Puerto Rico Political Leaders Weigh In On PROMESA

SAN JUAN — Following the release of draft legislation being discussed by Republicans in the House to tackle the commonwealth’s fiscal crisis, Puerto Rico political leaders have weighed in on the proposed measure, particularly over the strong fiscal oversight it would establish on the island.

The House Natural Resources Committee released late last week a discussion draft of the Puerto Rico Oversight, Management & Economic Stability Act, or PROMESA, which would establish strong, independent fiscal oversight through a five-member board, while debt-restructuring tools wouldn’t be immediately made available to the commonwealth and would be subject to the board’s control.

Gov. Alejandro García Padilla (Photo by GV Cruz/Getty Images for Lufthansa Technik Puerto Rico)

“As proposed, it is dishonorable and degrading. At the expense of more and greater sacrifices by Puerto Ricans — to the benefit of our creditors — would access to the necessary restructuring mechanism be achieved. That condition is not acceptable,” García Padilla stressed late Saturday.

As for the proposed board, he said the Puerto Rico Constitution doesn’t allow government power to be concentrate in an entity that is not elected by Puerto Ricans and added that the commonwealth would go to court if such legislation were approved.

Nevertheless, the governor said the draft “should only be seen as the initial approach of Congress to fulfill its commitment to provide a comprehensive solution to Puerto Rico’s fiscal situation,” while adding he remains confident that final legislation would significantly differ to what is being discussed and would respect “the inalienable right of Puerto Ricans to govern themselves.”

Furthermore, García Padilla will be meeting with gubernatorial candidates of all the political parties as well as with representatives from both public and private sectors in an effort to establish a united front against any oversight initiative that deprives Puerto Rico of its self-governance.

For Popular Democratic Party (PDP) gubernatorial candidate David Bernier, “the ‘board’ pretends to solve the debt problem placing our people under extreme sacrifices. Moratorium and negotiation is the path forward,” he stated on his Twitter account Friday. He would reveal a proposal Monday to tackle the island’s debt crisis, although he has already called for a debt moratorium on the payment of principal for five years.

Resident Commissioner Perdo Pierluisi

Meanwhile, New Progressive Party (NPP) gubernatorial hopeful and Resident Commissioner Pedro Pierluisi stated Saturday that changes must be introduced to the bill if it is to secure bipartisan support in both chambers and be signed into law by the U.S. president.

For Pierluisi, the measure must establish a reasonable process to encourage “fair and equitable debt-restructuring agreements” between Puerto Rico and its creditors, as well as a “reasonable oversight board that has the authority to supervise, but not to command and control, the Puerto Rico government.”

In general, the resident commissioner believes the proposed board “would assist Puerto Rico’s elected leaders, not displace them,” but still warned against provisions that could grant the board with “excessive, unnecessary and anti-democratic powers,” such as those related to the appointment of a chief management officer, the power to unilaterally implement recommendations and the role in the government contracting process.

Having already opposed such measures as enacting a moratorium on debt service, Pierluisi stated that although it still requires modifications, the proposed debt-restructuring framework “is a promising start.” The draft legislation calls for a period of voluntary debt-restructuring talks, and if an agreement can’t be reached, the board would have the power to file for bankruptcy on behalf of the commonwealth through a process pursuant to the U.S. Constitution’s territorial clause.

NPP gubernatorial candidate Ricardo Rosselló

NPP gubernatorial candidate Dr. Ricardo Rosselló said Friday that legislation “under the territorial clause will cause the commonwealth, which has been rejected by the people, to be perpetuated in its most outrageous way. Any proposed board must be in the context of collaboration and treatment as a state, not a colony.”

He added that if the local government doesn’t “play an active role, [if] there is no collaboration with the IRS [Internal Revenue Service] to increase revenue, [if the bill] does not establish measures to promote economic development or trace a path toward statehood,” the initiative would be a failure.

Pierluisi highlighted that PROMESA would not limit Puerto Rico’s right to determine its future political status, including the use of the $2.5 million in federal funds already appropriated to this effect.

“At this historic moment, where essential government services could be at risk in the very short term, anyone who intends to reduce this matter to a mere discussion of status, exclusive of partisan dynamics, hurts the country and its chances,” the governor said.

For the secretary general of the Puerto Rican Independence Party, Juan Dalmau, the proposed board is “the culmination of colonial commonwealth” and also urged for rejecting the measure.

In his view, “it is now time to demand forcefully and with dignity that Congress face the political problem of Puerto Rico. Separating the issue of the fiscal crisis from political subordination issue is not understanding the full extent of the root of the problem.” For Dalmau, establishing the board would not address Puerto Rico’s crisis, but rather “meet the wishes of vulture creditors.”

“The draft states that the governor has to report every three months to the board, which enjoys immunity with respect to its determinations regarding the country’s budget, and neither he nor the Legislature can monitor its actions. In other words, the commonwealth’s Constitution is not worth the paper it is written on,” Dalmau stated Saturday.

One of the PDP candidates for resident commissioner, Sen. Ángel Rosa, also strongly rejected the draft legislation, calling it “an affront to democracy.”

“No citizen who respects themselves can accept such action. It is a blatant attempt to usurp the democratic rights of our people to hand Puerto Rico over to those who finance congressional campaigns,” the senator said in a statement Friday, noting that the proposal fails to contain any of the fundamental elements that have been recommended by experts to help Puerto Rico overcome its crisis and restructure its debt, such as economic development tools.

“The Republican majority in Congress is behaving in this like the ‘Dog in the Manger’ because it does not solve anything or allow anything to be solved,” Rosa stated.

PDP President David Bernier

Rosa reaffirmed he favors Bernier’s initiative to negotiate with creditors —or unilaterally implement it if no deal is timely reached — a five-year moratorium on principal to solve the debt crisis. He explained that “would allow us to inject some $2.5 billion into the economy, in strategic activities that promote economic growth. Personally, I have spoken with several creditor groups and they are willing to negotiate.”

Amid all the feedback that has been given since the draft’s release, Pierluisi stressed the bill will change. Moreover, he urged “every responsible leader in Puerto Rico” to be looking for ways to improve the proposed measure, “rather than simply [ignore] the good provisions and [complain] about the bad provisions.”

Related Posts

• 

  Being Vigilant of the 7 Benchmarks to end 2022
  Being Vigilant of the 7 Benchmarks to end 2022
• 

  Inflation Heading Down, What Happens Now?
  Inflation Heading Down, What Happens Now?
• 

  The Six Factors to Expect during the end of 4Q22
  The Six Factors to Expect during the end of 4Q22
• 

  Puerto Rico Banks Deliver strong earnings, beating most banks
  Puerto Rico Banks Deliver strong earnings, beating most banks

You must be logged in to post a comment Login