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<h1 id="reader-title">Wall Street Vultures Descend On
Debt-Ridden Puerto Rico</h1>
<div id="reader-credits" class="credits">Michael Nevradakis</div>
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<p class="lsingle_excerpt font-6"> ‘Any “bailout” that might
occur … seems directed only at the Wall Street vultures
who now control most of the debt,’ Déborah Berman-Santana
tells MintPress News in a sprawling interview about the
debt crisis in Puerto Rico. </p>
<div class="lsingle_content font-6">
<p><b>ATHENS, Greece — </b><span>Despite only making
headlines in recent months, the economic crisis in
Puerto Rico has been developing and worsening for the
past several years, a crisis which has led to Puerto
Rico being dubbed “the Greece of the Caribbean.” </span><span><br>
</span><span><br>
</span><span>In this interview, Déborah Berman-Santana,
professor emeritus of geography and ethnic studies at
Mills College in Oakland, California, analyzes the
latest developments in Puerto Rico.</span></p>
<p><span>Berman-Santana is the author of “Kicking Off The
Bootstraps: Environment, Development, and Community
Power in Puerto Rico,” a detailed analysis of
“Operation Bootstrap,” a post-World War II industrial
program launched by the United States that was one of
the very first of its kind in the world. </span></p>
<p><span>Speaking to MintPress News, Berman-Santana
analyzes the long history of colonial exploitation of
the island, how the current economic crisis developed,
and why the latest “bailout” of the island is only a
bailout for the vulture investors who have taken
possession of much of Puerto Rico’s debt and who now
have their sights set on the island’s valuable assets
and resources. She also draws comparisons with the
economic crisis and subsequent “bailouts” that have
been seen in Greece, a country where she has spent
extensive time over the past year.</span></p>
<span id="add-57b63c56e7c35"> </span>
<p><b>MintPress News (MPN): Describe for us the history of
the economic exploitation of Puerto Rico. What has the
impact of colonialism been on Puerto Rico’s economic
viability?</b><b>
</b><b>
</b></p>
<p><b>Déborah Berman-Santana (DBS):</b><span> Colonies
exist so that the colonizer will benefit economically
and politically. Since the U.S. invaded and occupied
Puerto Rico in 1898, it has extracted profit in
numerous ways: First, through converting it into a
sugar colony. After World War II Puerto Rico was
transformed through “Operation Bootstrap” into a
special economic zone to benefit U.S. corporations
under the guise of “development via export-led
industrialization.” As a captive market, Puerto Rico
also became the home to the most Wal-Marts per square
meter in the world. Finally, Puerto Rico’s colonial
“neither U.S. state nor independent state” political
status allowed the U.S. bond market to give special
exemptions to investors, which has brought Puerto Rico
to its current debt “crisis.” </span><span><br>
</span><span><br>
</span><span>During the 1930s, the anti-imperialist
congressman Vito Marcantonio sponsored a study which
revealed that since 1898, U.S. corporations had
extracted as much as $400 billion in profits from
Puerto Rico. Recently, independent researchers in
Puerto Rico have estimated that since the 1950s, more
than half a trillion dollars has been extracted from
Puerto Rico. Both estimates encompass the free usage
of Puerto Rican resources and the restriction, via
U.S. cabotage laws, requiring all imports and exports
to use U.S. merchant marine ships and U.S. crews. It
would not be an exaggeration to say that the U.S. has
taken more than a trillion dollars away from its
colony, which certainly dwarfs Puerto Rico’s $73
billion public debt.</span></p>
<p><b>MPN: How did this ongoing exploitation contribute to
the present-day “debt crisis” in Puerto Rico, and what
has been the role of Washington, Wall Street, and the
“vulture funds” in perpetuating this crisis?</b><span><br>
</span><span><br>
</span><b>DBS: </b><span>With the eventual elimination
of industrial tax incentives beginning in the 1990s,
Puerto Rico’s governments increasingly looked to loans
to balance its budget and continue practices of
rewarding political cronies with contracts for large
infrastructure projects. Subsequently, President
Clinton’s elimination of the Glass-Steagall Act
allowed for investment bankers to increasingly engage
in bond market speculation. Puerto Rico received
“triple exemption” because of its colonial status,
which meant that every pension fund and every
municipal and state government, among others, bought
Puerto Rico bonds, ignoring the fact that its economy
began shrinking once the special industrial exemptions
were completely eliminated in 2006. </span><span><br>
</span><span><br>
</span><span>Election of a protégé of the Koch Brothers,
Luis Fortuño, as Puerto Rico’s governor in 2008
resulted in a “bitter medicine” law that eliminated
tens of thousands of public jobs, which accelerated
the descent of an economic recession into a
depression. By 2011 the major credit agencies began
degrading Puerto Rico’s ratings, with the result that
it increasingly resorted to short-term, high interest
loans similar to “payday loans.” Bondholders
increasingly unloaded their Puerto Rico bonds in the
secondary bond market, which were then swooped up by
vulture funders such as Paul Singer and John Paulson –
often at 10 to 20 percent of the bond’s value. Today,
these vulture funders possess up to 50 percent of
Puerto Rico’s public debt, and are the creditors who
are least willing to renegotiate the terms of the
loans. They have been the major lobbyists for the
Congressional law known as “PROMESA” that recently
became law.</span></p>
<p><b>MPN: “PROMESA” been touted by some as a “bailout”
for Puerto Rico. What does this bill mean for Puerto
Rico, in your view, and what is the significance of
the acronym “PROMESA”?</b><span><br>
</span><span><br>
</span><b>DBS: </b><span>The new law, which President
Obama signed on June 30, is entitled the “Puerto Rico
Oversight, Management, and Economic Stability Act”
(PROMESA). In Puerto Rican popular parlance, a
“promesa” is a pledge that someone makes when dealing
with a family crisis. The person promises to do
something for the community if the crisis is resolved.
Often this is an annual fiesta, including traditional
music, food and drink, and may last for decades. That
the U.S. Congress would give this name to a law that
strips away any pretense of self-governance, [it] has
caused a tremendous amount of resentment in Puerto
Rico.</span><span><br>
</span><span><br>
</span><span>This law allows President Obama to appoint
a seven-member board — paid for by the Puerto Rican
people — which will take control of the budget,
eliminate environmental laws, dismiss public
employees, abolish public agencies, cut the minimum
wage by half for young workers, close schools and
hospitals, increase utility bills, and cut pensions.
These measures are justified by the priority of making
payments on the public debt. There is no provision for
economic development or restructuring of the public
debt, let alone canceling it. There is no
acknowledgment that such measures are likely to
greatly increase emigration of working age Puerto
Ricans while severely deteriorating quality of life
for those who remain. Any “bailout” that might occur
as a result seems directed only at the Wall Street
vultures who now control most of the debt.</span></p>
<p><b>MPN: Much has been written about the economic crisis
in Puerto Rico recently, including a report by the
Committee for the Abolition of Illegitimate Debt
(CADTM). What do you make of these reports, and were
any Puerto Rican economists given the opportunity to
provide their own input?</b><span><br>
</span><span><br>
</span><b>DBS: </b><span>CADTM’s article was odd in
that there did not appear to be any effort to read up
or try to understand Puerto Rico, but simply to use
information from Europe and change names where needed.
For example, it referred to Puerto Rico as a member of
the “Commonwealth of the United States,” an entity
that does not exist (unlike, for example, the British
Commonwealth). Puerto Rico is defined by the U.S. as a
“territory belonging to, but not part of, the United
States”, with not a single iota of sovereignty. A
White House report on Puerto Rico in 2006 claimed that
the U.S. could give Puerto Rico away to another
country should it choose to do so. The term
“commonwealth” is used for Puerto Rico to give the
illusion that Puerto Rico achieved some form of
self-governance in 1952, which resulted in the United
Nations removing it from their list of colonies. There
has been a movement to get Puerto Rico reinstated to
that list for decades.</span><span><br>
</span><span><br>
</span><span>Another weakness of CADTM’s analysis was
its use of secondary sources of statistics about
Puerto Rico, such as the Pew Foundation, instead of
Puerto Rico’s own government, or any of several Puerto
Rican independent research institutes. Perhaps most
egregious of all is that it does not mention the fact
that, as a colony with no sovereignty, all of Puerto
Rico’s public debt may be considered illegal. One
might presume that an international organization
dedicated to cancellation of debt would know that it
was the successful insistence by the U.S. in 1898 that
Cuba did not need to pay any of its debts because they
were contracted by Spain, that helped shaped the
concept of odious debt. I am not sure of the purpose
of CADTM’s article — I hesitate to call it a “report”
— other than to jump on the Puerto Rico misinformation
bandwagon. </span></p>
<p><b>MPN: In what ways has the colonial administration of
Puerto Rico made the island economically dependent on
the United States, and how does this dependency impact
the national psyche of Puerto Ricans?</b><span><br>
</span><span><br>
</span><b>DBS: </b><span>There used to be a geography
book, written by a North American named Muller, which
was the first textbook studied in all Puerto Rican
schools. The first sentence read: “Puerto Rico is a
small, overpopulated, poor island, lacking in natural
resources, which cannot survive without the United
States.” Puerto Rico has served as a laboratory for
generations of U.S. academics, most of whom were
awarded government and foundation grants to prove that
Puerto Rico and its people were geologically,
biologically, and socially inferior. Their claims were
often absurd, such as that Puerto Ricans were afraid
of the sea and that there [are] hardly any fish in the
surrounding Caribbean — both of which could easily be
disproved — or that somehow Puerto Rico’s rich soils
could not feed the population, which was not the case
until most arable land was diverted to sugar cane and
later covered in cement for the industrialization
strategy. </span><span><br>
</span><span><br>
</span><span>Puerto Ricans were constantly told to look
to the U.S. for all sources of innovation and
progress, and warned that independence would be
economically and socially disastrous. A favorite
slogan was, “Where would we be without her?” alongside
the U.S, flag. Never mind that all of the disastrous
economic and social consequences about which we were
warned, have occurred precisely because of our
colonial relationship to the U.S. You simply cannot
extract the amount of profits from a country that the
U.S. has taken from Puerto Rico, plus restrict our
ability to protect our own resources or capital, and
expect to have a positive economic result.</span></p>
<p><b>MPN: Describe for us the political system of Puerto
Rico, the major political parties and to what extent
the island enjoys “self-governance.”</b><span><br>
</span><span><br>
</span><b>DBS: </b><span>For the first 50 years after
the U.S. invasion of Puerto Rico, the president named
a governor and most directors of government agencies.
Since the establishment of the “Associated Free State”
(commonwealth) in 1952, Puerto Rico has elected its
own governor and legislature, as well as a non-voting
representative to the U.S. Congress. Elections are
held every four years. The two majority parties are
the pro-statehood New Progressive Party (PNP) and the
Popular Democratic Party (PPD), which favors the
current status with greater autonomy. The Puerto Rican
Independence Party (PIP), once the second-largest
party, has been relegated by decades of political
repression and extreme factionalism among
pro-independence and left organizations to the status
of a small party that barely manages to elect some
representatives at municipal and island-wide levels.
There is also a Puerto Rican court system, using only
Spanish and based on Roman law, as is true of Latin
American countries, which, however, is subordinate to
the English-only U.S. federal court, located in the
U.S. federal building in San Juan, a concrete
reinforced stronghold that is the official seat of
U.S. colonial rule.</span><span><br>
</span><span><br>
</span><span>The Puerto Rican government has not had the
power to truly protect local businesses against
product dumping from U.S. companies, nor to make
economic treaties with other countries without U.S.
approval. However, it has had control over its budget
and taxes, which both majority parties have used to
curry political favor with contractors and corporate
sponsors. This has encouraged a culture of corruption,
which would appear to confirm the dominant narrative,
that Puerto Ricans lack the capacity to properly
govern themselves. But at no time since 1898 has any
Puerto Rican government been able to exercise
sovereign decision-making against the wishes of
Washington. That the so-called “commonwealth” did not
change its status was confirmed by two rulings of the
U.S. Supreme Court in June, one of which dealt with
Puerto Rico’s exemption from use of Chapter 9
bankruptcy while at the same time nixing its
government’s attempt to write its own bankruptcy law.
Briefly, the Supreme Court affirmed that Puerto Rico
lacked even the limited sovereignty that a U.S. Indian
tribe might possess, and that Puerto Rico’s
constitution had about as much validity as the Puerto
Rican peso had after the U.S. takeover. In addition,
President Obama said that “there is no alternative” to
the PROMESA bill and the imposition of a junta, which
of course means that Puerto Rico’s elected government,
laws, and constitution mean nothing.</span></p>
<p><b>MPN: What do you make of the recent visit of Bernie
Sanders to Puerto Rico?</b><span><br>
</span><span><br>
</span><b>DBS: </b><span>Sanders’ primary campaign
strategy was to attract independents to vote for him
in the primaries. Even though Puerto Ricans and other
residents of U.S. colonies do not vote for president
and have no voting representation in Congress, they do
have delegates to the Democratic and Republican
conventions and so usually hold primaries. By far the
largest of the colonies in terms of population is
Puerto Rico, and so Sanders’ strategy was to encourage
</span><i><span>independentistas</span></i><span> —
supporters of independence who do not vote in U.S.
primaries — to vote for him. In his congressional
career Sanders had never appeared to be aware of
Puerto Rico’s existence, yet suddenly he was promoted
as a “savior” who would decolonize Puerto Rico, all
based upon his criticism of Wall Street and a supposed
reputation as a “radical leftist.” Sanders never could
bring himself to mention the “c” word — colony — when
speaking about his country’s relationship with Puerto
Rico. More than once he referred to Puerto Rico as a
“protectorate,” and his harshest words accused
Washington of using the PROMESA bill to “treat Puerto
Rico as a colony” — without, of course, admitting that
Puerto Rico already is a colony! Unfortunately,
colonies foster colonized mentalities, so Sanders did
manage to divide </span><i><span>independentistas</span></i><span>
yet again, when what is most needed at this time is
unity. </span></p>
<p><span>Sanders introduced an alternative bill to PROMESA
in the Senate after PROMESA had already been approved
by the House of Representatives and endorsed by Obama,
so his bill did not even get a hearing. The proposed
bill itself was a hodgepodge of measures that may have
been marginally better in economic terms, but it also
included a section on holding yet another referendum
on political status — though at least five have
already been held. It provided detailed instructions
on how to fast-track statehood, should that option
win, but nothing about U.S. responsibility for
ensuring free determination and indemnification for
eventual independence. I should also add that many
U.S. politicians, from George Bush and Ted Kennedy to
Hillary Clinton and Barack Obama, have made
extravagant promises while campaigning for Puerto
Rican delegates to their parties’ conventions. In sum,
Sanders used Puerto Rico exactly as have other U.S.
politicians before him. </span></p>
<p><b>MPN: How is the issue of independence viewed in
Puerto Rico and how has Washington typically responded
to the independence movement?</b></p>
<p><b>DBS: </b><span>There have been independence
movements in Puerto Rico ever since the 19th century,
when Spain was still the colonial power. Since the
1898 invasion, Washington has combined violent
repression of independence groups with selective
co-option of broad sectors of Puerto Rican society,
using church officials and entrepreneurs, politicians
and civil society leaders to divide Puerto Ricans
against each other while promoting Uncle Sam as
benefactor. Neighbors were paid to spy and report on
every aspect of the lives of independence supporters,
while many lost their jobs or were expelled from
universities. Leaders were often arrested on a variety
of charges, and many served long prison sentences. Not
even leaving Puerto Rico for the diaspora exempted
them from persecution. For example, Oscar López Rivera
is currently imprisoned, having served 35 years of a
55-year sentence for “seditious conspiracy to
overthrow the U.S. government and its territories” —
in other words, for struggling for Puerto Rican
independence. Oscar grew up in Chicago, and has not
been accused nor convicted of any violent act, yet his
refusal to defend himself in a U.S. criminal court,
and demand that he be tried as a political prisoner in
an international tribunal helped lead to such a
disproportionately long sentence.</span><span><br>
</span><span><br>
</span><span>Puerto Ricans as a whole do not support
independence, at least not openly, because they have
been taught that Puerto Rico has no choice but to be
associated with the U.S., either as a state or in some
kind of autonomous association. Yet every single
environmental, social, political and cultural struggle
and campaign has had independence supporters as key
members. Puerto Rican pride and self-identification
with a Puerto Rican nationality is much broader than
open support for independence. It is obvious in
sports, in music, in cultural celebrations, even in
jokes and everyday life. Even many statehood
supporters will often refer to Puerto Rico as their
nation, as contradictory as that may sound to
outsiders. Especially given the recent actions of the
U.S. government — and the realization by many Puerto
Ricans that Uncle Sam does not have their best
interests in mind, it would be interesting to see if
support for independence would increase, should a
serious proposal include some indemnification by the
U.S. for over a century of colonial rule.</span></p>
<p><b>MPN: The PROMESA bill has triggered a wave of
demonstrations in Puerto Rico. How are these protests
taking shape?</b><b><br>
</b><b><br>
</b><b>DBS: </b><span>As soon as Obama signed the bill,
a number of organizations set up a “civil disobedience
encampment” in front of the main entrance to the
federal building in San Juan. This is a very common
feature of activism in Puerto Rico, as it serves as a
semi-permanent focus for education, organizing, and
resistance, and has been used to block environmentally
dangerous projects as well as the U.S. Navy’s former
bombing range on Vieques Island. The encampment has
been continuously occupied since the end of June, and
is a focus for seminars, cultural events, picketing,
and “community building.” For now, the Puerto Rican
police have said they do not plan to remove the
protesters, although federal agents often conduct
provocative actions, such as blasting diesel
generators near the tents and walking bomb-sniffing
dogs through the encampment. </span></p>
<p><span>Other protests include a massive and broad-based
movement against a plan by the U.S. government to use
military planes to fumigate all of Puerto Rico with
dangerous pesticides, supposedly to kill mosquitos
carrying the Zika virus. To this are added a large
number of ongoing protests and campaigns, all of which
now refer to the coming </span><i><span>junta de
control</span></i><span> as possibly complicating
even more the scenario. Activists in the large Puerto
Rican diaspora also hold seminars and stage protests,
many times in coordination with the groups in Puerto
Rico. Of course, most Puerto Ricans are not
protesters, and [they] try to go about their daily
lives while listening with alarm, resignation, or both
to the news. Puerto Rican activist organizations face
many challenges as they try to work through
decades-long factionalism and develop more effective
ways to educate the public. Most of all, the challenge
is to not burn out, and convince others that there is
hope!</span></p>
<p><b>MPN: Describe the difficulties in forming alliances
in Puerto Rico today, within such a fractured and
divided political landscape.</b></p>
<p><b>DBS: </b><span>Pro-independence organizations in
Puerto Rico have always suffered from severe
repression, including efforts by the colonizers — both
Spain and the U.S. — to infiltrate and divide them.
Some of the earliest campaigns by the FBI upon its
establishment in 1908 included the criminalization and
repression of independence activism in Puerto Rico,
and such activities continue today. Recent examples
include grabbing well-known activists in the street
and forcing them to give DNA samples for supposed
“ongoing terrorism investigations.” This operation
included activists who had previously been imprisoned,
and for whom the U.S. government would already have
had DNA samples. This is just one example of a
century-long campaign of repression that has included
murders, disappearances, long incarceration,
blacklisting, and spying. The Puerto Rican government
has also been complicit in the criminalization of
independence, including creating discord among
activists and organizations. </span><span><br>
</span><span><br>
</span><span>However, we cannot simply blame outside
forces for the divided state of independence and left
activism. Besides the personal antagonisms — many of
which are due to the same societal ills that afflict
leftist organizations, such as sexism — there are also
ideological disputes, such as the roles of nationalism
and socialism in colonial struggles. One new political
party, for example, declines to take a position on
Puerto Rican political status even though most of its
leaders have been identified as independentistas. They
expect that by doing so they can attract pro-statehood
workers to vote for them. I would argue that it would
repel more statehood supporters, because they would be
seen as dishonest. Of course, this divides the votes
of those who no longer want to vote for the two
majority parties. The Puerto Rican Independence Party
is running a full slate of candidates and is trying to
position itself as the alternative. But they have in
the past been quite sectarian and have alienated many
independentistas. Despite such divisions, we have seen
many activities that include representatives of both
parties, as well as other independence and left
organizations. This indicates that many understand
that somehow we need to overcome our divisions, if not
our disagreements.</span></p>
<p><b>MPN: Puerto Rico has often been described as the
“Greece of the Caribbean.” You have had the
opportunity to visit Greece twice in the past year.
How similar are the crises in the two nations in your
view?</b></p>
<p><b>DBS: </b><span>I would say they are strikingly
similar, and in fact that the same playbook is being
used in both countries, despite the differences
between them. For example, the acronym TINA, “There Is
No Alternative” to continued policies of austerity,
privatization, and increased taxes in order to pay off
an unsustainable public debt, is constantly repeated,
as is the myth that “There is no Plan B,” and that
political independence for both (in Greece’s case,
leaving the European Union and the eurozone) would be
disastrous — as if U.S. and EU colonial rule is not
already a disaster! In Greece there is already a</span><i><span>
junta de control fiscal</span></i><span> named by
the EU which must approve — and often even write —
laws that the Greek government must implement, such as
automatic budget cuts and further privatizations.
While as a classic colony Puerto Rico cannot
officially deal with the IMF, in practice the PROMESA
bill follows the IMF playbook, as was prescribed by
“former” IMF officials who were hired by the Puerto
Rican government — as ordered by their masters in
Washington — to produce a report with recommendations
for dealing with the debt crisis. In addition, you see
“vulture capitalists” such as Paul Singer and John
Paulson swooping into both Greece and Puerto Rico to
buy up assets such as banks and land, plus debt — at a
discount. The fact that Puerto Rico is a classic
colony actually makes the problems of lack of
sovereignty much clearer. Greece is still officially
an independent country, so for some people its </span><i><span>de
facto</span></i><span> colonial status may not be
quite as clear. Also, the problem of equating national
sovereignty with fascism is particularly acute in
Greece as a European country. In Puerto Rico we have
some of that confusion, but it is not as strong since
in general Latin Americans, including Puerto Ricans,
understand the necessity for national sovereignty as
part of anti-colonial struggles.</span></p>
<p><b>MPN: In your view, what is the best solution for
Puerto Rico and its people, economically and
politically?</b></p>
<p><b>DBS: </b><span>The international community
recognizes the right of all peoples to
self-determination, including freely and unilaterally
choosing their political status. There are three
recognized statuses: first, union with another
independent state under conditions of equality;
second, association with another state, with the right
to unilaterally change its status; and independence.
The U.S. has historically added new states whose
native populations have been reduced to a small and
powerless minority. The three Associated Republics of
Micronesia complain of a lack of sovereignty and the
unwillingness of the U.S. to renegotiate their
compacts. There is zero interest in the U.S. to add a
new state comprised of Spanish-speaking people with a
distinctly different culture, and which additionally
has a per capita income less than half of Mississippi,
the poorest state in the Union. I believe that
political independence represents the only possibility
for Puerto Rico to exercise its sovereignty, and it
should be accomplished — with international pressure —
as part of a negotiation that includes indemnification
for more than a century of colonial exploitation.
Certainly, Puerto Rico’s colonial debt belongs to the
colonizer. Far from seeing independence as
“separation,” I would argue that it would actually
open up Puerto Rico to the rest of the world, instead
of being chained behind the iron curtain of U.S. rule.
There is a saying in Latin America that its
independence will not be complete without Puerto Rico,
and I believe that time is now.</span><span><br>
</span></p>
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