Recently, three US Senate committees held public hearings on Puerto Rico’s economic crisis: the finance, judiciary, and energy/natural resources committees.

After a month of hearings, the Republican chairs of those three committees – Orrin Hatch (Utah), Charles Grassley (Iowa) and Lisa Murkowski (Alaska) – co-sponsored a Senate bill called the “Puerto Rico Assistance Act of 2015.” Here is the bill, all 159 pages of it:

https://www.govtrack.us/congress/bills/114/s2381/text

The bill offers some minor assistance: a temporary reduction in payroll taxes and an “economic development” fund of $3 billion. But the real purpose of this bill is the installation of a six-member Financial Control Authority, that will rule over Puerto Rico.

According to this bill, five members will be appointed by the President of the U.S. The sixth member will be the Secretary of the U.S. Treasury, who will also serve as Chairman of the Authority. (p. 43) The Chair will have two votes on all matters, and the other five members will each have one vote. (p. 46)

What happened to Puerto Rico?

ABSOLUTE BUDGET POWERS AND POLITICAL CONTROL

Neither the Chair, nor any of the Authority members, will be accountable or liable to the government of Puerto Rico. (pp. 58, 61, 132)

The Authority will “re-structure the workforce of the Commonwealth government” (p. 37), reduce or freeze public pensions (pp. 9, 152), and ensure “the payment of debt obligations.” (p. 38)

It will also supervise the budget and finances of the entire Commonwealth government (p. 38), its pension system (pp. 39, 152), courts (p. 39), legislature (p. 39), public authorities (p. 42), and all leases, union contracts, and collective bargaining agreements. (p. 114)

The Authority will also make “recommendations” with respect to all of the financial affairs of Puerto Rico. This will include the salaries of all personnel, firing of workers, reduction of pensions, elimination of services, and the use of “alternative service delivery mechanisms, including privatization and commercialization.” (pp. 121-122)

If the governor or legislature of Puerto Rico resist any of these “recommendations,” the Authority can “take such action as it determines to be appropriate.” In other words, the Authority can implement any “recommendation” that it wants, regardless of the Puerto Rican government. (p. 125)

Anyone – public official or otherwise – who defies or obstructs the Authority will be found guilty of “criminal misdemeanor,” (p. 56) and will be subject to suspension without pay, and removal from office. (p. 57)

The Authority makes a “recommendation” to Puerto Rico

CREATION OF DEBT, WITH NO ACCOUNTABILITY

The Authority can also encumber the physical infrastructure of Puerto Rico.

It can issue debt – bonds, notes, or other obligations – and keep them in an escrow account, which it would make available to Puerto Rico “at such times as it considers appropriate.” (p. 127)

Alternatively, these funds could be used for “any other purpose that the Authority considers appropriate.” (p. 127)

In addition to issuing debt, the Authority will “pledge or grant a security interest in revenues to individuals or entities purchasing bonds, notes, or other obligations.” (p. 128) In other words, the physical infrastructure of Puerto Rico (highways, bridges, schools, prisons, electrical grid, water supply, public housing, prime coastal real estate) will all be available as “collateral” for the debt decisions of this Authority.

The Senate Bill is careful to mention that “the United States is not responsible for any principal or interest on any bond, note, or other obligation issued by the Authority” (p. 132). This means that Puerto Rico – its taxpayers and its physical infrastructure – will be solely and exclusively responsible for repayment of the Authority’s debt.

PUBLIC PROSECUTOR

The Authority will also have prosecutorial powers.

It is authorized to “conduct necessary investigations” into the government of Puerto Rico. (p. 37).

It is empowered to hold hearings, secure government records, demand evidence, take testimony, subpoena witnesses, and administer oaths (under penalty of perjury) to all witnesses. (pp. 51-52)

Anyone who fails to appear, refuses to testify, or withholds evidence, can be held in contempt of court. (pp. 54-55)

The result of any Authority investigation can lead to criminal and civil penalties – including, but not limited to, getting fired from your job. (pp. 56-57)

GOVERNOR ALEJANDRO GARCIA PAYASO

The governor of Puerto Rico, Alejandro Garcia Padilla, was recently reported as saying that “he would accept a federal fiscal oversight body, as long as it respects Puerto Rico’s autonomy.”

http://www.bondbuyer.com/news/washington-budget-finance/republican-senate-and-house-members-offer-bills-to-help-puerto-rico-1091434-1.html

It would thus appear, finally and forever, that the governor is a clown.

Governor Alejandro Garcia Payaso

This Financial Control Authority, aka the “Puerto Rico Financial Responsibility and Management Assistance Authority,” will be the governor, banker, judge, jury, and prosecutor of Puerto Rico.

It will manage the entire Puerto Rican economy.

It will be accountable to no one on the island.

It will extend the governor an occasional “allowance,” if and when it feels like it.

It will tell the entire Puerto Rican government what to do, when to jump, and how high.

It will do nothing about Jones Act reform, Chapter 9 bankruptcy relief, the privatization of the island’s public schools, or the hedge funds that will own the physical infrastructure of Puerto Rico – its schools, prisons, highways, electrical grid, and water authority.

It will issue debt, spend the funds in any manner it sees fit, and leave Puerto Rico to pay the bill.

This is where our “Commonwealth” relationship to the US has gotten us: a dictatorship in the Caribbean, created in Washington, operated from Wall Street, all disguised as a “management assistance authority.”

Congratulations, Gov. Alejandro Garcia Payaso.

You are now the headwaiter of La Fortaleza, catering parties for U.S. businessmen.

For a history of the War Against All Puerto Ricans, read the book…

Buy it Now

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