Washington – In anticipation of the voting session that he plans to convene in the coming weeks, House Natural Resources Committee Chairman Raúl Grijalva introduced the bill to amend PROMESA yesterday and which has been under consideration since the beginning of this Congress session.
Like the draft that has circulated since 2019, the legislation seeks to ensure at least $800 million annually for the University of Puerto Rico (UPR), it also specifies that public education, public safety, health care, and pensions are essential public services, ensuring adequate funding by the Government of Puerto Rico and Oversight Board. The legislation seeks to create an independent commission to audit the debt and proposes to discharge some of the island´s unsecured obligations.
A new section is intended to prevent members of the Oversight Board, as well as the person who serves as the executive director, from serving as local government officials or holding financial responsibilities in debt related processes.
With the support of the four Puerto Rican Democrats in Congress, the legislation included the language in the bill by Democratic Congresswoman Nydia Velázquez seeking to avoid conflicts of interest with contractors of the Board overseeing the island’s public finances.
The bill mandates to establish an Ethics Board within the fiscal entity, “comprised of 3 nonexecutive board members.”
This ethics board would be required to produce an annual report detailing the compliance or non-compliance by Board members, contractors, and subcontractors.
Regarding eligibility for appointments to the Board, the bill states that members should not be “an officer, elected official, or employee of the territorial government, a candidate for elected office of the territorial government, a former elected official of the territorial government, has
never served in any official capacity in the territorial government or any of the municipal government or public corporations of the territorial government,
or financial institutions owned by the territorial government, and has never been an employee or director of any corporation, company, or institution that sold, purchased, or insured financial assets to or from the territorial government.’’
This would prevent Jose Carrión III – who chaired the board of a public corporation – and former Government Development Bank presidents José Ramón González and Carlos García, from continuing as Board members.
Although Grijalva acknowledged that his proposals to amend PROMESA will not advance in the Republican-controlled Senate, he told El Nuevo Día that he believes it is important to approve them on the House floor during this Congress, so that they will be already strong under a possible Democratic president for the next term.
The bill is co-sponsored by the four Puerto Rican Democratic representatives, Velázquez, Alexandria Ocasio Cortez, José Serrano, and Darren Soto. By press time, Commissioner Jennifer González, a member of the Republican party, had not commented on the issue.
The measure did not include original proposals in Grijalva’s draft bill seeking to create the role of a federal coordinator for Reconstruction and a Revitalization Officer for the Puerto Rico Electric Power Authority (PREPA). However, the legislation would eliminate the Revitalization Officer position now included in PROMESA and has been vacant for a long time.
The Democratic bill examples of capital expenditures and investments necessary to promote economic growth, and requires to classify any public debt-related document as a public document and establishes that Board expenses will be covered by the federal Treasury.
In that sense, the Office of the Comptroller General (GAO) would be required to provide annual reports on the disbursements and use of funds allocated to the Board, and the compliance of the fiscal entity with PROMESA.
The bill incorporates the language of a bill by Democratic Senator Elizabeth Warren (Massachusetts) and Congresswoman Velázquez seeking to cancel part of the public debt, which has no specific source of repayment.
It also creates a commission with representatives from different sectors to audit the public debt.
“Whatever your political vision, we can all agree when a course of action is not working as planned, and PROMESA is not working for the people who need it most,” Grijalva said.
Velázquez said the measure reaffirms her rejection of the austerity measures that put hedge funds and speculators’ profits ahead of the people of Puerto Rico.
For Ocasio Cortéz, this bill is a step in the right direction, ensuring that essential services, such as health care, public education, and pensions for the most vulnerable communities are protected.
“PROMESA Act has too often failed to protect the most important asset that Puerto Rico has- its people,” said Serrano who added that these critical reforms restore greater sovereignty for our fellow citizens in Puerto Rico and their elected leaders, Soto said.
Although the Board seemed once again to sympathize with the idea of avoiding ethical conflicts with its contractors, the entity reaffirmed its opposition to the idea of canceling unsecured public debt and defining essential services as proposed in the bill.
The Board Executive Director Natalie Jaresko said that, as the Oversight Board has previously stated, if several of the amended provisions are approved, it would undermine the Oversight Board’s efforts to reach an expeditious and fair resolution of claims against the Government of Puerto Rico and certain instrumentalities.
The legislation has the support of UPR President Jorge Haddock, the Puerto Rican Association of University Professors (APPU), the National Confederation of Students, the Service Employees International Union (SEIU), Power4PuertoRico, the Hispanic Federation, and the Center for American Progress.