Two fiscal board members say goodbye today. What about the decision-making process?
By The Star Staff
The Financial Oversight and Management Board for Puerto Rico will lose two of its seven members today and a third in October, a situation that may complicate the board’s decision-making process unless the U.S. Congress makes new appointments.
With the departure today of José R. González, chief executive officer and president of Federal Home Loan Bank of New York, and Carlos García, chief executive officer of BayBoston Managers LLC and managing partner of BayBoston Capital LP, the oversight board will be left with only five members.
The Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) requires only a majority vote of the seven-member board for the approval of fiscal plans or budgets, to cause a legislative act not to be enforced or for an infrastructure project.
The bylaws approved by the oversight board in January 2017, however, state that all decisions made by the board must be approved with a minimum of four votes.
While bankruptcy attorney Rosana Cruz believes that the oversight board can function with five members as it has publicly said it can, the problem may arise once Board Chairman José Carrión leaves in October as he has said he plans to do, because the board will be left with only four members.
“Unless Congress approves their replacements, they will have problems because they will not have the required number of votes,” she said, adding that she “was unsure” whether amending the bylaws will help solve the problem with the decision-making process.
Regardless of the number of oversight board members, observers believe there will not be any significant advancements in the bankruptcy process until after the general election in November. The restructuring agreements of the commonwealth and of the Puerto Rico Electric Power Authority need legislative approval to enable them. Both agreements are currently held up in the courts because of the global pandemic.
The appointments of the oversight board members do not follow the constitutional appointment method in which the U.S. president appoints members and submits them to the Senate for confirmation. PROMESA calls for the president to select one of the seven board members and the rest from lists submitted to him by legislative leaders.
Section 2121 of PROMESA reads: “(A) The President shall appoint the individual members of the Oversight Board, of which — (i) the Category A member should be selected from a list of individuals submitted by the Speaker of the House of Representatives; (ii) the Category B member should be selected from a separate, non-overlapping list of individuals submitted by the Speaker of the House of Representatives; (iii) the Category C members should be selected from a list submitted by the Majority Leader of the Senate; (iv) the Category D member should be selected from a list submitted by the Minority Leader of the House of Representatives; (v) the Category E member should be selected from a list submitted by the Minority Leader of the Senate; and (vi) the Category F member may be selected at the President’s sole discretion.”
However, Congress has yet to submit to President Trump its new lists of prospective board members.