From [HERE] A federal judge in New York ruled [order] on Tuesday that Puerto Rico will not have full control of its financial management under the Puerto Rico Oversight, Management, and Economic Stability Act of 2016 (PROMESA) [text]. Instead, the court ruled that oversight of financial management shall be handled by the PROMESA—created Financial Oversight and Management Board for Puerto Rico in accordance with the legislation itself.
The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) is a 2016 US federal law that established an oversight board, a process for restructuring debt, and expedited procedures for approving critical infrastructure projects in order to combat the Puerto Rican government-debt crisis. Through PROMESA, the US Congress established an unelected Fiscal Control Board (FCB) to oversee the debt restructuring. [MORE]
Part of an extended legal proceeding [JURIST report] involving the future of Puerto Rico’s financial future, on July 5 Puerto Rican Governor Ricardo Rosselló, along with the Puerto Rico Fiscal Agency and Financial Advisory Authority, filed a complaint against the Financial Oversight and Management Board for Puerto Rico.
In the complaint, Rosselló opposed the Board’s fiscal plan to suspend the spending powers of Puerto Rico’s administrative agencies, plans to reduce and consolidate the territory’s number of agencies, civil service downsizing, reduction of paid civil servants’ leave days; and to criminalize excessive state spending. The Board moved for dismissal of the governor’s complaint.
Referring to the text of PROMESA, US District Judge Laura Taylor Swain dismissed some of the complaints asserted, while permitting ones such as the proviso to criminalize noncompliant budgetary practices by the territory. Swain permitted the rest of the adversarial claims to go to Magistrate Judge Dein for pretrial proceedings.
PROMOSEA continues to treat the island as an anomaly, neither as a state nor a municipality, fails to provide a way to statehood or independence, and does not deal with underlying economic problems such as high unemployment, lack of opportunities, welfare issues, and brain drain. The oversight board will have broad sovereign powers to effectively overrule decisions by Puerto Rico's legislature, governor, and other public authorities, under the federal government's constitutional power to "make all needful rules and regulations" regarding U.S. territories. For this reason, the board has been criticized as colonial and anti-democratic in nature. According to Nelson Denis, the political and economic activities of the United States in Puerto Rico have created structural dependency, economic stagnation, and a growing debt problem that led to the creation of this fiscal plan.
Many critics bring up the fact that meetings are not conducted to discuss the legitimacy of the lending-scheme debt, but instead look to use to capitalist economic frameworks to return Puerto Rico to a state of economic growth. [MORE]