Former Economic Development Director Appointed to Fiscal Board
SAN JUAN — The White House confirmed Monday evening Caribbean Business reporting in October that Antonio Medina Comas, who served as director of the Puerto Rico Industrial Development Co. (Pridco) during the administration of Gov. Alejandro García Padilla, was on the lists provided to President Donald Trump to fill vacant seats at the Financial Oversight and Management Board.
Trump intends to nominate Medina, who a CB source in Washington, D.C. had said 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 worked for internationally for Merck, the U.S. pharmaceutical company, for 16 years. In 2014, he was appointed by then-Gov. García Padilla as director of Pridco. In 2016, he created his own business promotion company, Covergent Strategies.
The designation comes from the list of candidates proposed by U.S. House Speaker Nancy Pelosi (D-Calif.), as a Group A member, pursuant to the as provided by the Puerto Rico Oversight, Management and Economic Stability (Promesa) Act. Medina comes to fill the position occupied by José Carrión, recommended by the then-Speaker Paul Ryan (R-Wis.).
Last week, Trump announced his intention to appoint Dr. Betty A. Rosa, who is 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.
With these announcements, only the candidate chosen from the list of the Republican minority leader in the House Mitch McConnell and the one from the second list of Pelosi. It is presumed that the speaker has renominated Puerto Rican Judge Arthur González, and Ana Matosantos, cabinet secretary in the office of California Gov. Gavin Newsom.
The current chairman of the fiscal board, David Skeel, admitted in an interview with Caribbean Business, that his name was resubmitted by McConnell for a second term. However, sources assure that people close to Puerto Rico bondholders and Trump do not favor the appointment.
Published in the Oct. 22, 2020, issue of Caribbean Business:
Promesa Sweepstakes Enters Stretch Run
Democratic Leaders Submit Lists of Designees for Presidential Approval
By Philipe Schoene Roura and José Alvarado Vega
The battle for the final composition of Puerto Rico’s Financial Oversight and Management Board (FOMB) is taking shape in Washington, as Democratic leaders on Capitol Hill have submitted the list of nominees to fill out Oboard vacancies, according to a Capitol Hill source.
The ball is now in President Trump’s court to decide whether he will select from those lists in overhauling the entity created by Promesa to restructure the commonwealth’s $120 billion debt.
As this newspaper was going to press, House Speaker Nancy Pelosi and Senate Minority Leader Mitch McConnell had both submitted names of nominees to serve on the board created by the Puerto Rico Oversight, Management and Economic Stability Act (Promesa).
The federal law passed in 2016 to provide bankruptcy-like proceedings to allow Puerto Rico to restructure its towering debt load under Title III came with the sidecar of austerity in the shape of a seven member board to control the island’s financial affairs.
The terms of six members have expired. Only DCI Group Managing Partner Justin Peterson, named by Trump to replace Judge Art González, is serving a new term. The judge is presumed to have been the Category F member selected by former President Barack Obama. The presumption rests on anecdotal accounts by insiders participating in the selection of original members as commission papers certifying their nominations have yet to be made public.
“I know that Pelosi and Schumer have both submitted their lists, but I do not know how seriously the White House is going to take all of the names,” said one Capitol Hill source with knowledge of the process, who chose to remain nameless as a matter of protocol. “I know that [Nobel laureate] economist Joseph Stiglitz is on one of the lists, but I do not think that is going to happen for him. I know that [board member Ana] Matosantos is on two of the lists. Remember, there are three lists.”
Promesa stipulates that the House Speaker submits two lists for the selection of the Category A member and the Category B member, which were selected by then-House Speaker Paul Ryan in 2016.
“The only lists that Matosantos can be on are one of Speaker Pelosi’s lists or on the list of Senate Minority Leader Chuck Schumer. It is interesting Judge González is also on one of those lists. He had been lobbying to stay on the board.”
In reporting by this journal in 2018, two separate sources signaled out González as the intellectual architect of a movement by the FOMB to allow the administration of former Gov. Ricardo Rosselló to use the Central Office of Recovery, Reconstruction and Resiliency (COR3) to manage the $45 billion in Federal Emergency Management Agency (FEMA) funds earmarked for critical infrastructure projects in the aftermath of Hurricane Maria, rather than using Title V in Promesa. At the time, two sources confirmed that the Title V throttling was done as a quid pro quo in exchange for an agreement to steadfastly adhere—without political gamesmanship—to the austerity measures being dictated by the FOMB.
“I have a theory as to why José Ramón González was saying that he was the Category F member selected by former President Obama,” the Capitol Hill source continued. “He was hoping that by resigning when he did, that the White House would not have taken the action [to select Peterson] that they did in taking Judge González out. I think that some of the current members believe that Judge González was useful and helpful because of his knowledge of bankruptcy law. I disagree with that.”
The source said that there are names on the list that are extremely well connected to the Democratic machine in the United States.
“So that is going to be interesting to see,” the source said. “Among the names on the list are former Pridco [Puerto Rico Industrial Development Co.] Executive Director Antonio Medina Comas [under the administration of former Gov. Alejandro García Padilla]. Medina is reportedly on the list to replace the former Category A member José Carrión.”
The source said that island-born entrepreneur Miguel Estién is also on the list. Estién is married to Erin Pelton, who was a former diplomat and Obama administration spokesperson. Both Estién and Pelton founded the Puerto Rico Live platform last year, which features on-stage speaking events involving influential names in policy-making, media, business, arts and technology. Estién also founded the Guava social media platform and worked for 20 years in finance and corporate business development at GE Capital in the United States, Mexico, Japan and Hungary, according to his LinkedIn account.
At this writing, the names of Andrew Biggs and David Skeel were reported to have been included on the list submitted by McConnell. That these names have not been confirmed by Trump has raised concern among some lobbyists who are close to the process because it raises the possibility that the creditor camp might have established a foothold in the Promesa selection sweepstakes.
The commonwealth’s creditors included in the plan support agreement (PSA) finalized in February to settle some $35 billion in debt contained in the plan of adjustment (POA) are pressuring the board to stick with the deal and seek a court confirmation no later than June.
The Ad Hoc Group of Constitutional Debtholders, Ad Hoc Group of General Obligation Bondholders, the Lawful Constitutional Debt Coalition (LCDC), and QTCB Noteholder Group filed a motion earlier this month before U.S. District Court Judge Laura Taylor Swain, who is overseeing Promesa debt-restructuring issues, in which the self-denominated PSA creditors argue that the board is delaying the debt plan confirmation process, while adding that the court needs to set deadlines similar to those in the process that led to the restructuring of the Puerto Rico Sales Tax Financing Corp. (Cofina by its Spanish acronym).
The FOMB has argued that the Covid-19 pandemic crisis has forced the review of elements in the PSA, given that the impacted economy will lead to lower revenues.
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