The chairman of the U.S. House Natural Resources Committee, which oversees U.S. territories, criticized the Puerto Rico Oversight Board and Gov. Ricardo Rosselló over their failure to engage with bondholders in restructuring the island's debt.
“The committee has been unsatisfied with the implementation of PROMESA and the lack of respect for Congressional requirements of the fiscal plan,” Chairman Rob Bishop wrote to Board Chairman José Carrión, copying to the other members of the board. “And now, due to intentional misinterpretations of the statute, the promise we made to Puerto Rico may take decades to fulfill.”
Bishop said he felt “frustration” with the board’s unwillingness to engage in dialogue and reach consensual restructuring agreements with creditors. He said that it was unfortunate that the board threw out one of the two consensual debt restructuring agreements – that for the Puerto Rico Electric Power Authority.
Bishop said that both the Rosselló government and the board must show “much greater degrees of transparency, accountability, goodwill and cooperation.”
Contrary to a speech made by the governor Wednesday night, Bishop says that the Puerto Rico Oversight, Management and Economic Stability Act charges the board with the central duty of mandating needed structural and fiscal reforms to the island’s government.
Bishop said he was concerned with projections that Puerto Rico government costs will increase while population is supposed to drop. He said he was also concerned with the “extreme amount” being spent on Title III bankruptcy litigation. He said that board should make sure it is the sole legal representative of Puerto Rico in these cases.
Bishop called for the board to define what constitutes “essential public services” in Puerto Rico.
“I ask that you adhere to the mandates of PROMESA and work closely with creditors and the Puerto Rican government as you finalize and certify the fiscal plans,” Bishop said.
“My committee will be monitoring your actions closely; and as we near the two-year anniversary of the passage of PROMESA, an oversight hearing on the status of achieving PROMESA’s goals will likely be merited,” he continued.
Bishop complained that the governor’s released draft fiscal plans “circumvent” the stated purpose of PROMESA.
Bishop’s criticism comes as the board is under fire from Rosselló for overreaching its authority and being too harsh and fromAssured Guaranty President Dominic Frederico for failure to be transparent and respectful of bondholder rights. Both released statements Wednesday in reaction to the efforts by the governor and board to develop five-year fiscal plans.