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Business leaders in Puerto Rico fear snowball effect of government scandals

By on July 18, 2019

CofC, retailers association heads concerned about steps to regaining gov’t trust and picks for key positions

SAN JUAN — The ability to attract investment has been affected by the recent controversy surrounding the administration of Gov. Ricardo Rosselló, the president of the Puerto Rico Chamber of Commerce (CofC), José Ledesma Fuentes, and the president of the United Retailers Association (CUD by its Spanish initials), Jorge Argüelles Morán, said separately. However, both believe it would not be inappropriate for their respective organizations to opine about whether the governor should resign, as has been demanded at repeated demonstrations on the island.

After explaining that they were in no position to judge the governor or any other government official, they stressed that recent events do create “concern” and “consternation,” Argüelles said. “All of the incidents that have occurred, [such as] the arrests at the federal level, etc., create a climate of instability or insecurity, which discourages potential investors and even local business people who are considering expanding their operations” in Puerto Rico.

Both presidents had similar conclusion regarding how business confidence has been tainted following the fraud indictments of former Education Secretary Julia Keleher and former Health Insurance Administration Director Ángela Ávila, along with government contractors. The ensuing concern is that the government may not be operating as transparently as thought, which discourages investment in general and businesses pursuing contracts through the request for proposals (RFP) process.

Puerto Rico Chamber of Commerce President José Ledesma Fuentes (Screen capture of

For Ledesma Fuentes, one of the most important elements to remedy the negative developments is to learn who will fill the vacancies left after officials resigned after leaked messages that laid bare how the governor and his inner circle discussed numerous matters. The CofC’s president expressed being especially concerned about the areas formerly covered by Christian Sobrino, who before resigning this week not only served as the governor’s representative to the island’s financial oversight board but also as executive director as the Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym), as well as Puerto Rico’s chief financial officer  and director of the Office of Management and Budget. 

Although Sobrino is expected to leave all of his positions by the end of the month, Ledesma Fuentes is not as concerned about the timeline as he is about finding the replacement, particularly to represent the government before the fiscal board because, he argued, it requires a particular expertise to handle the island’s debt-restructuring process. He argued that it would be unwise to simply fill the role with a lower-ranking official, which is what was announced. Reportedly, Aafaf’s deputy director will be serving as representative to the board in an interim capacity.

“The worry is not necessarily how long it takes, it’s where are they going to find the people for those positions because the government was actually already working lean, with a person who had like six positions,” the CofC’s president questioned. “They should hire people who really have experience for these positions and who are not aligned to political parties and that would not be part of a campaign strategy…simply chose the people who are most qualified. Ideally, I would like them to be local people because they know what our reality is, but this is something that is going to need very specialized expertise.”

(United Retailers Association President Jorge Argüelles Morán (Screen capture of

Regarding retailers, Argüelles Morán said resolving the issues surrounding the arrests and leaked derogatory language and reprehensible behavior revealed in the leaked messages could take time. While the business sector president argued that the decisions that need to be made are complicated and cannot be expected to be resolved overnight, he cautioned that the longer it takes the scandal to subside, the greater the consequences because the current instability could  “snowball.”

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