WASHINGTON – Two senators have asked the Puerto Rico oversight board to show that it has complied with PROMSESA in approving the government’s fiscal plan because of concerns that the plan does not properly respect the lawful priorities of certain Puerto Rico debt obligations.
Sens. Thom Tillis, R-N.C., and Tom Cotton, R-Ark., sent the letter to the oversight board's chair Jose Carrion on Friday afternoon, citing questions that came up about compliance during a House Natural Resources subcommittee hearing last month. They asked for a detailed response by April 25 on how each of the requirements PROMESA lays out for a fiscal plan, which received board approval on March 13, have been met.
“As you know, PROMESA requires that a certified fiscal plan ‘respect the relative lawful priorities or lawful liens, as may be applicable, in the constitution, other laws, or agreements of a covered territory or covered territorial instrumentality,’” the senators wrote in their letter. They wrote that the oversight board’s answer to whether the approved fiscal plan followed the law was “unsatisfactory.”
“We have heard numerous concerns regarding the fiscal plan’s failure to comply with lawful priorities and liens established by Puerto Rico’s constitution, its failure to differentiate between non-essential and essential spending, its elevation of all non-debt spending above debt service, and its unexplained economic assumptions,” Tillis and Cotton wrote.
They added that multiple creditor groups have alleged that the commonwealth and oversight board have shown no interest in negotiating with bondholders, something that violates “both the spirit and letter of PROMESA.”
“We are deeply concerned that PROMESA is not on track to achieve its goals of promoting fiscal responsibility in Puerto Rico and returning the commonwealth to the capital markets,” they said.
The two senators also asked Carrion to meet here with their staffs and fully brief them on, among other things: the status of negotiations; who the board is negotiating with; how the board is fulfilling PROMESA’s requirements; and the percentage of revenues that Puerto Rico is spending on payments owed to U.S. taxpayers.