Resident commissioner doesn’t believe atmosphere in DC conducive for amending Promesa
SAN JUAN – Resident Commissioner Jenniffer Gonzalez said Thursday there is no mood to amend the federal Promesa law despite claims that the Financial Oversight and Management Board has violated the statute in its handling of the island’s fiscal crisis and is acting beyond its purview.
González admitted that objections to the board’s actions have been brought to Congress’ attention. “They have been. But I don’t think Congress is in the mood for amendments,” she told Caribbean Business.
The remarks of the resident commissioner confirmed information received by Caribbean Business to the effect that President Donald Trump would not be investing political capital in Promesa.
Government creditors have accused the board of not abiding by Promesa provisions that call for the board to respect payment priorities. Assured Guaranty, a bond insurer with a $5.2 billion exposure to Puerto Rico issuances covered by the federal law, accused the board earlier this week of hiding creditors’ financial data and approving faulty fiscal plans.
In a letter to the board sent Monday, Assured CEO and President Dominic Frederick said the governing body certified a 10-year fiscal plan and fiscal year 2018 budget without making sure the numbers in the plan were accurate or lawful.
Meanwhile, Gov. Ricardo Rosselló sent a letter to the White House accusing the board of intervening in matters beyond its scope. Some creditors and even a labor union have challenged the legality of the board, arguing that its creation violates the Appointments Clause because its members were not confirmed by the Senate.
González made her remarks as she left a Spanish Chamber of Commerce event for which she was the keynote speaker. During her speech, she spoke about some of her efforts to bring about economic development to the island.
Of special interest to those attending the event were González’s efforts to have Puerto Rico included in a treaty between Spain and the United States that seeks to avoid double taxation of the investments made by the two countries.
The commissioner explained that together with Congressman Joe Kennedy, she chairs a caucus of Friends of Spain—a country that invests more than $60 billion in the United States and is an ally in the fight against terrorism—in order to push the initiative for the legislative session that begins in September.
In Puerto Rico, there are 170 subsidiaries of Spanish parent companies and have associated with local businesses or operate on their own.
“[The treaty] will allow these companies to avoid paying taxes in Spain if they have already paid them here. The difference is that here they pay 4% or 5% and over there is 45%,” Tomás Rodríguez, Spain’s consul general in Puerto Rico, said at the event. “That is the biggest obstacle stopping companies from coming here. Double taxation hurts us because we have to pay here and there.”