Calls to audit debt made

Democrats in Congress and labor unions make calls for an audit and to restructure the public debt of Puerto Rico

WASHINGTON - Democrats in Congress demanded yesterday an audit for Puerto Rico’s debt, that the OB end the use of the legal bankruptcy mechanism, and for the government of Ricardo Rosselló to desist in stripping benefits from workers.

Together with experts on the issue of the fiscal crisis and labor union representatives, democratic leaders participated in a forum in the House to demand greater attention by Congress to the plight of Puerto Rico, following the end yesterday of the stay that shielded it from litigations to collect on the debt as provided by PROMESA.

“People must know how this debt was encouraged, how it happened, and how we can make sure it never happens again,” said democrat congressman José Serrano (New York), by joining the slogan #AuditoríaYa (Spanish for #AuditNow) done previously by his Puerto Rican colleagues Luis Gutiérrez (Illinois), and Nydia Velázquez (New York).

An amendment by Serrano to the PROMESA bill had guaranteed that the Board would not take steps to eliminate an audit commission. But, the decision to eliminate the commission was made by governor Ricardo Rosselló, despite objections from the entity’s members, the political opposition, and a broad spectrum of civic sectors.

This week, in statements made to El Nuevo Día, former bankruptcy-specialized judge Gerardo Carlo, held that it is time for Congress to investigate the issues of Puerto Rico’s debt, on possible violations of federal securities’ law and conflict of interests.

Puerto Rican democrat Darren Soto (Florida), member of the subcommittee on Indian, Insular and Alaska Native Affairs, said to be open to taking the proposal to the leadership of the  subcommittee, which has direct jurisdiction over the Island.

Though he thinks it’s a good idea, professor Simon Johnson, former Chief Economist at the International Monetary Fund and professor of the Massachusetts Institute of Technology (MIT), believers that republicans have not shown an interest to continue searching for alternatives to the crisis.

Resident commissioner in Washington, Jenniffer González, thinks that the courts "are going to have” to conduct a audit on the debt.

But, Eric LeCompte, executive director of religious groups Jubilee USA, said that regardless of whether a legal bankruptcy is declared the audit will have to proceed, “it wouldn’t be as in-depth an evaluation of the debt it would have been done by the multisectorial committee” of the Island. 

Legal bankruptcy sought 

Both congressman Velázquez and his colleague Gutiérrez also stressed yesterday the need for the Oversight Board, created by PROMESA to control the financial decisions of the government of Puerto Rico, to use tittle III of the statute that allows debt restructuring processes to be carried out before a bankruptcy judge who would be appointed by the Chief Justice of the US Supreme Court, John Roberts.

In a written statement, congresswoman Velázquez said that it “is inconceivable” that at times in which a litany of suits has begun, for the federal board to not have used tittle 3 of the law already or that governor Rosselló should not have requested it.

The federal legislator said she voted in favor of PROMESA because it allowed for the restructuring of 100% of the public debt. “The governor and the board have the moral imperative to act immediately.  If they fail to do so history will judge them harshly,” Velázquez added

As democratic spokesperson for the House Committee on Natural Resources, Raúl Grijalva (Arizona), headed the forum. “We are concerned that an avalanche of suits from ‘vulture funds’ turn an economic recession in Puerto Rico into a depression,” said Grijalva, while denouncing “the unpopular austerity measures” taken by the government.

Gutiérrez, for his part, highlighted during the forum the resistance shown by university students to the cutbacks pushed by the governor and the board controlling the public finances of Puerto Rico.

He said it was evident since the outset that PROMESA would not be the response to the crisis. “Amidst a health and jobs crisis,” said Gutiérrez, the republicans’ defense of the PROMESA law, “was that it would not cost a cent to US taxpayers, which  reflects how willing they are to help.”

In spite of the elimination of the audit committee, the labor unions – represented in the forum by Iram Ramírez, from the Workers’ Federation, Steve Kreisberg from AFSCME, and Mairym Ramos, form SEIU-, perceive that pressure is growing in Puerto Rico against the austerity measures, as was shown by the march of May 1.

The economist Johnson held, for his part, that it is urgent to restructure the public debt, and then think about assistance measures from Congress in favor of economic growth.

As warned this week by congresswoman Velazquez, when news came of the $295.9 million allocation in Medicaid funds, Johnson fears that new allocations – as was stated in the governor’s fiscal plan,- may be used by the board to increase payments to creditors. 

By:  José A. Delgado
Source: El Nuevo Día