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Third Day of Meetings in La Fortaleza over Puerto Rico’s Fiscal Crisis Continue

By on March 31, 2016

SAN JUAN — Representatives from the local private sector met with Gov. Alejandro García Padilla on Thursday, as part of his efforts to establish a united front to achieve favorable congressional action that tackles the island’s fiscal crisis. He later met with Sen. María de Lourdes Santiago, gubernatorial candidate for the Puerto Rico Independence Party (PIP by its Spanish acronym).

García Padilla is seeking consensus on four elements: that Congress approves a debt-restructuring mechanism, a stay on creditor litigation against the commonwealth, economic development tools, and that any claims to the people of Puerto Rico should come from locally elected officials. For him, a fiscal oversight board can’t supersede the commonwealth’s autonomy.

The governor called Thursday’s meetings as very successful, and argued that so far, he could said there is support over the four elements of consensus from all participants. Still, he conceded there are other issues where they disagree.

PIP’s Santiago said the party not only believes, but also urges for a debt-restructuring process, with a protection mechanism against creditor lawsuits and a significant inflow of resources for economic development. “There is a fourth point that the governor describes as ‘claims to Puerto Ricans should only come from Puerto Rico’s democratic institutions.’ Over these topics, I don’t think it is possible that rational dissent could exist,” she said.

Nevertheless, when asked later by Caribbean Business about the proposed fiscal oversight board, Santiago noted there can’t be consensus over this issue, because it is “a contradiction” to say there could be a board that respects the island’s democratic powers. “How can anything be democratic under the Commonwealth status? We talk about protecting a democracy that doesn’t exist,” the senator said.

“A board that respects Puerto Rico’s democracy is a profound contradiction,” she added.

The governor said that she let him know about this. “I told her that the democracy she claims that doesn’t exist elected her to be a senator,” García Padilla noted, while adding that the PIP is a case in point that democracy in Puerto Rico exists. Nevertheless, the governor said he still respects the senator’s position.

Meanwhile, Santiago told the governor that the PIP “won’t participate in any joint effort that doesn’t have as the lead aspect a process of decolonization that leads to a voting process between non-colonial alternatives.”

“The PIP won’t beg Washington, D.C.,” she stressed, while adding that this is the historical moment to confront the U.S. over the island’s political status quo. For Santiago, this issue is intrinsically tied to the fiscal crisis, and for that reason, the island’s political status cannot be left aside in any proposed solution. What’s more, it should come first and foremost, she said.

“Even if [Santiago] agrees with the four elements of consensus, which is what I asked her, she declines to join the group in lobbying efforts. I respect that,” García Padilla said.

Although supporting the restructuring of the island’s debt, Santiago stressed this won’t solve the commonwealth’s economic woes.

Also meeting in La Fortaleza were representatives from the Private Sector Coalition, which comprises the Puerto Rico Chamber of Commerce and the local chapter of the Associated General Contractors of America, as well as the island’s Manufacturers (PRMA), Builders, Products, Certified Public Accountants, and Hospitals associations.

The coalition said there is consensus over the governor’s four items, while particularly stressing the need from a strong economic-development component in any federal legislation that is approved. For instance, the private sector reps mentioned healthcare funding parity, competitive energy market, incentives for manufacturing and services, increasing exports to the U.S., and the federal tax reform that could impact the Puerto Rico jurisdiction, among others.

“This is the Private Sector Coalition meeting with the governor in a common front,” said PRMA President Carlos Rivera. He noted that although it seemed both private and public sectors were lobbying Capitol Hill separately, now they are joining together on the effort.

For Rivera, the purpose of the meeting could be summed up as the following: “to seek, as a country, a consensus to deal with Puerto Rico’s situation, as it should have happened a long time ago.”

“With the [governor’s] four points, we are 100% in agreement from a macro point of view,” said Builders Association President Ricardo Álvarez, although adding that particular details would still need to be further evaluated.

García Padilla met on Tuesday with gubernatorial candidates David Bernier (Popular Democratic Party), Resident Commissioner Pedro Pierluisi (New Progressive Party, or NPP), and on Wednesday with Alexandra Lúgaro (independent), Manuel Cidre (independent) and Rafael Bernabe (Puerto Rico’s Workers Party), as well as with representatives from the United Retailers Association. Next week, García Padilla expects to hold discussions with labor union representatives.

NPP governorship hopeful Dr. Ricardo Rosselló declined to meet with the governor, who said he would welcome Rosselló if he eventually decides to participate.

“There are additional initiatives that each [participant] wants to propose, and some of them would agree with some of them,” the governor said Wednesday. “But the elements of consensus remain the same.”

The governor’s call for action follows the presentation of draft legislation released Tuesday by the House Natural Resources Committee to tackle the island’s crisis, with a final bill expected to be filed during the second week of April.

“It is only a draft, and we know it won’t be the final product,” Public Affairs Secretary Jesús Manuel Ortiz told reporters Wednesday.

The proposed legislation would establish a strong, independent fiscal oversight board, which would be charged with approving and overseeing budgets, fiscal plans and the commonwealth’s debt-restructuring process. The latter would take place through a mechanism to be established under the Constitution’s territorial clause, and would apply to all types of Puerto Rico debt.

As for the fiscal oversight board, García Padilla said that from his perspective, “an oversight board that could supervise whether Puerto Rico complies with balanced budgets and…fiscal parameters imposed by ourselves, in return for a restructuring mechanism, is a board I would accept.”

He is concerned with the capacity to impose or claim the people of Puerto Rico, while is not elected by the Puerto Rico people.

The resident commissioner said preliminary plans call for filing the bill April 11, followed by a committee hearing and markup during the same week. He added that the Republican leadership intends to take the measure to a vote in the lower chamber by the end of the month. As for the Senate, Pierluisi said chances of securing passage for the measure would depend on any bipartisan support it receives in the House. If there are only GOP votes approving the bill in the lower chamber, there is very little chance to clear the Senate, he noted.

“When we have joined together as a country, at least in nonpartisan issues, we have triumphed,” the governor said on Thursday.

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