Puerto Rico's top three financial agencies will begin public hearings next week as officials prepare for Gov.-elect Luis Fortuño to begin his tenure as the island's top political leader on Jan. 1.

Members of the newly formed transition committee, headed by Senate President Kenneth McClintock, met yesterday for the first time to begin the changeover process.

Officials decided that the Government Development Bank for Puerto Rico, the island's financial adviser, the Treasury Department, and the Office of Management and Budget will begin public hearings before the transition committee starting next week, a standard process when a new governor takes over.

The three agencies, along with all government agencies, already submitted reports to Secretary of State Fernando Bonilla, who heads the outgoing transition team.

"It was a cordial and productive meeting ... next week we'll hold hearings on the economic and fiscal agencies and then take it from there," McClintock said.

Along with McClintock, who is rumored to be Puerto Rico's next secretary of state, the incoming transition team includes former secretary of the GDB board of directors Delfina Betancourt and senior Fortuño adviser Jaime Gonzalez Goenaga, along with several corporate lawyers and finance professionals.

The outgoing transition committee consists of Bonilla, GDB president Jorge Irizarry, Treasury Secretary Angel Ortiz Garcia, OMB executive director Armando Valdes, current chief of staff Jorge Silva Puras, and Puerto Rico Industrial Development Co. executive director Boris Jaskille, along with other department heads.

Fortuño is expected to announce cabinet positions within the next two weeks along with his appointments to the GDB's seven-member board of directors. He will also announce his recommendation for GDB's president, which must receive board approval.

One of the most pressing issues for the incoming administration will be the $1 billion deficit in the current $9.48 billion fiscal 2009 budget. Irizarry said that will be one of the most important issues on the table.

"Definitely the biggest item is the fiscal situation, to make sure that they understand the budget and the things that need to still be done in the second semester to balance that budget, to me that is the key item," Irizarry said.

He also stressed that to maintain continuity with the rating agencies and the investor community, the new administration - once its officials are on board and briefed - will be reaching out to rating agencies and bond holders.

"I'm recommending very strongly that communication be continuous so that it should be a high priority for them to get in front of investors," Irizarry said.

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