Sunday, June 26, 2022

Pierluisi Calls for Action to Prevent GDB Collapse

By on April 4, 2016

SAN JUAN – Puerto Rico’s resident commissioner in Washington, Pedro Pierluisi, blamed the administration of Gov. Alejandro García Padilla on Monday for the Government Development Bank’s (GDB) path toward insolvency.

Pierluisi said the lawsuit by a group of GDB creditors poses a possible receivership and the eventual liquidation of the entity, which he added would have disastrous consequences for Puerto Rico.  

Pierluisi, who is running for governor for the New Progressive Party, reiterated his call for García Padilla to correct the course his administration has followed in relation the management of the fiscal and economic crisis the government is facing.

“Sadly, what I have been warning about for months became reality this morning,” Pierluisi said. “The policy of lack of transparency and a refusal to sit down and negotiate with GDB’s creditors has provoked a group of them to sue the bank in federal court today.”

He stressed that the allegations in the suit are “very serious and must be addressed immediately.”

“From the beginning, I have said the only way to responsibly address the issue of the public debt and the fiscal and economic crisis is through consensual, transparent negotiations in good faith with our creditors, including the thousands of Puerto Ricans who deposited the product of their work in government investments and now find themselves in danger of losing a large part of their savings,” he said.

Gov. Alejandro García Padilla and Resident Commissioner Pedro Pierluisi

Gov. Alejandro García Padilla and Resident Commissioner Pedro Pierluisi

Pierluisi said that what has taken place since Thursday and culminated today with the suit in federal court against the GDB once again demonstrates “the lack of capacity and will of the García Padilla administration to comply with the obligations of the government of Puerto Rico, in this case of the GDB.

“The lack of transparency, including the refusal to present the audited financial statements of the GDB and the government in general or reveal the audit report of the Financial Institutions Commissioner’s Office, which wasn’t brought to light until Judge [José A.] Fusté mentioned it in a recent opinion, is another example of the misguided fiscal policy of this government,” Pierluisi’s statement reads.

The resident commissioner affirmed that Treasury Secretary Juan Zaragoza’s resignation from the GDB board, and that of the chief of staff from the posts in the Infrastructure Financing Authority and Public-Private Partnerships Authority indicates the administration “is preparing to throw in the towel.”

Given the GDB’s situation and the government’s fiscal crisis, Pierluisi proposed the following in his release:

– Discontinue the actions that have led to the lawsuit and negotiate a possible settlement;

– Continue, with urgency, negotiations with all GDB creditors, and all other Puerto Rico creditors in search of consensual solutions;

– In parallel, and as a result of those negotiations, stabilize the GDB so it can carry out its functions as fiscal agent and financial adviser and be an important player in the solutions that must be implemented to overcome this crisis;

– Commit to the practice of transparency and constant communication with the people, the financial markets and the U.S. Congress;

– Post the audited financial statements and monthly expense reports and align those expenses with the actual income we have. There is no justification to continue eroding Puerto Rico’s credibility and increasing the tension with our creditors and Congress through such an inconceivable delay.

You must be logged in to post a comment Login