Political Report # 1360 Puerto Rico’s Fiscal Control Board: A Parallel Government Full of Lawyers and Consultants

by Luis J. Valentín Ortiz, Latino USA

Martin Bienenstock sits in the audience, looking at his tablet. As the twelfth public meeting of Puerto Rico’s Fiscal Control Board takes place, he raises his eyes, adjusts his glasses, frowns and pays attention to the discussion. Nothing seems to happen and his eyes go back to the electronic device. Bienenstock, a partner at New York-based Proskauer Rose, is a well-known lawyer in the corporate restructuring industry. With almost 40 years of experience, he has participated in many of the largest bankruptcies in the U.S., including a key role in the restructuring of General Motors and Chrysler, and representing now-defunct Enron in its Chapter 11 bankruptcy. His biography highlights how Bienenstock has been a staple for the past decade on the National Law Journal’s list of the 100 Most Influential Bankruptcy Lawyers, as well as an “MVP” among bankruptcy lawyers, according to Law 360. Since late 2016, Bienenstock leads the legal counsel of Puerto Rico’s federally appointed board, particularly in the bankruptcy cases filed under Title III of PROMESA. From May 2017 to June 2018, he dedicated more than 1,500 hours to Puerto Rico’s bankruptcy. Each minute of Bienenstock costs $12.65, and for his work, he has invoiced more than $1.3 million for the one-year period. Bienenstock didn’t answer a request for comment made by the Center for Investigative Journalism (CPI by its Spanish initials).

Political Report # 1255 Puerto Rico Is Emblematic of the Excesses of Financial Systems

By Janine Jackson, FAIR

You can find the audio for this interview here.  Janine Jackson interviewed Ed Morales about Puerto Rico's recent filing for bankruptcy amidst its debt crisis for the May 12, 2017 episode of CounterSpin. This is a lightly edited transcript. Janine Jackson: A CNN story headlined "Five Facts About Puerto Rico's Utter Economic Misery" invited readers to marvel at the $74 billion in debt and $50 billion in pension obligations that led to the largest municipal bankruptcy ever filed. Puerto Rico owes $8 million to Microsoft alone, readers are told, but now they may be shielded by the court as they try to negotiate that settlement. "There's no established rulebook to shape what comes next" in Puerto Rico, said a recent Bloomberg report, which described fights around the debt as "about to plunge into the unknown." There is much that is unclear about the way forward in Puerto Rico, but some things about how we got here are just not being much talked about. We're joined now to discuss the situation by Ed Morales, author and journalist and lecturer at the Center for the Study of Ethnicity and Race at Columbia University. Welcome back to CounterSpin, Ed Morales. Ed Morales: Hi. Thanks for having me. JJ: When we had you on the last time in 2015, in July, talking about Puerto Rico's debt crisis, you said that the moderate position is that Puerto Rico should be allowed to declare bankruptcy, but even if that happened, "there is still going to be a price paid by Puerto Rico." And you also noted at the time that the Puerto Rican government had its own committee looking at restructuring the debt, but that there was "noise from more right-wing Republicans, who want a US oversight committee that would take away a lot of the autonomy of Puerto Rico to determine its economic future." Well, that sounds a lot like where we're at about now. I can't imagine that you're surprised by the current situation.

Political Report # 1249 Puerto Rico's Political and Economic Crisis Deepens

By Ed Morales, The Nation

Last week, events in Puerto Rico continued to reach new levels of tension and emotion as the island's bankruptcy proceedings began, the university's month-long strike was threatened by court maneuverings, and the long-held political prisoner Oscar López Rivera emerged from house arrest to assertively spread an anti-colonial message to a people long denied sovereignty.

Political Report # 1189 Obama Appoints Social Security Critic to Fix Puerto Rico’s Budget

By David Dayen, The Intercept

Andrew Biggs, an American Enterprise Institute resident scholar and architect of conservative efforts to cut and privatize Social Security, has been named by President Obama to a seven-member fiscal oversight board for the debt-ridden U.S. territory of Puerto Rico. That board, which will work out restructuring for over $70 billion in debt, has widespread authority to institute additional austerity on the island’s citizens, including potential reductions in public pensions. And Biggs appears to be the only member of the board that has significant experience with social insurance. Under the Puerto Rico Oversight, Management, and Economic Stability Act signed into law in June, the fiscal oversight board will be effectively in charge of the island’s finances, usurping its democratically elected government. The oversight board is tasked with balancing Puerto Rico’s budget and pursuing all avenues to pay off its massive debt, including cuts to the island’s education, police, and health care systems. It can sell off Puerto Rican assets, lower the island’s minimum wage, order layoffs, and enforce a ban on public employee strikes. Only as a last resort can the island obtain court approval for a debt restructuring agreement, and negotiate with creditors, which include several “vulture funds” that scooped up Puerto Rican debt at a discount in the hopes of a big payday.

Political Report # 1067 Capital Over People? Puerto Rican Debt Crisis Explained By Chandler Foust, COHA

Featured Photo: Aeriel view of Old San Juan.             From: U.S. National Park Service. By Chandler Foust, Research Associate at the Council on Hemispheric Affairs

UPDATE (August 4, 2015, 2:28 p.m.): On Monday August 4, Puerto Rico's Public Finance Corporation failed to pay the $58 million USD it owed creditors, making only a $628,000 USD payment. In addition, the island owes $5 billion USD over the next twelve months. Monday marked the first day in the island's history where it failed to make a payment. The current debt crisis in Puerto Rico not only illustrates a need for a complete restructuring of the island's economy, but a closer look taken toward its further political union with the United States. In addition, the current crisis shows the flawed way that politicians respond to debt crises, and how the people who end up getting hurt are usually not the ones who started the crisis. Lastly, the current political debate between debtors and creditors, harsh austerity measures, and further concessions to capital has shown that these lessons have yet to sink in for many.