Uncertainty Still Clouds Puerto Rico’s New Fiscal Agent
SAN JUAN — Uncertainty still shadows the current role of the commonwealth’s new fiscal agent, the Puerto Rico Fiscal Agency & Financial Authority, which was created upon the enactment of the island’s moratorium law.
In addition to the fiscal agent duties taken over from the Government Development Bank (GDB), the new entity is tasked with overseeing the commonwealth’s debt-restructuring efforts. But sources tied to La Fortaleza say things have been murky ever since the moratorium law was enacted, as the entity has no budget assigned and it is still unclear how, precisely, it would carry out its operations.
Secretary of State-designate Víctor Suárez — also executive director of the Puerto Rico Convention Center District Authority — was named last month by the governor as new chief and sole board member of the new fiscal agency. While the law doesn’t call for legislative confirmation of his designation, lawmakers considered at one point whether to amend the law to that effect.
It is also uncertain whether GDB President & Chairwoman Melba Acosta would continue to lead debt-restructuring talks with commonwealth creditors, or if Suárez has already taken lead on these efforts.
The moratorium legislation also provides for the new fiscal authority to take over all debt-restructuring-related contracts between the GDB and external advisers, including those for Millstein & Co., Cleary Gottlieb and Citigroup, some of the stateside firms running point on Puerto Rico’s debt-restructuring efforts with its creditors.
The law further establishes it could bring current GDB employees onboard, while honoring the terms and conditions of employment in effect at the time of the transfer, including any acquired rights, privileges, obligations and seniority.
Meanwhile, as of this writing, La Fortaleza has yet to fill several vacancies at the GDB’s board, deliver a budget plan for fiscal year 2017, which begins July 1, and release audited financial statements for fiscal 2014 and 2015. In explaining the delays, the García Padilla administration has singled out the atypical circumstances that currently affect the island.