Tuesday, August 4, 2020

Sources: Bielenberg to Resign from Promesa Post

By on January 26, 2017

By Eva Lloréns Vélez and Philipe Schoene Roura

The Puerto Rico Oversight, Management & Economic Stability Act’s (Promesa) revitalization coordinator-designate, Aaron Bielenberg, will likely be leaving the post in the near future citing “family relocation issues,” sources close to the matter told Caribbean Business.

Bielenberg, an infrastructure expert who has vast experience with critical project development and complex financing and corporate transactions, has been a partner at McKinsey & Co.’s Washington, D.C.-based consulting firm since 2013.

The revitalization coordinator is an important post, which includes developing critical infrastructure projects under Title V of Promesa. These duties include responding to comments on projects; addressing Puerto Rico’s difficulties completing major infrastructure projects; and evaluating all projects’ environmental consequences.

Former Gov. Alejandro García Padilla selected Bielenberg as revitalization coordinator, a position created by the federal Promesa law, from a short list in November. Besides Bielenberg, the board’s list also included Joseph Fontana and Riz Shah. Fontana is a partner at Ernst & Young and Shah is with PricewaterhouseCoopers.

All are “good candidates,” Rosselló said, adding, that “without the benefit of sitting down and discussing particular issues, and having a one-on-one with them, it is a bit more complicated to have the elements of judgment.”

If Bielenberg resigns, Hiedrick & Struggles, the firm retained by the control board to search for the executive director, general counsel and the revitalization coordinator, will submit another three names from which the governor will choose.

contractsA confidential document obtained by Caribbean Business lists the following attributes that the revitalization coordinator must possess: A proven track record of outstanding executive performance; professional stature with a reputation beyond reproach with respect to governance and business operating practices; awareness of the relevant business and political dynamics of Puerto Rico but unencumbered by close recent association with either extreme of the current debate; ability and willingness to travel frequently; disposition toward consensus building but willing to advocate for decisions for the good of the territory; fluency with public policy and the intersection of the private and public sectors; an orientation that balances a desire for collaboration with a focus on results; ability to commit to the effort for at least three to five years.

Promesa says the Financial Oversight & Management Board (FOMB) must submit to the governor no less than three nominees for the appointment. The governor has 10 days to select the revitalization coordinator. If the governor fails to make a selection, the board will then appoint the revitalization coordinator by majority vote.

Deadlines loom

Rosselló requested an extension on the delivery of the fiscal plan from Jan. 31 to Feb. 28 and on the stay imposed on liability claims from Feb. 15 to May 1.

The board replied by telling Rosselló about the goals, objectives and parameters that must be included in the new administration’s fiscal plan.

In the letter to the governor, the FOMB outlined five areas that the Rosselló administration must include in its fiscal plan for the government to generate, between now and fiscal year 2019, additional revenue and/or savings totaling $4.5 billion a year.

The five areas include “revenue enhancements” through adjustments to the island’s tax system and improvements in tax administration; “government right-sizing, efficiency and reduction”; reducing healthcare spending; reducing higher education spending; and “pension reform.”

Rosselló replied in a letter to the board last week that its proposals were unacceptable. “It is my view that any fiscal plan premised exclusively on a reduction in the health, well-being and living standards of the people of Puerto Rico through healthcare delivery cutbacks, current retiree pension reductions of our most vulnerable segments of the population and layoffs is by its nature unacceptable,” reads Rosselló’s letter to FOMB Chairman José L. Carrión.

As this newspaper was going to press, the governor’s representative before the oversight board, Elías Sánchez, had sent another letter to its Chairman Carrión in reply to the conditions established by the panel after the government requested an extension to present the fiscal plan.

The official assured the board that Rosselló’s administration was committed to working alongside the FOMB toward developing and approving a fiscal plan that is consistent with requirements established by Promesa, which established the oversight board.

—Luis J. Valentín contributed to this story.

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