General Biz News

Nonprofit Espacios Abiertos closer to accessing Fiscal Plan data

Martín Guzmán presented details of his study at Espacios Abiertos earlier this year.

A decision by San Juan Superior Court Judge Anthony Cuevas pushed nonprofit organization Espacios Abiertos closer to gaining access to the debt sustainability analysis the Puerto Rico government used to draft the Fiscal Plan.

The Fiscal Agency and Financial Advisory Authority, or AAFAF in Spanish, submitted the Fiscal Plan to the Financial Oversight and Management Board for Puerto Rico, which has rejected it several times and has yet to certify it.

During a hearing Tuesday, Cuevas ruled against AAFAF’s attorneys, who asked for the suit to be dismissed, arguing that the Oversight Board is an key player in the dispute. The attorneys argued the government and the Oversight Board were “partners” and should appear in court together.

After listening to arguments for and against, the judge determined that the Oversight Board is not indispensable, and the court would hear the case. He ended the hearing by asking the parties involved to present their arguments in writing regarding whether the information Espacios Abiertos has requested is public information, unprotected by executive privilege.

Espacios Abiertos filed a Mandamos against the government of Puerto Rico on March 22, asking the court to guarantee the public’s right to information.

“Our intention when suing was to have access to information in the debt relief analysis  that the government commissioned with public funds and used to reach conclusions in the various versions of the Fiscal Plan AAFAF submittedto the Oversight Board on Jan. 24, Feb. 12 and March 23, 2018,” said Cecille Blondet, executive director of Espacios Abiertos.

The nonprofit made public a debt sustainability analysis, for which it hired economists Martín Guzmán, Joseph Stiglitz and Pablo Gluzmann, completed before Hurricane María. The scenario is completely different now, Espacios Abiertos said.

To be able to participate as a citizen organization in the decisions about the island’s debt, Espacios Abiertos plans to file an “Amicus Curiae” petition before Judge Laura Taylor Swain in Puerto Rico’s Title III case in the Federal Court in New York. That case submitted by the Oversight Board, has “very little citizen participation,” the nonprofit claimed.

Espacios Abiertos wants to be able to compare its independent study with the government’s, to learn about the assumptions that were used in the Fiscal Plan the Oversight Board will consider this week and “that will mark the lives of the people in Puerto Rico during the next five years.” That plan includes how the government will restructure the debt.

“The Fiscal Plan apparently models Hurricane María as a positive net shock. Such assumption is unreasonable,” said Guzmán.

“It’s effective adoption as a basis for the design of the plan would imply an underestimation of the debt reduction needs that Puerto Rico faces to restore the sustainability of its public debt, and thus be able to regain access to capital markets,” he added.

“Despite the importance of knowing the assumptions on which the fiscal plan is based to adequately evaluate its economic and social impact, the plan is not very transparent, and does not reveal its central assumptions,” Guzmán added.

“The disclosure of such assumptions will help to conduct more reasonable evaluations of a fiscal plan that will be implemented at a critical moment in the history of Puerto Rico, and that will affect present and future generations,” the economist concluded.

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