Fiscal Board Member Medina Seeks ‘Balance’ in Debt-Restructuring Negotiations
Latest appointment to oversight board tells Caribbean Business he will ensure Puerto Rico’s interests are represented
SAN JUAN — The newest member of Puerto Rico’s Financial Oversight and Management Board (FOMB), former Puerto Rico Industrial Development Co. (Pridco) Executive Director Antonio Medina Comas, said he would look for a “balance” to be struck between the interests of the bondholders and the well-being of the island’s residents, on the path to pulling the commonwealth out of bankruptcy and back into the capital markets.
The White House announced Monday President Trump’s intention to nominate Medina to the FOMB, which was created by the Puerto Rico Oversight, Management and Economic Stability Act (Promesa) four years ago to straighten out the island’s finances and restructure its debt.
“It is important we achieve an agreement with bondholders, protecting the interests of pensioners and protecting the critical institutions of Puerto Rico like education and healthcare systems. We have to strike a balance between all of those priorities,” the 52-year-old entrepreneur said in an exclusive interview with Caribbean Business. “This has to be translated into a balanced budget so that Puerto Rico can return to the markets, because a jurisdiction like Puerto Rico cannot operate without the ability to issue debt. This does not mean you will be issuing debt all of the time, but it is part of the normal operation of a jurisdiction.”
Medina, who said it was a privilege to be selected as a member of the board, assured that he accepted the designation “to offer a balance in oversight board talks, by bringing the point of view of Puerto Ricans to the table.”
“For me, Promesa has an important purpose. It gave Puerto Rico the ability to solve bankruptcy in a more organized way, and with legislation that protects certain interests of Puerto Rico,” he said. “You not only have to look out for the interests of bondholders, but also the interests of the pensioners, of the economy of Puerto Rico, how it is going to be affected, how we will achieve tax collections in the long term to be able to pay the debt.”
Medina declined to pass judgment on the board’s work over the past four years, saying his knowledge of its actions is from the perspective of a private citizen, and has not had background access to the “details of the fiscal panel’s work.” He said that FOMB officials briefed him Wednesday on his duties as a board member.
Washington Experience with Promesa
The former Pridco chief said he participated in lobbying efforts in the U.S. Congress headed by his former boss, then-Gov. Alejandro García Padilla of the Popular Democratic Party, to pass legislation that would afford bankruptcy-like protection for the commonwealth government after it began defaulting on its debt. A commonwealth government bankruptcy law enacted by García Padilla had been struck down by the U.S. Supreme Court in 2015.
Medina said he had established contacts in Washington, D.C., particularly with the House Ways and Means Committee and the Senate Finance Committee, during failed efforts to get Congress to pass Section 245-A tax incentives to attract manufacturers to Puerto Rico. He acknowledged that his economic development agenda took a back seat to administration efforts to stave off a disastrous default of the commonwealth government.
“I had been heading this team that included tax experts from Puerto Rico and Washington. After the default, Alejandro [García Padilla] requested that I help make presentations to credit rating agencies and to bondholders concerning economic development,” the entrepreneur said. “We lobbied to get Promesa.”
After resigning from his post at Pridco in August 2016, Medina created his own business promotion company, Covergent Strategies. He had worked internationally for Merck, the U.S. multinational pharmaceutical company, for 16 years.
Getting Vetted and Selected
Medina is the fourth Trump appointment to the oversight board, and the third in a week. The appointments have renewed the seven-member board since it was designated in 2016. With the three-year terms of the board members expiring last year, FOMB Chairman José B. Carrión and bankers Carlos García and José Ramón González left the fiscal panel over the summer.
Last week, Trump announced his intention to appoint Dr. Betty A. Rosa, who is of Puerto Rican descent, and Utah CPA John E. Nixon as new members of the board. He also reappointed Prof. Andrew Biggs to a new term. The previous appointment was that of public relations expert and bondholder group lobbyist Justin Peterson.
Rosa, who is presumed to have been recommended by Senate Minority Leader Charles Schumer, and Medina would be the only members so far proposed by Democratic leaders and selected by Trump.
It is understood that Peterson was Trump’s pick, while Nixon’s name was provided by House Minority Leader Kevin McCarthy (R-Calif.).
Rosa, who is the interim commissioner of Education and president of the University of the State of New York, replaces member Ana Matosantos. While Nixon, a budget director for the state governments of Utah and Michigan, arrived to fill the vacancy left by the resignation of Puerto Rican banker José Ramón González.
A source in Washington, D.C. told Caribbean Business that Medina was among the people well-connected to the Democratic Party that was “on the list to replace the former Category A member José Carrión.”
Medina told Caribbean Business that he was called in May by U.S. House Speaker Nancy Pelosi’s office to inquire about his availability to become a member of the oversight board. He said he was interviewed by Pelosi’s staff and other congressional offices.
“I understand that I am replacing either José Carrión or Carlos García, because [then-] Speaker [Paul] Ryan chose them,” he said. “I think the comparison with Carrión is made because he lived in Puerto Rico. Promesa has a requisite that there has to be at least one person who is resident of Puerto Rico or have a business in Puerto Rico. I comply with these two requisites because I have my company and I am a resident of Puerto Rico. Carrión has his business and residence in Puerto Rico. He was named by Ryan, a Republican, but since the speaker is now a Democrat, Ryan’s two seats go to Pelosi.”
Medina said that the White House called him in September to notify that his name had been submitted as a candidate.
“They requested certain documents and information. And then they notified me on Tuesday that I was named by the president,” he said. “Now the next step has to do with financial disclosures.”
“I already spoke to [FOMB Executive Director] Natalie Jaresko and she requested that I attend a series of meetings in the next two weeks to fully join the board,” Medina added.
‘New Chapter’ for FOMB
FOMB Chairman David Skeel welcomed Medina’s appointment to the board, stressing in a press release that he “boasts a wealth of experience and knowledge in public service and public policy in Puerto Rico.”
As Pridco chief between 2012 and 2016, Medina “managed the island’s largest real estate portfolio, totaling around 1,500 properties,” according to the FOMB press release, which states that the latest board appointment is founder and president of Convergent Strategies, a consulting firm that focuses on corporate strategy and real estate development, and whose clients include Palmas Del Mar Properties, Inc. and McConnell Valdés, LLC, among others. Before being appointed to Pridco, Medina had spent more than two decades in multiple executive roles, among them as CFO for Merck Brazil and CFO for Merck Central America & Caribbean.
His academic qualifications, according to the press release, include an MBA in Finance from the University of Pennsylvania Wharton School of Business; a Master of Science in Industrial Engineering; and a Bachelor of Science in Industrial Engineering, both from Rensselaer Polytechnic Institute in New York.
“The intention to appoint Mr. Medina to the Oversight Board —alongside the recent appointments of Justin Peterson, John Nixon and Betty Rosa, as well as the reappointment of Andrew Biggs—represents an important new chapter in the FOMB’s mission to help Puerto Rico achieve fiscal responsibility and restructure its debt,” Skeel said.