Two Puerto Rico control board members came under fire from local politicians and analysts, who said they should have been disqualified because of past connections to the government that created the island's $70 billion debt crisis.
Most of the criticism was leveled at Carlos García, former president of the Government Development Bank for Puerto Rico, who was among the seven people appointed Wednesday by President Obama.
The board, established under the Puerto Rico Oversight Management and Economic Stability Act, is to oversee and, if necessary, overrule Puerto Rico's local government. It will have the right, under certain circumstances, to petition a court for restructuring of Puerto Rico's public debt.
"Any person that has been involved in the government in the last 10 years, for effectiveness of the process, should be out of the process," Gustavo Velez, chairman of Inteligencia Econ-mica, an economic consulting firm based in Guaynabo, Puerto Rico. "We want people who were not indirectly or directly involved in this fiscal crisis."
García should resign, Velez said.
As president of the GDB, García oversaw the commonwealth's sales of bonds, in the administration of Gov. Luis Fortuño. During this administration's tenure from 2009 to 2013, Puerto Rico and its public corporations borrowed about $35.5 billion, mainly in bonds, according to Janney Fixed Income Strategy.
García helped bankrupt Puerto Rico and thus shouldn't be on the board, said Emilio Pantojas, professor at University of Puerto Rico.
"I was very, very surprised to see" the names of García and José Carrion III on the control board, Pantojas said. Carrion was a lower-level official in the Fortuño administration. Pantojas said he also may have a conflict of interest as the brother-in-law of Resident Commissioner Pedro Pierluisi. Pierluisi is a member of the New Progressive Party, and any connection between the control board and Puerto Rico's two main parties is a problem, Pantojas said.
"It is hard to see having the people who made the problem making the solution," said a Popular Democratic Party staff person in the Puerto Rico Senate. Fortuño was a member of the primary opposition party, the New Progressive Party.
Appointing García and Carrion was a political action, she said, and Fortuño was behind their appointment.
Fortuño was a Republican as well as NPP member. García was nominated by one of the U.S. Congress' Republican leaders under the procedure for appointing the board set up under PROMESA.
By sitting on the board García would be inappropriately affecting his own legacy, Velez said.
Another appointee to the control board, José Ram-n González, also led the GDB, Velez noted, though he last served in 1989.
According to the El Vocero news website, Puerto Rico Senate President Eduardo Bhatia Gautier and PDP candidate for resident commissioner Hector Ferrer have called for Obama and the U.S. Congress to remove García from the board. El Vocero reported the Melba Acosta Febo, who resigned at the end of July as GDB president, also voiced concerns about García.
According to the PROMESA law, Obama can remove board members for "cause." There is no mention of Congressional approval for removals.
U.S. Sen. Bernie Sanders, I-Vt., objected to the board on similar grounds to what Puerto Ricans are using concerning García. On Thursday he tweeted, "Disappointing to hear that Puerto Rico's fiscal control board will include some of the architects of the crisis."
García couldn't be reached and the Obama administration didn't respond to request for comment.
Jeffrey Zients, director of the National Economic Council and Assistant to the President for Economic Policy said in a blog the members had been carefully vetted, as required by PROMESA.
"These seven individuals bring a broad range of skills and expertise needed to tackle Puerto Rico's complex challenges and put the future of the Americans citizens in Puerto Rico first," he wrote. "A majority of the board members are Puerto Rican, reflecting the President's commitment to ensure that Puerto Ricans are well represented."
