Fiscal board confirms dismissal of 5 of its 7 members

There were unconfirmed reports on Tuesday afternoon to the effect that the Financial Oversight and Management Board may go to court to fight the White House’s decision to dismiss five of its members.

By The Star Staff

The White House has fired five of the seven members of the Financial Oversight and Management Board, which oversees Puerto Rico’s finances and represents the U.S. island territory in its bankruptcy cases.

The information, first reported by the conservative media outlet Breitbart, was confirmed by Bloomberg on Tuesday. The five board members were fired Friday through emails sent by a White House staff member.

“The Oversight Board has been informed by the White House that President Donald Trump terminated the following five board members from their position on the Oversight Board: [board chairman] Arthur J. Gonzalez, Cameron McKenzie, Betty A. Rosa, Juan A. Sabater, and Luis A. Ubiñas,” the board said in a statement Tuesday. “The Oversight Board will continue to work to fulfill the mandate of PROMESA [the Puerto Rico Oversight, Management and Economic Stability Act] and in the interest of the people of Puerto Rico.”

On Tuesday afternoon, there were unconfirmed reports to the effect that the oversight board may go to court to fight the decision.

The decision comes as certain bondholders of the Puerto Rico Electric Power Authority (PREPA) are pressuring the public utility to pay its $8.5 billion bonded debt, a situation that has stalled a debt adjustment plan for the utility. The same bondholders have reportedly exerted pressure to have the oversight board removed.

It also occurs amid a government dispute over a contract that would give New Fortress Energy a monopoly on the delivery of natural gas to the island.

The White House has not announced who will replace the fired board members. While the move to dismiss the five members does not dissolve the oversight board, it makes it ineffective in making decisions as only two members remain.

According to emails viewed by Bloomberg, Andrew Biggs and John Nixon were not fired.

La Fortaleza had yet to issue a response at press time.

“The Financial Oversight and Management Board of Puerto Rico has been run inefficiently and ineffectively by its governing members for far too long, and it’s time to restore common sense leadership,” a White House official told Breitbart.

On average, oversight board staff salaries are 1,065% greater than the median household income in Puerto Rico, per the official, which is reinforced by a 2017 Daily Caller report, Breitbart reported.

The report from December 2017 found that the salary budget alone for the oversight board was $3 million a year for a total of 14 employees. Budget figures obtained by The Daily Caller show a projected payroll of $3 million, which works out to an arithmetic mean of $214,000 per employee salary, eclipsing the $20,078 median annual household income in Puerto Rico.

The firings occurred after MAGA activist Laura Loomer, who allegedly exerts influence over Trump, criticized the oversight board’s spending.

What will happen with PREPA’s bankruptcy? Lawyers consulted by the STAR noted that oversight board legal counsel could seek an extension of PREPA’s bankruptcy case.