Puerto Rico’s Cong rep hopes to amend debt crisis bill

San Juan / AP

Puerto Rican Gov. Alejandro Garcia Padilla warned late on Saturday that he would challenge in federal courts and before the “community of nations” any law that he said would nullify the U.S. territory’s Constitution by concentrating government power in a body not elected by the people.
Garcia Padilla was reacting to a draft of a U.S. House of Representatives bill aimed at addressing the island’s debt crisis. It has been widely criticized for creating a fiscal oversight board that would have ultimate authority over budget and fiscal matters, and would be immune from supervision by Puerto Rico’s governor and the legislature.
“If in exchange for the legal faculty for an orderly debt restructuring a supervision board is necessary, neither its point of departure nor its conclusion can be the assassination of Puerto Rican democracy,” the governor said.
Garcia Padilla said the bill acknowledged Puerto Rico’s need for the legal authority for an orderly restructuring of its debt and he expressed confidence that its final version will be substantially different from the “discussion draft” that will be publicly circulated next week. The governor spoke shortly after Resident Commissioner Pedro Pierluisi pledged to work with Republican and Democrat lawmakers to make changes to the draft so that the oversight board it creates supervises rather than controls the commonwealth government.
Puerto Rico’s representative to Congress said the legislation currently proposed would give too much power to the board and will keep it in place for too long. But he added that it was vital for Congress to pass legislation that establishes a process for fair debt restructuring accords between Puerto Rico and its creditors that the courts can enforce.
“If a bill does not become law, Puerto Rico and its creditors will almost certainly go over a cliff — together — this summer,” Pierluisi said. David Bernier, the gubernatorial candidate of the ruling Popular Democratic Party, said the debt proposal should be rejected because “in practice it liquidates the country’s governing institutions.”
Pierluisi agreed that certain provisions granted the proposed board were excessive, but he criticized island politicians for complaining about the proposal’s bad provisions while ignoring its good ones. He lauded the proposal’s debt restructuring provisions as a promising start.
“This bill can and will evolve,” Pierluisi said, adding that it was unreasonable to expect Congress to grant Puerto Rico debt restructuring authority without requiring fiscal oversight.
Puerto Rico has been lobbying Congress for bankruptcy authority since before Padilla declared last June its nearly $70 billion debt is not payable. It also sought to create its own bankruptcy law, which was overturned as unconstitutional by federal courts. The U.S. Supreme Court is reviewing those decisions.