Saturday, December 14, 2019

Labor, community group coalition calls on Congress to replace Puerto Rico fiscal board chairman

By on November 14, 2018

SAN JUAN — Hedge Clippers, a coalition of labor groups and community activists, published a report it said analyses the history of conflict of interest in the career of José Carrión III before he was named the chairman of Puerto Rico’s fiscal oversight board.

The report, titled “Insured to Profit: Conflict of Interests in the Career of Jose Carrion III,” alleges Carrión, a former health insurance executive, “may have used his close ties to government regulatory agencies to benefit his business partners in the past,” according to the group, which says it exposes “the mechanisms hedge funds and billionaires use to influence government and politics.”

The paper criticizes “the lack of vetting process” for Carrión, and Hedge Clippers is calling for an investigation into potential “conflict of interest on all members of the board and call on the new Congress to replace him.”

Members of the fiscal board are set to end their term in 2019 and Congress can choose to replace current members, the group said, adding that they “were not elected but rather selected by Congress members from both political parties and approved by then President Barack Obama.”

The following are what the release called “report highlights”:

Carrion’s wife, Gloria Benitez, also a veteran in the health insurance industry, approved a lucrative government contract that benefited a private equity firm where Carrión served as an advisor.

It has not been previously reported that two former employees from Carrión’s insurance brokerage firm, Laffitte & Casellas, Agnes Suárez and Eduardo Emanuelli, were appointed to the board
 of directors of the Government Development Bank (GDB) during a key period of debt creation. This is significant given the GDB restructuring agreement approved by creditors and the Oversight Board, which releases former GDB directors from significant forms of legal liability, as detailed in a previous Hedge Clippers report.

Also, the fact that Carrión as the chairman of the fiscal control board continually obstructs requests soliciting independent audits to the debt protects them scrutiny.  

It is not the first time Hedge Clippers targets members of the board. In 2016, the coalition released a report denouncing conflict of interest from members of the then newly appointed fiscal board and “their ties to the financial companies that would benefit from any debt restructuring.”

The report is available here.

Hedge Clippers: Puerto Rico debt restructuring agreement could block accountability for key officials, bankers

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