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<span class="sep"> </span><a
href="http://www.latinorebels.com/2016/02/04/a-new-caribbean-dictatorship-puerto-ricos-financial-control-authority/"
title="9:30 am" rel="bookmark"><time class="entry-date"
datetime="2016-02-04T09:30:17+00:00">February 4, 2016</time></a><span
class="byline"> <span class="sep"> by </span> <span
class="author vcard"><a class="url fn n"
href="http://www.latinorebels.com/author/nelsondenis/"
title="View all posts by Nelson A. Denis" rel="author">Nelson
A. Denis</a></span></span>
<h1 class="entry-title">A New Caribbean Dictatorship: Puerto Rico’s
Financial Control Authority</h1>
<div class="entry-content post-content">
<div id="attachment_34731" style="width: 645px" class="wp-caption
aligncenter"><b><small><small><small><a class="moz-txt-link-freetext" href="http://www.latinorebels.com/2016/02/04/a-new-caribbean-dictatorship-puerto-ricos-financial-control-authority/">http://www.latinorebels.com/2016/02/04/a-new-caribbean-dictatorship-puerto-ricos-financial-control-authority/</a></small></small></small></b><br>
<p class="wp-caption-text">Castillo San Felipe del Morro, the
16th-century citadel overlooking San Juan Bay in Puerto Rico
(Harvey Barrison/<a
href="https://www.flickr.com/photos/hbarrison/12332738364/in/photolist-jMNvs5-jMKp38-drLuTz-ivbxxp-aedu9c-aedvLn-cyJaAs-93Yz9y-kzcCSj-95wtkF-9neEzZ-pMhq9N-pK7PhY-c3TDHS-aQDtYV-AdM7wG-95wr4H-zWqWFa-jHX4KE-aPTJV2-7iL6ac-aqVisw-jL2wEb-95hyJw-4TbYK8-jMmYrZ-jMH9AL-8X1LWm-pYRZGP-95zmEq-jMuNJq-iv7cwj-ivbsuD-ivc14i-iv7fFq-ivbULN-jMtuLx-jMHox3-jMvaow-jMEv2x-aegiaf-aegiT9-rz4uVU-95zrNq-95hxnf-jMnqxA-jMnono-jMnEAV-jMsDRk-jMyADX"
onclick="_gaq.push(['_trackEvent', 'outbound-article',
'https://www.flickr.com/photos/hbarrison/12332738364/in/photolist-jMNvs5-jMKp38-drLuTz-ivbxxp-aedu9c-aedvLn-cyJaAs-93Yz9y-kzcCSj-95wtkF-9neEzZ-pMhq9N-pK7PhY-c3TDHS-aQDtYV-AdM7wG-95wr4H-zWqWFa-jHX4KE-aPTJV2-7iL6ac-aqVisw-jL2wEb-95hyJw-4TbYK8-jMmYrZ-jMH9AL-8X1LWm-pYRZGP-95zmEq-jMuNJq-iv7cwj-ivbsuD-ivc14i-iv7fFq-ivbULN-jMtuLx-jMHox3-jMvaow-jMEv2x-aegiaf-aegiT9-rz4uVU-95zrNq-95hxnf-jMnqxA-jMnono-jMnEAV-jMsDRk-jMyADX',
'Flickr']);" target="_blank">Flickr</a>)</p>
</div>
<p>On December 9, 2015, Senator Orrin Hatch (R–UT) introduced <a
href="https://www.congress.gov/114/bills/s2381/BILLS-114s2381is.pdf"
onclick="_gaq.push(['_trackEvent','download','https://www.congress.gov/114/bills/s2381/BILLS-114s2381is.pdf']);"
target="_blank">Senate Bill 2381</a>, the “Puerto Rico
Assistance Act of 2015.” It offers minor assistance: a temporary
reduction in payroll taxes and a “development fund” of $3
billion. The <em>real</em> purpose of this bill is the
installation of a six-member Financial Control Authority, which
will rule over Puerto Rico.</p>
<p>According to this bill, five members will be appointed by the
U.S. president. The sixth will be the secretary of the U.S.
Treasury, who will also serve as chairman. The chair will have
two votes on all matters, and the other five members will each
have one.</p>
<p><strong>Absolute Budget Powers and Total Control</strong></p>
<p>This “Authority” will not be accountable to the government of
Puerto Rico. It will unilaterally “re-structure the workforce of
the Commonwealth government,” freeze public pensions, and ensure
“the payment of debt obligations.”</p>
<p>It will supervise the finances of the entire commonwealth
government, legislature and courts, public authorities, pension
system, and all leases, union contracts and collective
bargaining agreements.</p>
<p>It will also make “recommendations” on <em>all</em> the
financial affairs of Puerto Rico, including all personnel
salaries, firing of workers, reduction of pensions, elimination
of services, and the use of “alternative service delivery
mechanisms, including privatization and commercialization.”</p>
<p>If the governor or legislature resists any of these
“recommendations,” the Authority can “take such action as it
determines to be appropriate.” In other words, it can ignore the
insular government, and implement any “recommendation” it wants.</p>
<p>Anyone — public official or otherwise — who defies or obstructs
the Authority, will be guilty of “criminal misdemeanor” and
subject to suspension without pay and removal from office.</p>
<p><strong>Creation of Debt, With No Accountability</strong></p>
<p>The Authority can also encumber the physical infrastructure of
Puerto Rico. It can issue debt — bonds, notes or other
obligations — hold it in an escrow account, and lend it to
Puerto Rico “at such times as it considers appropriate.”
Alternatively, these funds could be used for “any other purpose
that the Authority considers appropriate.”</p>
<p>The Authority will “grant a security interest in revenues to
individuals or entities purchasing bonds, notes, or other
obligations.” In other words, the physical infrastructure of
Puerto Rico (highways, bridges, schools, prisons, electrical
grid, water supply, public housing, prime coastal real estate)
will be held as “collateral” for the debt decisions of this
Authority.</p>
<p>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.” Thus Puerto
Rico — its taxpayers and its physical infrastructure — will be
solely and exclusively responsible for repayment of the
Authority’s debt.</p>
<p><strong>Public Prosecutor</strong></p>
<p>The Authority will also have prosecutorial powers. It is
authorized to “conduct necessary investigations” into the
government of Puerto Rico, empowered to hold hearings, secure
government records, demand evidence, take testimony, subpoena
witnesses, and administer oaths — under penalty of perjury — to
all witnesses.</p>
<p>Anyone who fails to appear, refuses to testify, or withholds
evidence, can be held in contempt of court. The result of any
Authority investigation can lead to criminal and civil penalties
— including, but not limited to, getting fired from your job.</p>
<p><strong>Dictatorship in the Caribbean</strong></p>
<p>The governor of Puerto Rico, Alejandro García Padilla, <a
href="http://www.bondbuyer.com/news/washington-budget-finance/republican-senate-and-house-members-offer-bills-to-help-puerto-rico-1091434-1.html"
onclick="_gaq.push(['_trackEvent', 'outbound-article',
'http://www.bondbuyer.com/news/washington-budget-finance/republican-senate-and-house-members-offer-bills-to-help-puerto-rico-1091434-1.html',
'recently stated']);" target="_blank">recently stated</a> that
“he would accept a federal fiscal oversight body, as long as it
respects Puerto Rico’s autonomy.”</p>
<p>The governor is confused. This Authority will <em>be</em> the
governor, banker, judge, jury and prosecutor in Puerto Rico. It
will manage the entire Puerto Rican economy, and be accountable
to no one on the island. It will extend the governor an
occasional “allowance,” at its own whim and discretion. It will
tell the entire Puerto Rican government what to do, when to
jump, and how high.</p>
<p>It will do nothing about <a
href="http://www.latinorebels.com/2015/04/27/how-to-end-puerto-ricos-public-debt-right-now/"
target="_blank">Jones Act reform</a>, <a
href="http://www.latinorebels.com/2016/02/03/rep-gutierrez-to-congress-take-the-heel-off-the-people-of-puerto-rico-video/"
target="_blank">Chapter 9 bankruptcy relief</a>, 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 as it sees fit, and leave Puerto
Rico to pay the bill.</p>
<p>This is where our “Commonwealth” relationship has gotten us: a
dictatorship in the Caribbean, created in Washington, operated
from Wall Street, all disguised as a “management assistance
authority.”</p>
<p>As the leader of the free world, the U.S. can do better than
this.</p>
<p style="text-align: center;">***</p>
<p><em><b>Nelson A. Denis</b> served in the New York State
Assembly, and is the author of </em>War Against All Puerto
Ricans<em> (Nation Books, 2015). You can follow him on Twitter <a
href="https://twitter.com/NelsonADenis"
onclick="_gaq.push(['_trackEvent', 'outbound-article',
'https://twitter.com/NelsonADenis', '@NelsonADenis']);"
target="_blank">@NelsonADenis</a>.</em></p>
</div>
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