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Government reiterates opposition to debt audit committee

By on April 8, 2017

SAN JUAN — Gov. Ricardo Rosselló said Friday that “all alternatives” are being studied in response to a court decision that ordered the return of several members of the Integral Debt Audit Commission, who were dismissed at the end of January.

The governor reiterated his opposition to the body created by Act 97 of 2016 and tasked with auditing the debt that the government has issued during the past 44 years. The commission has remained inoperative during the first three months of the Rosselló administration, while it had weak support from La Fortaleza under former Gov. Alejandro García Padilla.

“Our position remains that it is the court who determines if the debt is illegal or legal,” said Rosselló during a press conference in Cataño.

Gov. Ricardo Rosselló (Juan J. Rodríguez/CB)

On Thursday, Judge Lauracelis Roques Arroyo decided in favor of labor union leader Roberto Pagán, economist José Alameda and business professor José González Taboada, who presented an injunction at the San Juan Court of First Instance in late February to reverse the governor’s decision to dismiss them from the commission.

For Rosselló, the findings that the body could make on the legality of debt will depend of what a court decides. He explained that if the commission declares any debt as illegal, affected creditors will take actions that would leave in the hands of a court the last say on the legality of said debt.

“In a fiscal situation like the one we are in, why are we going to invest millions of dollars in something that is not going to have a result,” added the governor while justifying his opposition to the debt audit commission.

Stressing the Importance of the Commission

While Rosselló understands that an audit by the commission would be a waste of public funds in times of fiscal tightness, attorney Armando Santiago Pintado recalled that Act 97 also empowers the commission for other tasks such as submitting a report with recommendations on changes to banking and investment laws.

“[The] deference to the banking sector in the legislative process is what has allowed a total deregulation in Puerto Rico in that industry. To pose a way to prevent this from happening in the future is to consider a major reform -one that the United States has not wanted to do for the banks that they regulate- to force Puerto Rican banks to conform to standards that we design to avoid this type of situation,” explained Santiago Pintado, referring to the opportunity that the commission would have to draft this type of legislation.

During a conversation this week about the debt audit in front of the gates of the University of Puerto Rico at Río Piedras, the lawyer emphasized that the commission “is required by law to audit all debt issued from 1972 to the present and that could be achieved for less than $ 6 million.”

Santiago Pintado explained during the activity that before being left inoperative, the commission -at a cost of $100,000 and over a period of three months- sought to audit four government debt issues on four different flanks: financial statements; compliance with laws and regulations; performance and benefits; and a forensic audit that would identify any unlawful act in the process.

Moreover, to questions about the objectives that are pursued with a debt audit, the spokeswoman of the Citizens’ Front for a Debt Audit, lawyer Eva Prados, emphasized that the Puerto Rican people should “know how we arrived here to avoid that this happens again.”

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