Group seeks ouster of Matosantos from Puerto Rico Oversight Board

Register now

Ana Matosantos, the only member of the Puerto Rico Oversight Board with a background in government budget management, has come under fire for alleged ethics violations over her financial interests in the island's renewable energy industry.

The National Legal and Policy Center told Attorney General Jeff Sessions in a letter this week that Matosantos should be removed from her position for participating in decisions concerning the Puerto Rico Electric and Power Authority despite those interests.

According to the Puerto Rico Oversight, Management and Economic Stability Act, which led to the formation of the board, board members are bound by U.S. Code 18 that bars federal officials from involvement in matters in which they have financial interests.

The center, which says it's devoted to "promoting ethics in public life," previously called attention to "corporate cowards" that abandoned the National Rifle Association following the Parkland school shooting, and took Apple CEO Tim Cook to task for failing to criticize his "communist partners" in China.

In this case, the center pointed to the board’s vote in June 2017 that rejected the PREPA restructuring deal reached with creditors and put the authority into Title III bankruptcy.

“It was the only non-unanimous vote the oversight board has made and the actual votes by each board member are not known,” the center said in its letter to Sessions sent Monday. “But the result of that vote placed Ana Matosantos in a clear conflict of interest due to her financial interests related to PREPA.”

Both the subsequent “privatization of PREPA and the [increased] renewable energy goal are potential windfalls for Matosantos Commercial Corporation and its related entities and beneficial owners."

Matosantos didn’t respond to an inquiry for this story. However, the board’s general counsel, Jaime El Koury, provided a statement: “The board takes the issue of conflicts of interest very seriously. We have implemented a robust system of financial disclosures (which are made available to the public) and ethics advisor monitoring to ensure conflicts of interest are identified and avoided.

“Our process is not based on speculation but on facts. Since her appointment to the board, Ms. Matosantos has disclosed her interests in MCC and Glegloma Realty and no conflict has been found,” El Koury concluded.

The policy center told Sessions that the Matosantos Commercial Corp. owns a solar energy generation farm in Vega Baja, Puerto Rico, that could benefit from PREPA’s privatization.

The center says that Matosantos is also the beneficial owner of Organic Power LLC, which is in the business of generating renewable energy using organic material. A Puerto Rico Industrial Development Co. resolution allowing Matosantos-owned Glegloma Realty to sell land to Organic Power so the latter could build an organic material power plant said the plant project would require a $10.7 million investment from the “Matosantos group of companies.”

PRIDCO is a Puerto Rico government-owned body.

In June 2017 the board rejected a PREPA fiscal plan that planned for, among other things, renewable sources of energy to go to 18% of generation in fiscal year 2026 from 3% in fiscal year 2018. The latest version of PREPA’s fiscal plan calls for renewable sources to reach 20% to 25% of electrical supply in fiscal year 2023. The board is planning on certifying a new PREPA fiscal plan by April 20.

The policy center asks Sessions to petition a United States District Court judge to remove Matosantos from the board during the attorney general’s investigation.

The policy center also says that if she is found guilty of breaching conflict of interest laws, she should be removed from the board permanently and the attorney general should consider imposing other penalties. According to PROMESA, only President Donald Trump could remove Matosantos from the board and only if there was a “cause.”

Matosantos worked as director of the California Office of Finance in the administration of former governor Arnold Schwarzenegger and is the only Oversight Board member with extensive experience overseeing government spending.

Matosantos declared she was a board member of the Matosantos Commercial Corp. her board financial disclosure for Dec. 31, 2016. She said she earned less than $200 a year from this position, though her ownership of the corporation was worth more than $1 million.

Her subsequent disclosures have not indicated a change in this ownership.

In the financial disclosure she also indicated her ownership of Glegloma Realty, which is described as a property manager for Matosantos Commercial Corp. She valued her ownership of Glegloma at between $500,001 and $1,000,000.

Her subsequent disclosures to the board haven’t indicated any change in these relationships to MCC or Glegloma. There is no mention of Organic Power LLC.

For reprint and licensing requests for this article, click here.
PROMESA Corporate ethics Commonwealth of Puerto Rico University of Puerto Rico Puerto Rico Employees Retirement System Puerto Rico Industrial Development Co Puerto Rico Aqueduct & Sewer Authority Puerto Rico Electric Power Authority Puerto Rico Public Buildings Authority Puerto Rico Infrastructure Financial Authority Puerto Rico Highway & Transportation Authority Puerto Rico Public Finance Corporation Puerto Rico Sales Tax Financing Corp (COFINA) Government Development Bank for Puerto Rico Puerto Rico Washington DC