The Financial Oversight and Management Board for Puerto Rico
By GREGORIO IGARTÚA
Special to The STAR
The Financial Oversight and Management Board for Puerto Rico is working hard, and in good faith, in attempting to restructure and improve Puerto Rico’s fiscal challenges as ordered by Congress. Notwithstanding, in my view, its fiscal exercise will be a futile one unless it acknowledges the real cause of the economic problems it is attempting to solve.
As I exposed in letters to previous chairmans of the oversight board, José B. Carrión III (6-16, 2020) and David A. Skeel (1-26, 2021), and the current executive director, Robert Mujica, in a lunch meeting eight weeks ago, within this context, the real cause is the unequal and/or differential discriminatory treatment given to the American citizens/residents of Puerto Rico by Congress and by the executive branch, in federal aid to Puerto Rico, which is much lower than that given to states. In this respect, the Popular Democratic Party’s pretentious insistence on defending the status quo is costing us over $20 billion in federal aid annually.
I believe it is long overdue for the oversight board to demonstrate that it is working with Puerto Rico’s financial crisis within the correct perspective, that it is aware of this reality, and to inform the president, Congress, and the governor of Puerto Rico about it. Equal treatment of Puerto Rico under equal footing, like that given to the states, is the only road to the solution of the fiscal crisis.
Notwithstanding, within the board’s work perspective, there is no way that Puerto Rico’s fiscal problems will be ever solved under a federalist structure in which it is at a disadvantage by being treated unequally by the lower transfer of payments in economic aid as compared to that going to states. This is the source of the serious problems in Puerto Rico’s fiscal structure, budget execution, public administration and tax structure. There is no way you can restructure economic policies to solve our financial crisis under the unequal treatment scenario to which we are submitted, and/or under such an economic labyrinth.
Although I never received any response from Mr. Carrión, or from Mr. Skeel, I was able to bring the issue personally to Mr. Mujica at the aforementioned lunch meeting. I explained to him how the oversight board had failed to inform Congress that the real cause of the bankruptcy was the discriminatory treatment in financial aid given to Puerto Rico, a de facto incorporated territory, almost assimilated as a state (as supported by previous GAO reports, and as exposed in G. Igartúa in “The de facto incorporated US territory of Puerto Rico”).
He responded that he agreed with me, but that the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, forbids the board from entering the political arena in working with the financial issue. Section 402 of PROMESA says in pertinent part as follows (Public Law 114-187- June 30, 2016, (130 Stat. 586) (48 USC 2192.)): “... Nothing in this Act shall be interpreted to restrict Puerto Rico’s right to determine its future political status, including by conducting the plebiscite as authorized by Public Law 113-76. …”
In my view, the oversight board’s interpretation of Section 402 of the law on the issue is too restrictive, and it is a misconception. The board is acting according to its interpretation of the law, on a dead end street by not informing Congress the real reason for the bankruptcy of Puerto Rico and the financial crisis. Identifying the reason for the bankruptcy will help Puerto Rico, and Congress, to help US. We are all American citizens in Puerto Rico and we deserve that the fiscal problem be treated according to what we are, not what we can hypothetically be, or what we are not (Mora v. Mejias 206 F2d 377).
Sadly, the problem is related to our political status of not being certified as an incorporated territory, and as a state. Our present political relation has developed under self-determination. We accepted our American citizenship voluntarily, and adopted our own Constitution in accordance with Congress’ federalist requirements. Thus, Section 402 provisions were met and allowed the oversight board to deal with the differential treatment problem within the correct perspective. Certifying Puerto Rico as an incorporated territory would give us parity in federal aid. Incorporation is needed as a prerequisite to statehood (Guerrido v. Alcoa Inc. 234 F2nd 349).
In other words, the fiscal board’s restraints are failing Puerto Rico.
Gregorio Igartúa is an attorney with a practice in Aguadilla.
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