Tuesday, November 12, 2019

Sources: Rosselló Meets with Trump

By on January 9, 2017

Republican presidential candidate Donald Trump is photographed during an interview with The Associated Press in his office at Trump Tower in New York, Tuesday, May 10, 2016. (AP Photo/Mary Altaffer)

Republican presidential candidate Donald Trump is photographed during an interview with The Associated Press in his office at Trump Tower in New York, May 10, 2016. (AP Photo/Mary Altaffer)

SAN JUAN – Less than a week into his term as the 11th elected governor of Puerto Rico, Ricardo Rosselló held a whirlwind tour with lawmakers on Capitol Hill and then jetted off to New York for a “lightening rod” meeting with President-elect Donald Trump, two sources said. The meeting was reportedly coordinated by Trump’s former campaign manager, Corey Lewandowski, who was ousted last June amid controversy over his alleged abuse of Breitbart News reporter Michelle Fields, yet remains close to the campaign.

That the meeting was in fact scheduled, was confirmed by two sources—one from Wall Street and the other from the GOP. Other sources inside the Rosselló administration said they could “neither confirm nor deny the information,” but that it was not entirely accurate.

After Trump stunned political pundits with his victory over Democratic candidate Hillary Clinton, word inside the president-elect’s campaign was that Lewandowski, then a commentator on CNN, would be offered a senior post inside the White House. Lewandowski was not offered the senior advisory role he sought and instead founded Avenue Strategies, a political consulting firm based in Washington, D.C.

Now it appears Puerto Rico is among one of his first clients. “He was hired to help put together a meeting with the governor elect,” said a GOP source with knowledge of the meeting. “Rosselló made public that he held whirlwind meetings on the Hill, but he did not fly back to Puerto Rico through Washington, D.C. He flew back to the island from JFK [John F. Kennedy International Airport] because he was in New York for the meeting that took place at Trump Tower.”

In his role as a consultant, Lewandowski holds considerable sway inside the Trump administration. “After considering multiple opportunities within the administration, I informed him and his team that I think I can best help him outside the formal structure of the government. I very much look forward to doing that every day,” Lewandowski explained during an interview with U.S. News.

If it is in fact true that Lewandowski has been hired, it will be interesting to see how the political operative helps move the Rosselló administration’s objectives within the U.S. Treasury Department. Before his swearing in, the governor-elect had been hard at work trying to obtain assistance from the U.S. Treasury, either in the form of an offshore fund backed by Act 154 funds or a capital purchase agreement. Rosselló himself told Caribbean Business that although neither of those mechanisms would cost the U.S. money, officials at the U.S. Treasury tied to the Obama administration are against providing support beyond the Puerto Rico Oversight, Management and Economic Stability Act (Promesa).

Treasury officials, namely Antonio Weiss, counselor to the secretary, and Kent Hiteshew, director of the Office of State and Local Finance, were against providing additional support beyond that stipulated by the legislation for Puerto Rico because it could set a precedent for other distressed municipalities to come knocking on the department’s door.

“The meeting was a very smart thing to do. And on behalf of the people of Puerto Rico it is a very smart thing to do because you want to be able to make an impression early on that you are going to be coming up here and you need help,” another Wall Street source said. “There are people saying the board is going to be the ultimate power and that the federal government doesn’t really have a real role. It is probable that is the message U.S. Treasury [under Obama] wishes to convey to the [Trump] team. And in fact that may not be right.

“Treasury’s point of view is you have to let the board work. Their path, given the totality of the circumstances is that the board is going to Title III [restructuring] faster if you get closer to the point where there is no liquidity. The current folks at U.S. Treasury would have discharged the debt at an 80 percent discount—that is what they would have done from day one. The Trump people are leaving Puerto Rico without oxygen allowing the board to go to Title III faster. So, [the Rosselló administration’s] strategies may be evolving.”

The Rosselló administration’s stepped up efforts in sounding the alarm are running parallel to important players in the creditor camp who are calling on House Speaker Paul Ryan to bring Financial Oversight and Management Board Chairman José Carrión III in line with policy that would seek to use the consensual action clauses in Title VI of Promesa and “only contemplate Title III as a last resort.”

Two sources with knowledge of the meeting said Elías Sánchez, Rosselló’s nonvoting representative on the control board, accompanied the governor during several meetings that took place in New York. The Rosselló administration is in a race against time with doomsday deadlines—the administration must turn in a fiscal plan by the end of January and the stay on litigation in Promesa expires Feb. 15—for which extensions have been requested from the control board.

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