Puerto Rico Oversight Board Executive Director Natalie Jaresko on Thursday announced she was resigning her position on the board effective April 1 after navigating through years of intense negotiations over the largest municipal bankruptcy in muni market history.
“Puerto Rico has the strength, and the people of Puerto Rico have the dedication, to end this crisis and build a better future,” Jaresko said in a statement. “After reducing most of Puerto Rico debt including for the Commonwealth [of Puerto Rico], to affordable levels; fulfilling our obligation to stabilize Puerto Rico finances; and creating a road map to prosperity with the fiscal plan, Puerto Rico has reached an important turning point.”
Jaresko said she was leaving the board “at a time of recovery and stability.”
“I am proud of what we have achieved and I am confident that the road that led us to this milestone will take Puerto Rico further to growth and prosperity,” she said.
The board is beginning a search for a new executive director and Jaresko said she is committed to help with the transition.
Jaresko's resignation comes the same week as more than 40 Puerto Rican groups called for the disbandment of the Oversight Board in a
On Tuesday, Gov. Pedro Pierluisi
At a Jan. 27 board meeting, some board members also discussed modifying the Puerto Rico Oversight, Management, and Economic Stability Act
Currently the act specifies the board is to be disbanded after four years of balanced budgets using modified accrual standards and the government can access the capital markets at affordable rates.
Jaresko leaves the board after almost five years in the position and the January approval of
She started work in March 2017, leading it through years of oftentimes contentious negotiations with various stakeholders in the bankruptcy negotiations.
Jaresko received mixed reviews on her time with the board, depending on where different stakeholders sat at the table.
“Natalie Jaresko’s service to Puerto Rico and her dedication to the work of the Oversight Board to fulfill the mandate Congress defined in [Puerto Rico Oversight, Management, and Economic Stability Act] has been essential," said Oversight Board Chairman David Skeel. "I am saddened by her personal decision to step back, but I also understand her desire for change after five years of rewarding but relentless and difficult work to help Puerto Rico recover from its fiscal and economic crisis."
President of the Puerto Rico House of Representatives Rafael Hernández Montañez said "although we have differences with what the Oversight Board represents, we recognize that during the past year we have managed to establish a sincere dialogue with Mrs. Natalie Jaresko, which has allowed us to establish formal communication with the board, approve the first balanced budget in the past five years, and pass the necessary legislation to get out of Puerto Rico's bankruptcy. We wish her the greatest success in her professional future."
Hernández Montañez said he hopes her replacement “continues to respect the powers and prerogatives of the Legislative Assembly by maintaining good communication.”
"I have always had the utmost respect for Executive Director Natalie Jaresko," Pierluisi said. "I thank her in particular for her work in Puerto Rico’s debt negotiations, because her ample financial experience helped us achieve a substantial reduction in our government’s debt.”
“I wish her great success in her future endeavors and urge the members of the [board] to ensure that whoever replaces her knows that we are in a transition stage towards the end of the board’s mandate," the governor said.
It is “hard to see how Jaresko leaving would have much of an impact at this point,” said Municipal Market Analytics Partner Matt Fabian.
Others were more negative in their assessments of Jaresko's tenure.
Puerto Rico Clearinghouse Principal Cate Long said Jaresko's tenure was "unfortunately ... contentious with creditors and Puerto Rico government officials."
"Although she lauds her accomplishments moving Puerto Rico towards fiscal responsibility as PROMESA requires, the reality is Puerto Rico remains three and half years behind filing their audited financial statements, the island has no process for competitively bidding government contracts and the government remains extremely bloated and inefficient," Long said.
"She has repeatedly made material misrepresentations regarding debt restructuring and multiple groups of government employees are now striking via sickouts because of their treatment in the plan of adjustment," Long said. "The [board] pretended for five years that Congress would completely obliterate Medicaid funding and this led to endless litigation over debt recoveries and pension treatment. I think the analysis of her tenure will show bad faith to almost all parties involved."
Center for Popular Democracy's Julio Lopez Varona said, "With her departure, Natalie Jaresko leaves Puerto Rico with a proven legacy of implementing austerity measures and budget cuts as a way to ensure payments for hedge funds and Wall Street while putting the weight of the debt crisis in the hands of everyday Puerto Ricans. Those Puerto Ricans, who suffered hurricanes, earthquakes and a pandemic, are now faced with decades of cuts to services that will be even more expensive and less reliable.
The center is a progressive advocacy group with offices in Brooklyn, New York, and Washington, D.C. Lopez Varona has extensive contacts with Puerto Rico groups representing different constituencies.
"Even worse, the legacy of Natalie Jaresko is one of negotiating debt deals that experts agree will lead us into another bankruptcy in less than a decade and will drive thousands out of the island," said Lopez Varona, who is interim campaign manager at the center. "Jaresko was never welcomed by Puerto Ricans and she leaves with no respect or appreciation from the people who live here. Jaresko might be gone soon but the fight continues to eliminate the board and fight for a recovery that is led by, and for Puerto Ricans."
Neither Jaresko nor the board immediately responded to Long's or Lopez Varona's statements.
“Nobody who sat at the negotiating table with Natalie Jaresko would ever doubt her strength,” Skeel said. “Nobody who ever saw Natalie Jaresko fight for Puerto Rico’s recovery would doubt her dedication to improving the life of the people of Puerto Rico. Natalie succeeded in ways few had thought possible. We all owe her an incredible debt of gratitude.”
