Regional News

Disquiet in Puerto Rico

Puerto Rico Senate President Kenneth McClintock yesterday criticized Standard & Poor's and Moody's Investors Service for holding meetings with administration officials regarding the island's $9.48 billion fiscal 2009 budget, which the legislature passed on Monday and now sits on Gov. Anibal Acevedo Vila's desk.

McClintock said he believes the governor's signature on the fiscal 2009 plan now rides on what the credit rating agencies have to say about the operating budget, a relationship that the senate president does not support.

"I think it would be highly improper for them to be holding meetings about the policy-making process," McClintock said. "Once you've established a policy in the context of pending bond issues, you can comment about government policies, but they should not be involving themselves at this stage of the game by providing advice to the governor on whether he should sign or not sign the budget ... they should really try to avoid becoming a political pawn in their relationship between the governor and the legislative branch."

Maria Rosario, spokeswoman for the Government Development Bank for Puerto Rico, the island's financial adviser, confirmed that GDB officials met with ratings analysts yesterday to discuss the fiscal 2009 budget, which began July 1. The GDB was not able to immediately respond to McClintock's criticisms about the delayed budget signing.

An Acevedo Vila spokeswoman, Juanita Colombani, referred all questions to the GDB.

McClintock sent a letter to both Standard & Poor's and Moody's, indicating that it is not the typical policy of credit rating agencies to evaluate government budgets before they are approved and he urged the two agencies to include legislative leaders in any such meetings. Fitch Ratings does not rate the Commonwealth.

The Senate president said neither the governor nor a member of the administration has directly told him that Acevedo Vila will not sign the budget without Moody's and Standard & Poor's blessing, but McClintock said he feels the governor is waiting to sign the budget depending upon yesterday's meeting.

"I can't give you a direct quote, but that's basically what they've been saying," McClintock said. "And that's not the job of S&P and Moody's, and I think that they've been around long enough to know that whenever you're going to have a meeting regarding Puerto Rico, whenever you don't have the legislative point of view present, you're not getting the full story."

Moody's spokesman Tom Lemmon declined to comment on the meeting. Standard & Poor's was not able to immediately respond to messages.



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