The Puerto Rico Oversight Board fired off two letters this month asserting its authority over the local legislature as its effort to oversee the economy and address the debt crisis ran into resistance from island lawmakers.
The tensions were spurred by a Feb. 1 letter from Puerto Rico economist Gustavo Vélez to the board, which complained about the legislature's hirings, including former Toa Baja Mayor Anibal Vega Borges as a consultant.
Vega Borges resigned his office on June 30 facing mounting constituent concern about the city's financial condition. The city government was forced to shut down in early November due to lack of money and it has remained shut since then. There was a federal raid on its offices in November to look into possible misuse of federal funds, according to the Metro Puerto Rico news website.
On Feb. 2 the board sent a letter to the governor's representative on the board, Elías Sánchez, asserting that it has many ways it can control the legislature even though Puerto Rico doesn't yet have a fiscal plan. The board pointed to sections 207 and 303 of the Puerto Rico Oversight, Management and Economic Stability Act that address the board's oversight of the government's handling of debt.
The board also pointed to PROMESA section 204(a)(1)-(2), which states, "Except to the extent that the oversight board may provide otherwise in its bylaws, rules, and procedures, not later than seven business days after a territorial government duly enacts any law during any fiscal year in which the oversight board is in operation, the governor shall submit the law to the oversight board."
PROMESA goes on to say that the submission is supposed to be accompanied by an independent entity's estimate of the law's cost. If the board finds the law inconsistent with the fiscal plan, the board can ask for it to be corrected or blocked.
In the board's Feb. 2 letter, it says its review of the laws "is independent of the existence of a certified fiscal plan." Since this PROMESA section is titled "Review of activities to ensure compliance with fiscal plan," this is unclear.
A staff person for a U.S. Representative involved in creating PROMESA said in an email that the law allows the board to review the Puerto Rico legislature's hiring practices as well as the laws and budgets it passes.
On Tuesday the board sent a second letter to Vélez saying, "we believe that all government entities need to do the utmost to reduce expenses, including those relating to professional service contracts, as soon as possible and as much as possible." The board also said it "is currently focused on the goal of certifying a ten-year fiscal plan for Puerto Rico."
Puerto Rico Gov. Ricardo Rossell- is supposed to submit a proposed fiscal plan covering government revenues and spending on Feb. 21. The board has given itself a deadline of March 15 for certifying the plan.
Senate President Thomas Rivera Schatz threatened to sue the Oversight Board if it attempts to exercise authority over the legislature, the El Vocero news website reported.
In addition to resistance from the legislature, the board has faced protests in the last few weeks by University of Puerto Rico students. And since the development of PROMESA, Puerto Rico lawyers have volunteered to represent those engaging in civil disobedience against the board.
