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Where is the Dream Junta?

By on September 2, 2016

There’s a good chance that by the time you read this newspaper, U.S. President Barack Obama will have selected all the candidates to serve on a territorial control board enabled by the Puerto Rico Oversight, Management & Economic Stability Act (Promesa). Sadly for Puerto Rico, they will not necessarily be the top candidates that the Obama administration had hoped for, because many of the A-listers coming from both sides of the aisle opted out of the process.

What was described as a very onerous vetting process—deep background checks by the FBI and full disclosure of financials—ultimately became impossible to accept for many of those interviewed, because they would have had to divest themselves from holdings on all corporations standing to benefit from their Promesa actions.editorial-philipe-schoene

It became untenable for many of them because they did not have at their disposal a tax amnesty provision to offset the tax impact on the sale of their securities. It turns out that the final language in the conflict-of-interest rule in Section VIII of Title I gutted the provision of that tax-offset stipulation, seeking to make the law holier-than-thou.

So there was a growing chorus of “no gracias” by many of the top candidates who were reportedly beyond reproach.

So, the names coming down the pike do not compose a “dream junta,” but rather have been described by those close to the process as B or B+ listers. Just what Puerto Rico needs—well, not exactly.

Truth be told, the politics underpinning the process are evidence that Puerto Rico is No. 11 on the Obama administration’s top-10 list of priorities. A friend who is well-acquainted with the political dynamics on Capitol Hill once admitted: “the President does not look at himself in the morning as he is shaving and asks—‘I wonder how those poor people in Puerto Rico are doing?’”

This junta watch was no different. From the outset, the Obama administration’s advisers—Senior Adviser Valerie Jarrett foremost among them—were interviewing candidates as the president took to the links on Martha’s Vineyard. As Obama contemplated whether to play a seven iron instead of a nine iron into a stiff wind, Jarrett was weighing political crosscurrents on Promesa. And there was a plan afoot to hold up the candidates to the board coming from the list of Senate Majority Leader Mitch McConnell, who was entitled to two nominees. If the executive branch failed to accept the names from his list by the Sept. 15 deadline, it would have forced McConnell to hold Senate confirmation hearings.

The ploy would have played as the ultimate act of cynicism—a tit-for-tat dare to hold hearings, one-upmanship by Obama in reply to McConnell’s refusal to hold Senate hearings to confirm the president’s Supreme Court nominee Merrick Garland.

Sources on both sides of the aisle told Caribbean Business that the Obama administration has since desisted from its Promesa delay because they have bigger pugilists to topple. The administration is now contemplating ratification of a climate change accord during a trip to China without the two-thirds Senate vote required for treaties. In exercising his executive agreement, the president knows he will be spoiling for a political fight—Obama reportedly has moved on beyond Promesa. For him—eso esta plancha’o.

So, these control board members are coming down here to balance budgets, restructure debt and bind holdouts—we are back to the age of Foraker. The question is whether anyone can get us back to Operation Bootstrap. That will take solid ideas and the resolve to act—create tens of thousands of well-paid jobs and raise the standard of living, or watch our young talent disappear.

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