GDB board members resign due to ‘restricted authority’
Two Government Development Bank board members are stepping down from their posts, saying, among other things, that the recently approved Puerto Rico Emergency Moratorium and Financial Rehabilitation has restricted the scope of their authority to make important decisions.
Fermín Contreras-Bordallo and Iván Méndez-López, submitted their letter of resignation to Gov. Alejandro García-Padilla, which is effective April 21.
“We’re aware of the gravity of the financial situation facing the Commonwealth and its public corporations and instrumentalities, including the GDB. We’re also aware of the need for passing the Puerto Rico Emergency Moratorium and Financial Rehabilitation Act and issuing the Executive Order [2016-10] to ensure that essential services are provided and to protect the health, security and wellbeing of the residents of the Commonwealth,” they said.
On April 10, 2016, the García-Padilla issued Executive Order 2016-010, under the Act, to protect the liquidity of the GDB, declaring a state of emergency for the GDB, prohibiting the disbursement of loans and imposing certain restrictions on the withdrawal of funds deposited with the GDB, among other measures.
The Act and the Executive Order “limit the functions and responsibilities of the GDB — which were already limited due to the GDB’s delicate financial situation — dictating the manner in which the operations of the Bank will be carried out and transferring duties to the fiscal agent and financial advisor of the Fiscal Authority,” they said.
“Therefore, the Puerto Rico Emergency Moratorium and Financial Rehabilitation Act and the Executive Order have restricted the scope of our authority to make important decisions for the GDB and other government entities, even though we would remain accountable for such decisions,” the executives indicated in their letter.
They added that, among other things, the Act establishes the Puerto Rico Fiscal Agency and Financial Advisory Authority, a new independent public instrumentality that would assume the duties of fiscal agent and financial advisor to the Commonwealth, its public corporations, instrumentalities and municipalities, which the GDB used to carry out.
“We understand that during the past months you have made difficult, but necessary decisions to guide Puerto Rico on the path to economic progress and solve the crisis we are facing. We wish you and your team much success during the remainder of your term and we trust that you will all continue taking the measures to steer Puerto Rico towards economic recovery,” the two officers said, urging the governor to appoint their replacements in a timely manner to ensure the continued operations of said entities.