Puerto Rico Gov. Alejandro Garcia Padilla dares Congress to pass restrictive financial control board

RICARDO ARDUENGO/AP

RICARDO ARDUENGO/AP

A Republican proposal in Congress would create a panel that would have close to total control of the territory’s economy.

AP – Puerto Rico’s financial crisis escalated Tuesday, as Gov. Alejandro Garcia Padilla won an emergency declaration from Puerto Rico’s Senate to suspend all payments on $72 billion in public debt.

The sudden move stunned both Washington and Wall Street, where leaders keep ignoring Puerto Rico’s pleas to be allowed to restructure its debts.

The governor’s action came a day after hedge funds holding Puerto Rico bonds sued in federal district court in San Juan to freeze assets of the island’s government development bank.

With his government almost out of cash and facing huge debt payments of $422 million on May 1 and nearly $2 billion on July 1, Garcia Padilla is forcing everyone’s hand.

Around 2:30 a.m. Tuesday, he won approval from Puerto Rico’s Senate for a debt moratorium until next January. The bill authorizes the governor to “protect the health, security and public welfare” of island residents by “using government funds first and foremost for public services.”

The bill then moved to the lower house, where a debate ensued for several hours. With financial industry lobbyists feverishly pressing legislators to vote no, a close vote was expected.

This sudden act of defiance should come as no surprise.

Late last year, Republicans in Congress refused to include a rescue package for Puerto Rico in a year-end federal spending bill. House Speaker Paul Ryan failed to pass a bill by March 31 to address the problem as he promised.

Republican leaders in the House Natural Resources Committee did finally issue a draft proposal last week. But its provisions outraged many Puerto Rican leaders.

The financial control board it would create for Puerto Rico would enjoy unprecedented powers over island affairs.

“Its real name should be the Omnipresent, Dictatorial and Colonial Board,” said former Gov. Anibal Acevedo Vila.

A good portion of the House bill is modeled on the 1995 financial control board Congress created for the District of Columbia’s financial problems.

But there’s a big difference between D.C. and Puerto Rico.

The district is a city, one that depends directly on Congress for big part of its budget, while Puerto Rico is an entire territory with its own Constitution and is supposed to be self-governing.

“The people of Puerto Rico have complete autonomy in internal economic matters and in cultural and social affairs,” the U.S. State Department told the United Nations back in 1953, when Washington urged removing Puerto Rico from the UN’s list of colonies.

“With the establishment of the commonwealth, neither the President nor the United States Senate participates in any way in the appointment of any official of the government of the commonwealth,” the State Department said then.

But now the Republicans want to trample on those 60-year-old assurances.

The House bill would authorize the President of the United States to appoint a five-member oversight board “as an entity within the government of Puerto Rico,” with only one member even having to reside on the island.

For the next five years, that board could approve or reject any budget or law proposed by the island’s elected officials. It could subpoena any records. It could privatize any government service. It could approve any contract over $1 million. It could create a subminimum wage. It could also petition to restructure any debts to bondholders and decide how those debts would be repaid. It could pass any rules or orders to carry out its work without judicial review.

The President would have to name four members from a list supplied by congressional leaders. So you could well have a Republican-dominated board of U.S. residents running Puerto Rico’s economy and government for at least five years.

That’s dictatorship, pure and simple. No wonder Garcia Padilla has dared to defy both Washington and Wall Street.

Los comentarios para este artículo han sido cerrados.