Puerto Rico Gov. Ricardo Rosselló sharply attacked U.S. Rep. Rob Bishop (R-Utah) for advocating that the Oversight Board take over the island’s government and increase its focus on bondholder concerns.
On Friday House Natural Resources Committee Chairman Rob Bishop delivered a letter to the Puerto Rico Oversight Board criticizing the board for lack of dialogue with the creditor community, calling for more aggressive action to make structural and fiscal changes in Puerto Rico, and suggesting the board take steps to end the local government’s separate legal representation in the Title III bankruptcy cases. Bishop is the leader of the U.S. House of Representatives committee overseeing Puerto Rico.
In response, late on Monday Rosselló released the 13 page letter to Bishop that stated, “Your letter is truly disturbing in its reckless disregard for collaboration and cooperation in favor of an anti-democratic process akin to a dictatorial regime imposing its will by imperial fiat and decree.”
“I cannot and will not permit you to elevate concerns of bondholders on the mainland above concern for the well-being of my constituents,” the governor also stated.
Rosselló said that he had three main criticisms of the Bishop letter.
First, contrary to its claims, the board doesn’t have the legal right to “take over the role of the elected government of Puerto Rico.”
Second, his government “recognizes that structural reforms are key to Puerto Rico’s future success; it does not need the board to substitute its judgment for our own in that regard.”
Third, the goal of lowering Title III litigation costs to Puerto Rico’s government “does not warrant taking away the government’s own voice and own representation in its own restructuring process.”
Rosselló said that the Committee on Natural Resources “faces a fork in the road.” It can support the process found in the Puerto Rico Oversight, Management, and Economic Stability Act. “Down the other path lies obstructionist behavior that would undermine the duly elected government’s authority and legitimacy…. If the committee, led by you, Mr. Chairman, persists on this ruinous path, the people of Puerto Rico and their brothers and sisters on the mainland will know who to hold accountable.”
Bishop had written that his committee “has been unsatisfied with the implementation of PROMESA.”
In response, the governor noted that Congress had taken none of the steps that the Congressional Task Force on Economic Growth in Puerto Rico had recommended in Dec. 20, 2016. PROMESA had mandated the task force make the recommendations.
“Your letter embodies everything that is wrong with this process and only serves to reinforce the dismissive and second-class colonial treatment Puerto Rico has suffered throughout its history as a territory of the United States, which undermines our efforts to address the island’s fiscal, economic, and humanitarian crises,” Rosselló said.
On Tuesday staff of the House Committee on Natural Resources hosted a conference call for journalists to present their position on Puerto Rico and their response to the governor’s letter to Rep. Bishop. The staff comments were considerably milder than the governor’s letter.
A committee aide said that they look forward to working with the governor on a path forward. Another aide said that it is imperative that creditor concerns are listened to so that the island’s government can someday regain access to the capital markets.
Puerto Rico attorney and observer of the Oversight Board John Mudd tweeted, "Ricardo Rosselló declared war on the Republican leadership in Congress. If in November of 2018 the chamber changes, there is no problem, if not, an enemy was sought for free. Everything he said in his letter could have been said in another way."