May 14, 2021

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Resident Commissioner opposes amendments to PROMESA

Washington, D.C. – Resident Commissioner Jennifer González made clear her opposition to Congressman Raul Grijalva’s bill seeking to amend PROMESA and, among other things, secure a budget of at least $800 million annually for the University of Puerto Rico (UPR), because she believes that the measure only aims to send a partisan political message.

I don’t see any intention of helping the island. I don´t go along with such hypocrisy,” González said in an interview after the hearing hold Thursday’s and which showed some disagreements between the Commissioner and Raúl Grijalva, chairman of the U.S. House Committee on Natural Resources after voting to recess for the rest of the day.

The commissioner, who caucuses with the Republicans and returned to San Juan yesterday, said that if there were an intention to help Puerto Rico, they would start by eliminating PROMESA and sit down to negotiate with her party lawmakers, who control the Senate.

No one in Congress proposed legislation to repeal PROMESA, not even Commissioner González.

Nor did the New Progressive Party (PNP) government, under former Governor Ricardo Rosselló Nevares or Wanda Vázquez Garced administrations, proposed in Congress to repeal PROMESA, which four years ago imposed the Board overseeing Puerto Rico’s public finances and created a territorial bankruptcy system to restructure the island’s public debt, which then totaled about $72 billion.

Moreover, the PNP government defended the constitutionality of PROMESA in court.

Omar Marrero, the governor’s representative before the Board and executive director of the Fiscal Agency & Financial Advisory Authority (FAFAA), limited himself Thursday to asking the Natural Resources Committee to include in any proposed amendment to PROMESA language that would prevent the Board from intervening in public policy matters.

However, Grijalva’s bill would take a significant step toward canceling unsecured debt – which has no source of repayment -, declare education, health, public safety, and pensions as essential services and avoid conflicts of interest.

Nydia Velázquez (New York), José Serrano (New York), Alexandria Ocasio Cortez (New York), and Darren Soto (Florida), that is Puerto Ricans with voting rights in Congress, co-sponsored the bill. UPR President Jorge Haddock also supported it.

Commissioner González said, without listing them, that there are “many elements” in Grijalva’s proposal to ensure health, education, public safety, and pensions as essential services that she supports, but she did not provide any further explanation.

However, she considered that the legislation that could advance in Congress is Velázquez´s bill seeking to limit conflicts of interest with Board contractors.

At Thursday’s hearing, hold to examine Puerto Rico’s fiscal situation amid the coronavirus pandemic, Board Executive Director Natalie Jaresko supported the idea of avoiding conflicts of interest with its contractors but said the bill’s language should be amended because it could apply to professionals who have relationships with nearly 165,000 government creditors under PROMESA Title III.

However, she again rejected amendments that would allow for the cancellation of unsecured debt and the definition of essential services, as she believes it would open the door to debate in court on whether essential services are being overfinanced.

Nor does she see the need to create a commission to audit the debt – following the report by the law firm Kobre & Kim – and she described as “detrimental” the section of the bill proposing that any document on the Puerto Rican government’s debt should be considered public.

Jaresko expressed the Board’s opposition to having its expenses financed by the federal Treasury, because she believes, among other things, that it could lead to new demands on the constitutionality of the appointments of its members and that could limit the entity´s resources.

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