US Senate passes bill to prevent conflicts of interest under PROMESA
By The Star Staff
The U.S. Senate has passed a bill that would prevent conflicts of interest related to the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA).
U.S. Sens. Bob Menéndez (D-N.J.) and Marco Rubio (R-Fla.), along with Rep. Nydia Velázquez (D-N.Y), on Sunday applauded the unanimous passage of the bicameral and bipartisan Puerto Rico Recovery Accuracy in Disclosures Act (PRRADA). The Senate-passed bill will now head to the House of Representatives for final passage.
“When Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) in 2016, one of the many reasons I was vehemently opposed is because it included an unfair loophole that allowed bankruptcy advisers and consultants to get rich off of worsening economic inequalities in Puerto Rico without having to disclose their conflicts of interest with creditors to whom Puerto Rico owed money,” Menéndez said. “Today we took a monumental leap forward in righting this wrong. By unanimously passing this legislation in the Senate, the people of Puerto Rico are now one step closer to finally having the transparency they deserve in the debt restructuring process.”
“It is past time to close this loophole and ensure our fellow citizens living in Puerto Rico are benefitting from transparency requirements that are afforded to Americans living on the mainland,” Rubio said. “Today, the Senate has taken a step in the right direction to require advisors and consultants to Puerto Rico’s Fiscal Oversight Board to disclose conflicts of interest. I look forward to seeing the legislation receive swift passage in the House.”
Said Velázquez, “By applying a robust disclosure requirement to all PROMESA Title III proceedings and eliminating the double standard facing the people of Puerto Rico, this bill will help to restore confidence that the Board’s bankruptcy advisors do not have their ‘thumb on the scale’ to favor certain debts where they have a self-interest.”
“I’m very proud that it has passed the Senate and now the House must quickly follow suit so it can become law once-and-for-all,” she added.
The legislation would impose robust disclosure requirements on all Puerto Rico Financial Oversight and Management Board’s advisers and consultants, closing a loophole in existing law that the bill’s proponents say currently disadvantages the people of Puerto Rico in the island’s debt restructuring process. PRRADA will require attorneys, accountants and other professionals involved in the debt restructuring to disclose potential conflicts of interest, ensuring that the people of Puerto Rico have access to the same transparency and disclosure practices required by law in U.S. mainland bankruptcy cases.
In the Senate, in addition to Menéndez and Rubio, PRRADA is cosponsored by Sens. Debbie Stabenow (D-Mich.), Mazie Hirono (D-Hawaii), Richard Blumenthal (D-Conn.), Roger Wicker (R-Miss.), and Ron Wyden (D-Ore.). In the House, PRRADA is also cosponsored by Andy Biggs (R-Ariz.), Pramila Jayapal (D-Wash.), Raúl Grijalva (D-Ariz.), David Cicilline (D-R.I.), Jamie Raskin (D-Md.), Jenniffer González Colón (R-P.R.), Darren Soto (D-Fla.), and Eric Swalwell (D-Calif.).