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Economists: Several aspects of PROMESA illegal, harmful

Economists Association President Juan Villeta-Trigo and Economist and Professor Antonio Fernós-Sagebién.

Economists Association President Juan Villeta-Trigo and Economist and Professor Antonio Fernós-Sagebién.

Members of the Puerto Rico Economists Association believe there are several aspects of the Puerto Rico Oversight, Management, and Economic Stability Act that are unconstitutional, saying the disruption they could bring to the island are “incalculable.”

During a meeting with members of the media, Association President Juan Villeta-Trigo and Economist and Professor Antonio Fernós-Sagebién pointed out four areas of the federal bill — expected to go to a vote at the U.S. Senate this week — they believe are questionable.

For one, the fact that the proposed oversight board would have the authority to privatize or commercialize “entities within the territorial government,” in this case, municipalities, is particularly worrisome for the trade group.

“The law is establishing an authority to privatize and commercialize municipalities. That could be especially problematic in municipalities with important resources, like an ecological area,” said Villeta.

The main problem is that through a privatization, a municipality would cease to generate revenue, as the specific property would be turned over to a private operator, said Fernós.

“A commercialization could be seen as a forced public-private partnership. The difference is that there is no negotiation from the point of view of the titleholder,” Fernós said.

Another aspect of the law that raised a red flag is the language saying oversight board members may receive “gifts, bequest and devices of services and property,” but would not be subjected to the regulations of the Puerto Rico Government Ethics Office.

A third point that needs close scrutiny is the clause within PROMESA that states that the board’s decisions are not subject to any judicial review; in other words, may not be appealed.

“There shall be no jurisdiction in any United States district court to review challenges to the oversight board’s certification determinations under this Act,” the measure states.

“This is something that needs to be brought to light, so that people understand that this isn’t complicated. If I can’t appeal, I have to accept. There’s no other way to say it,” said Villeta.

The other troublesome aspect of the PROMESA bill is that its authority could annul Commonwealth laws on its path to ensuring that the purpose of the proposed Act is met, the economists said.

Specifically, the bill refers to “ensuring the prompt enforcement of any applicable laws of the covered territory prohibiting public sector employees form participating in a strike or lockout.”

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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