Photo courtesy of Congressman Ritchie Torres
Democratic Congressman Ritchie Torres (NY-15) issued a statement on Aug. 5 in response to U.S. President Donald Trump’s firing of all the Democratic appointees to the U.S. Fiscal Oversight and Management Board (FOMB) in respect of Puerto Rico.
“Donald Trump has fired all of the Democratic appointees to the Fiscal Oversight and Management Board and will likely replace them with partisan loyalists: political hacks willing to sell out Puerto Rico to predatory bondholders,” Torres said.
FOMB was created by Congress under PROMESA, The Puerto Rico Oversight, Management, and Economic Stability Act, a U.S. federal law enacted in 2016 that serves as a custom-made bankruptcy law for Puerto Rico.
According to officials at Torres’ office, members of the Board are appointed by the U.S. president through a mechanism established by law. They are not U.S. government officials but the president, in consultation with Congress, appoints them.
Meanwhile, they said the Puerto Rico Electric Power Authority has been going through a bankruptcy process since the establishment of PROMESA. They said several deals have been considered and FOMB has proposed cutting the debt of $8.5 billion to $2.6 billion. They said a specific group of bondholders (Golden Tree Management) do not accept the latest proposed deal and would like $12 billion (principal plus interest) instead.
The congressman continued, “If those bondholders secure their sweetheart deal, Puerto Rico will be locked into paying the highest electricity rates in the country (second only to Hawaii) while relying on a failing electric grid. Paying the highest electricity rates for the worst electric grid [is] not ‘efficiency,’ it’s exploitation.”
A U.S. territory with U.S. citizens living on the island, but not a U.S. State, Puerto Rico lacks full representation in Congress and full participation in federal programs.
As reported, the island is also subject to a contentious law called The Jones Act which, as explained by the Cato Institute, ensures restrictive fee arrangements are in place pertaining to shipping, docking and transportation. Some experts argue that permanent Jones Act waivers for Alaska, Hawaii, Puerto Rico, and other non-contiguous U.S. territories, the economies of which are disproportionately dependent on waterborne transportation, would mark progress.
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