Jaresko to resign as fiscal board executive director
By The Star Staff
After five years heading what is the largest debt restructuring in the history of the municipal bond market, Natalie Jaresko is stepping down as executive director and interim revitalization coordinator of the Financial Oversight and Management Board for Puerto Rico effective April 1.
The oversight board is beginning the public search for a new executive director and Jaresko will assist in the transition. The restructurings of the Puerto Rico Electric Power Authority, whose debt adjustment plan may be filed in March, and of the Highway and Transportation Authority are still pending.
Jaresko joined the oversight board as executive director in March 2017 after a distinguished career in both the private and public sectors, including for the U.S. Department of State and as finance minister of Ukraine, and as a founding partner of Horizon Capital private equity fund.
“Puerto Rico has the strength, and the people of Puerto Rico have the dedication, to end this crisis and build a better future,” Jaresko said in a written statement. “After reducing most of Puerto Rico’s debt, including for the Commonwealth, to affordable levels; fulfilling our obligation to stabilize Puerto Rico’s finances; and creating a roadmap to prosperity with the Fiscal Plan, Puerto Rico has reached an important turning point.”
“I am leaving the Oversight Board at a time of recovery and stability,” she said. “I am proud of what we have achieved, and I am confident that the road that led us to this milestone will take Puerto Rico further to growth and prosperity.”
Under Natalie Jaresko’s leadership, the oversight board made substantial progress for Puerto Rico’s future: the Plan of Adjustment to reduce the commonwealth’s outstanding debt by 80%, to break more than a decade of deficit spending, and fiscal plans that are Puerto Rico’s roadmap to growth and prosperity.
Her tenure in Puerto Rico was not without incident. She was the target of criticism because of her $625,000 per year salary. Her contract was extended in August of last year for 26 months. She engaged in a public dispute and court battle with the government, which refused a debt adjustment plan with cuts to pensions. The oversight board also went to court and prevailed in a suit against the government that sought to invalidate Law 29, which exempts Puerto Rico’s 78 municipalities from paying health insurance and pensions and transferred those payments to the central government. She also battled with the Legislature over budgets.
Under her tenure, in June 2020, the oversight prevailed in the U.S. Supreme Court ruling in the case Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC, which found the board’s appointments did not violate the Constitution.
As interim revitalization coordinator, a position she took after the resignation of Noel Zamot in 2019, Jaresko did not move forward any key infrastructure projects.
“Natalie Jaresko’s service to Puerto Rico and her dedication to the work of the Oversight Board to fulfill the mandates Congress defined in PROMESA [the Puerto Rico Oversight, Management and Economic Stability Act] has been essential,” said the oversight board’s chairman, David Skeel, in a written statement. “I am saddened by her personal decision to step back but I also understand her desire for a change after five years of rewarding but relentless and difficult work to help Puerto Rico recover from its fiscal and economic crisis. Natalie leaves the Oversight Board well-positioned for the challenges that still lie ahead.”
“Nobody who sat at the negotiating table with Natalie Jaresko would ever doubt her strength. Nobody who ever saw Natalie Jaresko fight for Puerto Rico’s recovery would doubt her dedication to improving the life of the people of Puerto Rico. Natalie succeeded in ways few had thought possible,” Skeel said. “We all owe her an incredible debt of gratitude.”
“I am speaking for all members of the Oversight Board when I wish Natalie Jaresko all the best for her future, and, personally, I sincerely hope her dedication to public service will benefit others as much as it has benefited Puerto Rico,” the oversight board chairman added.
Gov. Pedro Pierluisi Urrutia issued the following remarks regarding Jaresko’s resignation:
“I have always had the utmost respect for [oversight board] Executive Director Natalie Jaresko,” he said. “I thank her in particular for her work in Puerto Rico’s debt negotiations, because her ample financial experience helped us achieve a substantial reduction in our government’s debt.”
“Although we have had great differences, particularly with regard to pensions, and I have been critical of multiple [oversight board] actions for adding bureaucracy, micromanaging government operations and not reflecting the will of our people, I recognize that Natalie Jaresko has always worked in good faith and in favor of what she believes is for the benefit of Puerto Rico in the long run,” the governor said.
“I wish her great success in her future endeavors and urge the members of the [oversight board] to ensure that whoever replaces her knows that we are in a transition stage toward the end of the Board’s mandate,” he added.
Jaresko and the oversight board often clashed with the Legislature in matters such as retirement benefits of public workers, the Unjustified Dismissals Act, the Puerto Rico Electric Power Authority and the board’s rejection of numerous legislative bills that went against the fiscal plan.
House Speaker Rafael “Tatito” Hernández Montañez said in written remarks that “although we have differences with what the Oversight Board represents, we recognize that during the past year we have managed to establish a sincere dialogue with Mrs. Natalie Jaresko, who has allowed us to establish formal communication with the Board, approve the first balanced budget in the last five years, and approve the necessary legislation to get Puerto Rico out of bankruptcy.”
“We hope that the person who replaces Mrs. Jaresko continues to respect the powers and prerogatives of the Legislative Assembly to maintain good communication,” he added.
House Treasury Committee Chairman Jesús Santa Rodríguez said “now we have to focus on who will replace her and remember that it is another scenario and there are still a few things to conclude.”