Thursday, May 23, 2019

U.S. Treasury sued for information on Puerto Rico fiscal board appointments

By on May 15, 2019

U.S. Treasury building in Washington, D.C. (CB photo)

Center for Investigative Journalism, LatinoJustice PRLDEF and Center for Constitutional Rights demand related documents after filing Freedom of Information Act request in 2017

SAN JUAN – A lawsuit was filed Wednesday in New York to demand information related to the process carried out when appointing members of Puerto Rico’s Financial Oversight and Management Board, especially documents on potential “ethical conflicts” and disclosure of financial interests that were required, as well as other details about the panel’s establishment under the Puerto Rico Oversight, Management and Economic Stability Act (Promesa).

The lawsuit was filed by the Center for Investigative Journalism (CPI), LatinoJustice PRLDEF and the Center for Constitutional Rights against the U.S. Treasury Department under the Freedom of Information Act (FOIA).

“The initial request for information originated in 2017, and the plaintiffs claim the Treasury breached its legal obligations when failing to deliver the documents related to FOIA request, “despite having admitted that it has documents,” the CPI, which is a nonprofit organization that trains journalists and has a legal program to help it in its objective of “working for freedom of information in Puerto Rico,” said in a release.

The lawsuit details 15 types of requests, including the “criteria for the evaluation of the candidates to belong to the Board, which agencies intervened, documents submitted by each candidate, how they established considerations of potential conflicts of interest, and professional and personal background information that was used in the evaluation of the candidates, among others,” the CPI explained.

“Having access to these documents takes on new relevance when the re-nomination of current candidates is before the consideration of Congress and when the expiration term, in August, of these appointments nears. In addition, a federal appellate court has said the way in which the current members were appointed was unconstitutional, which makes the need to learn how the candidates’ nominations process and their appointments by the Treasury was handled much more pertinent,” said CPI’s executive director, Carla Minet.

The Treasury’s delay in producing the documents, the CPI said, “is compounded by the refusal of the Fiscal Control Board to the request for some of these same materials about its members, such as the financial disclosure reports, which they have alleged are not included in the files of the Board because it was not constituted at the time.”

The CPI explained that following the FOIA filing, Treasury requested the petition be limited, which the CPI agreed to “without waiving its eventual right to maintain the original request.” Treasury also said it had to redact some of the documents before delivery, “and promised to deliver on dates it never complied with, in addition to denying an expedited process” to honor the request.

“Over the past two years, we have exhausted all administrative processes before the Treasury Department to obtain the information requested. Our request is for public information that above all should have been available from the beginning for the sake of transparency and accountability of an entity that was not elected and that operates by the legal imposition of the Congress of the United States. The refusal to answer our requests on basic aspects of a Board that, in essence, is controlling the destiny of our country is outrageous,” Minet said Wednesday.

“The lack of transparency of both the Trump administration and the Fiscal Control Board appointed by the federal government has led us to have to sue to request basic information from that entity that should already be public. The people of Puerto Rico and the general public should have had the information we requested since the nominations for the board began almost three years ago,” Natasha Lycia Ora Bannan, of LatinoJustice, added in the release.

The CPI said it is concerned about the background of some of the board members, and that their “affiliations have motivated other suits on potential conflicts of interest with respect to their functions on the Board,” which it added raises concerns about the “type of governance and accountability in the absence of effective citizen participation and lack of oversight of its conduct and policies.”

The lawsuit requests the court to deliver all related documents and continue to search for files that may fall within the scope of the request, in addition to preventing Treasury from continuing to deny the requests and that the department cover the hired attorneys’ fees.

The seven members of the fiscal board that was established when Congress passed Promesa on June 30, 2016, were picked for their “requisite financial, management and legal areas listed in the statute,” the lawsuit reads, adding that the panel exercises significant control over policy-making decisions in Puerto Rico.

The suit lists the following request for records to Treasury pursuant to the FOIA on Jan. 27, 2017, via email:

1) Records indicating the criteria that were used to evaluate and select the candidates for the Board and how these criteria were determined to be the most useful for the skills needed in carrying out the functions of the Board;  

2) Records indicating the weight given to each criterion in evaluating each candidate’s nomination for the Board;

3) Records indicating which agencies, entities or personnel were involved in determining the criteria for evaluating candidates for the Board;

4) Records submitted by each candidate for consideration in their appointment, upon or after their appointment, including financial disclosures and documents, conflict of interest forms or information, personal and professional background, interest statement, who they were recommended by and their professional qualifications;

5) Records indicating how each candidate was evaluated with respect to the criteria and results of their evaluations;

6) Records indicating which agencies, entities or personnel were involved in the process of evaluating all nominations for candidates for the Board, and what their respective roles were;  

7) Records indicating the process for establishing what the conflict of interest policy would consist of for potential Board members;  

8) Records indicating the process for determining conflicts of interest of prospective Board members and which agencies, entities or personnel were involved in evaluating whether any conflicts of interest existed;  

9) Records indicating whether any conflicts of interest for candidates for the Board were determined, and if so, what they consisted of and how they were addressed;

10) Records indicating what information was examined with respect to the professional and personal backgrounds of candidates for the Board, and by whom;  

11) Records indicating the considerations, if any, of the relationship, knowledge of, or residency in Puerto Rico for candidates for the Board;

12) Records concerning and/or reflecting any communications, inquiries or requests for information, documents, reports, or data from any member of the Board and/or their staff to any agency of the federal government or official of such agency;

13) Records concerning and/or reflecting any communications, inquiries or requests for information, documents, reports, or data from staff of any agency of the federal government or official of such agency to any member of the Board and/or their staff;

14) Communications, reports, updates or information provided by any member of the Board and/or their staff to the Treasury Department, an official in the Treasury Department, or any other agency or official of the federal government concerning the status of the Board’s work;

15) Communications, reports, updates or information provided by any staff member of the Treasury Department, an official in the Treasury Department, or any other agency or official of the federal government to any member of the Board and/or their staff concerning the status of the Board’s work.

Access the full complaint for injunctive relief here.