto Rico Industrial Development Co.

To request more information about the process or submit recommendations on priority projects to consider, write to

Departing Puerto Rico governor makes several appointments

Omar Marrero, director of the Puerto Rico Public-Private Partnerships Authority and the Central Office for Recovery, Reconstruction & Resiliency (CB/Rafelli González Cotto)

Taps Marrero as CFO and fiscal agency director, and Chávez for COR3

SAN JUAN — Gov. Ricardo Rosselló, who is resigning Friday, appointed Omar J. Marrero as executive director of the Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym) and chief financial officer of the Government of Puerto Rico; and recommended Ottmar Chávez to serves as the executive director of the Central Office of Recovery, Reconstruction and Resilience (COR3).

He also recommended Fermín E. Fontanés as executive director of the Public-Private Partnerships Authority (PPA); Noelia García Bardales as executive director of the Convention District Authority; and Margarita Nolasco as executive director of the Automobile Accident Compensation Administration (ACAA by its Spanish acronym).

The governor also recommended Erik Rolón as executive director of the Housing Financing Authority. Ottmar Chávez will remain as the administrator of the General Services Administration (ASG).

In all these appointments, except that of Aafaf’s executive director, the governor recommended to the boards of the corresponding entities to approve his recommendation.

“I announce these new appointments with the assurance that the officials will carry out their duty in a capable and responsible manner. All have vast experience working in the Government and their commitment to the Island is demonstrated in accepting these positions that allow us to continue executing our administration’s agenda,” the Rosselló said.

The governor’s office, La Fortaleza, gave the following short bios for the officials:

“Omar Marrero holds a Bachelor of Science in Business Administration from the University of Dayton in Ohio, a juris doctor from the Law School of the Inter-American University of Puerto Rico and a Master’s degree in Law from the Law School of the University of New York.

“Marrero served as executive director of several agencies in the Government of Puerto Rico, which include COR3, the PPPA, the Convention District Authority and the Port Authority. He has also served as secretary of the Department of Consumer Affairs.

“On the other hand, Ottmar Chávez – who since January 2019 has worked as the main purchasing officer for COR3 – earned a bachelor’s degree in International Administration from Assumption College in Massachusetts and a master’s degree in Project Management and Supply Chain from George Washington University.

“Chávez has served as supply chain director, as director of programs and portfolios, and as a global purchasing leader.

“Meanwhile, Fermín E. Fontanés has a Bachelor of Science, Environmental Policy and Planning, from the University of Michigan and a juris doctor from the George Washington University School of Law.

“Fontanés has been a legal adviser to the PPPA since March 2018 and has handled aspects of the Electric Power Authority transaction under the Law to Transform the Puerto Rico Electric System.

“His experience has been focused on corporate transactions, regulatory compliance, permits and environmental litigation. He has provided consulting at all stages of a project, from the review of procedures and site selection, to the review of environmental impacts and permits.

“Furthermore, Noelia García Bardales holds a bachelor’s degree in Business Administration from the Río Piedras Campus of the University of Puerto Rico and postgraduate studies in International Business Administration from the Polytechnic University of Puerto Rico.

“García Bardales – who was serving as deputy director of the Convention Center District Authority until yesterday [Tuesday] – has over 20 years of experience in public policy implementation.

“Among her work experience, her municipal integration consulting for the 911 Emergency System stands out, as well as her work as an independent consultant for the municipality of Corozal and for the Bona Fide Union of Municipal Employees.

“García Bardales also served as executive director of the Committee on Health and Women’s Affairs of the Senate of Puerto Rico.

“Finally, Margarita Nolasco has a bachelor’s degree in Secondary Education in Mathematics from the Catholic University of Puerto Rico, a master’s degree in Education from the State University of New York and a doctorate in Education from Inter-American University of Puerto Rico.

“Nolasco’s experience in the Senate began in 2005, where she has been appointed majority leader and vice president of the body. Nolasco also served as mayor of the municipality of Coamo from 1997 to 2000.”

Puerto Rico’s Muñoz Marin Airport granted $1.5 million to rehabilitate a runway

An aerial view of Luis Muñoz Marín International Airport (Screen capture of

FAA announces $478 million in Airport Improvement Program funding across the U.S.

SAN JUAN – U.S. Transportation Secretary Elaine Chao announced Wednesday that the Federal Aviation Administration (FAA) will award $478 million in airport infrastructure grants, the fourth allotment of the total $3.18 billion in Airport Improvement Program (AIP) funding for airports across the United States.  

The FAA will award grants to 232 airports in 43 states, including American Samoa, Northern Mariana Islands and Puerto Rico, which was awarded $1.5 million to rehabilitate a runway at Luis Muñoz Marín International Airport in Carolina

The other selected projects also include runway reconstruction and rehabilitation, construction of firefighting facilities, and the maintenance of taxiways, aprons, and terminals. The construction and equipment supported by these grants are to enhance safety and capacity “while promoting economic growth in the regions served by each airport,” according to the announcing release.

“This significant investment in airport improvements in Puerto Rico will fund construction and rehabilitation projects that will help maintain high levels of safety in U.S. aviation,” Chao said.

Airport infrastructure in the United States, with 3,332 airports and 5,000 paved runways, “supports our economic competitiveness and improves quality of life,” the FAA said, adding that according to its most recent economic analysis, U.S. civil aviation accounts for $1.6 trillion in economic activity and supports nearly 11 million jobs. 

Airports can receive a certain amount of AIP entitlement funding each year based on activity levels and project needs.  If their capital project needs exceed their available entitlement funds, the FAA can supplement their entitlements with discretionary funding, the release explains.

Appointment of Puerto Rico secretary of State in doubt

04/29/2016 Pedro Pierluisi durante el Primer Foro de Ideas Area Este en el Centro de Bellas Artes de Humacao. Foto por Ingrid Torres

Senate president says Pedro Pierluisi would not have his chamber’s endorsement

By Yanira Hernández Cabiya and María Miranda

SAN JUAN — Gov. Ricardo Rosselló was considering Tuesday evening naming former Resident Commissioner Pedro Pierluisi as secretary of State and send his pick to the legislature for its advice and consent so that, if confirmed, the former resident commissioner can succeed him when Rosselló officially steps down Friday at 5 p.m., sources with knowledge of the strategy say.

However, as soon as he became aware of the move, Senate President Thomas Rivera Schatz said Pierluisi’s designation would not have his chamber’s endorsement.

For his part, House Speaker Carlos “Johnny” Méndez, in an unusual move, scheduled a special session to address the appointment Friday at 1 p.m.

“The call is a precautionary measure for Friday, in case the governor withdraws his resignation or a secretary of State designation is announced,” House Vice President Javier Rodríguez Aguiló told Caribbean Business.

Political science Prof. Ángel Rosa, who is a former Popular Democratic Party (PDP) senator, explained that “the legislative chambers cannot call themselves to an extraordinary session to address legislative matters. That can only be done by the governor. The chambers must wait for this to issue the call to notify its members.”

The governor’s press office confirmed to Caribbean Business that it had not given such a call to the legislature, nor such an announcement was planned.

Rivera Schatz opposes Pierluisi because of his work as a lawyer for the island’s Financial Oversight and Management Board. Pierluisi, who served as Puerto Rico’s resident commissioner in Washington, D.C., for eight years, works for the law firm O’Neill and Borges, legal advisers to the board.

According to O’Neill & Borges, where Pierluisi practices, he was on leave of absence as of Tuesday, July 30.

“Note: Attorney Pedro R. Pierluisi is on a leave of absence from the firm as of July 30, 2019,” the firm’s website reads.

Confirmation by both the House and Senate would be needed. Twenty-six representatives and 16 senators would have to vote in favor of the appointment.

However, also Tuesday, Rep. Abid Quiñones tweeted: “Appointing an ally of the Fiscal Oversight Board, @pedropierluisi, disrespects the Puerto Rican people. We will vote against it, I assure you.”

For his part, NPP Sen. Nelson Cruz also said in an interview with Radio Isla that Rivera Schatz would “block” Pierluisi’s appointment. 

According to Wapa TV Channel 4, Rosselló may appoint Senate President Thomas Rivera Schatz instead. New Progressive Party (NPP) Sen. Miguel Romero said he supports his chamber’s leader for the position.

The governor was expected to announce the appointment via a statement, rather than a press conference. 

Pierluisi and Gov. Ricardo Rosselló in 2016 (CB file)

On Wednesday, Rosselló announced he would step down after a little more than two years in charge amid massive protests demanding his resignation, and two legal reports stating that there was sufficient grounds to begin his impeachment after messages of a chat group he had with members of his staff and advisers were leaked. The group engaged in defamatory remarks and political machinations were laid bare.

The governor lost the support of his political party, with several officials resigning. For nearly two weeks, people held demonstrations across the island—especially close to the governor’s La Fortaleza mansion, which was turned into a military stronghold—in protest, demanding his resignation.

The leaked messages exposed an already embattled administration, leading to further attacks from President Donald Trump. 

“You have totally grossly incompetent leadership at the top of Puerto Rico,” Trump told reporters at the White House last week. “The leadership is corrupt and incompetent.” 

Justice Secretary Wanda Vázquez Garced was next in line to succeed Rosselló as governor as the secretary of State post was left vacant by Luis Rivera Marín, who also took part in the chat group and resigned after the messages were published.

However, on Sunday, Vázquez Garced said she didn’t want to be governor and hoped Rosselló would appoint a secretary of State before Friday.

Pierluisi began his professional career in Washington, D.C., where he practiced law. After serving as Puerto Rico Justice secretary (1993-1996), he became a partner in the litigation department of O’Neill & Borges.

Pierluisi served as resident commissioner under the administration of former Gov. Luis Fortuño (2008) and was re-elected during the administration of former Gov. Alejandro García Padilla (2012), despite belonging to opposing parties.

After his bid to run for governor, he rejoined O’Neill & Borges on Jan. 9, 2017. His practice focuses on corporate, litigation and government & regulatory affairs.

Regarding the Puerto Rico Oversight, Management and Economic Stabilization Act (Promesa), which established the island’s fiscal board, Pierluisi had said in 2016 he would support the legislation if it met two principal requisites.

“First of all, the bill has to authorize a just and orderly debt restructuring process, because the alternative is a chaotic process of non-payments followed by litigation that will harm Puerto Rico, government pensioners and the bondholders, many of which are residents on the island,” Pierluisi said.

“Any objective observer, including practically all editorial boards—be they conservative, moderate and liberal from the main news outlets in the United States—understand that the government of Puerto Rico has to restructure its debts,” he added. “This would ideally [be carried out] through voluntary agreements with creditors, but with access to a process supervised by the federal court in case there are difficulties in the voluntary accords. It is sad we have had to reach this point, but it is the current reality.”

Second, Pierluisi said that it was inevitable that any federal legislation that granted Puerto Rico the faculty to restructure its debt also establish a temporary and independent supervising board to assist the commonwealth government to better manage its public finances, balance its budget, be more efficient and transparent, and regain access to financial markets.

“My requirement from day one has been that the board has to have teeth, but not fangs,” he indicated. “In other words, that it has the authority to supervise but not to order and control the government of Puerto Rico during a limited time period. I have worked with the U.S. House Speaker, Paul Ryan, and the House Natural Resources Committee Chair, Rob Bishop, to ensure that the proposal takes into consideration these conditions.”

On Tuesday, Resident Commissioner Jenniffer González called on Rosselló to appoint a secretary of State “as soon as possible” to “give direction, stability and credibility” to the island.

“I have not been asked, nor consulted anything about that succession. In light of the events of the past 3 weeks, I remain focused and continue to be the face and work in Congress and with the federal agencies, while remaining aware of what is happening in my Island.”

Puerto Rico lawmakers threaten legal action if gov names successor without consent

Senate Minority Leader Eduardo Bhatia (CB file)

Suggest parties unite ‘to protect’ the island’s stability

SAN JUAN — The leaders of the Popular Democratic Party (PDP) minority in the Senate and House, Eduardo Bhatia and Rafael “Tatito” Hernández, respectively, along with Rep. Luis Vega Ramos, said Tuesday that if Gov. Ricardo Rosselló’s “intention” is to swear in his successor without the legislature’s confirmation, the party will challenge the process in court.

“Rosselló’s inaction regarding his constitutional duty to fill the [secretary of State] vacancy, has kept the people anxious in facing the future in a state of total uncertainty. The lack of a clear and defined course of action by the Governor results in countless probable scenarios, one of which is to appoint a Secretary of State just before the effective date and time of the resignation of Rosselló this Friday at 5:00 p.m., so that the Legislative Assembly (House and Senate) cannot exercise the constitutional prerogative of advice and consent before that nominee becomes governor,” their joint press release reads.

The lawmakers specified that Act 7 of May 2, 2005, amended Act 7 of July 24, 1952, to require that any secretary who fills a vacancy in the office of the governor must be duly confirmed, except for the secretary of State.

“Our lawyers, as well as recognized jurists of the Country, concur that this provision is flagrantly unconstitutional because it is incompatible with the principle of the separation of powers,” they said, adding that the legislature “cannot be deprived of its constitutional duty to ratify any appointment to Secretary of State, which clearly emanates from Section 5 of Article IV of our Constitution, not to mention that a Secretary of State cannot remain in that position without being confirmed, much less take over until the end” of the four-year term.

The lawmakers assured they would be willing to take the matter to court were the governor to “irresponsibly” put “us in this situation.”
They urged the leadership of the majority New Progressive Party (NPP) “to avoid a constitutional crisis.”

If the NPP’s leaders are not fully confident that the governor “will honor his constitutional duty to send any State Department appointment for legislative advice and consent,” the lawmakers said, “we must unite immediately” and adopt a legal approach “to protect the stability of the country on behalf of the entire Legislative Power.”