US House passes 1st amendment to PROMESA mandating more disclosure
The US House of Representatives passed H.R. 683 — the Puerto Rico Recovery Accuracy in Disclosures Act of 2019 (PRRADA) — the first amendment approved by either chamber of Congress to the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).
The legislation, introduced by Rep. Nydia M. Velázquez (D-N.Y.), mandates financial disclosures by professionals working on PROMESA debt adjustment cases before they can seek compensation for their services, with the goal of preventing conflicts of interest.
“I’m proud that today the House passed my bill to close a loophole in the island’s debt restructuring process, improve transparency, and restore confidence in the island’s future” Velázquez said.
“While we can have differing opinions on how effectively the Oversight Board is carrying out its mission, one thing should be clear — the island’s residents should be entitled to the same rights and protections as any debtor on the mainland.
Natural Resources Chair Raúl M. Grijalva (D-Ariz.) is an original cosponsor of PRRADA, which is also included in Grijalva’s Amendments to PROMESA Act (H.R. 6975) that was introduced in May to stop fiscal austerity measures, guarantee essential public services funding, and aggressively reduce Puerto Rico’s public debt.
“I’m grateful for the small step we took today to make necessary reforms to PROMESA,” Grijalva said. “Passing this measure gets us closer to addressing PROMESA’s shortfalls and making sure it serves the people of Puerto Rico.”
“With continued support from Rep. Velázquez and other champions, both in Puerto Rico and in Congress, we can build a better future for the island based on public input rather than austerity politics,” he said.
The Natural Resources Committee has jurisdiction over all US insular areas, including Puerto Rico. Upon taking the lead of the Committee, Chair Grijalva visited the island in 2019 two times, in March and September, to hear directly from Puerto Ricans and survey the impacts of ongoing financial austerity and recent natural disasters.
In May 2019, Chair Grijalva held a full Committee hearing on PROMESA, where it became clear that extreme budget cuts are reducing the quality of life for the residents of Puerto Rico. In October 2019, Grijalva held two legislative hearings on a discussion draft of amendments to PROMESA. On day one, the Committee received testimony from witnesses from the Financial Oversight and Management Board, the Puerto Rico Fiscal Agency and Financial Advisory Authority, and elected officials from Puerto Rico.
On day two, the Committee heard from unions, nonprofit organizations, professors, economists, and scientists who agreed that the core elements of what is now the Amendments to PROMESA Act are vital to the future of Puerto Rico, his office said.
“By applying a robust disclosure requirement to all PROMESA Title III proceedings and eliminating the double standard facing the people of Puerto Rico, this bill will help to restore confidence that the Board’s bankruptcy advisors do not have their ‘thumb on the scale’ to favor certain debts where they have a self-interest. This bipartisan bill ensures integrity of the PROMESA process,” Velázquez said.