Puerto Rico's chief financial officer, Melba Acosta Febo, is ending her service to the commonwealth July 31.
Her resignation was announced Thursday in press releases from the governor's office and the Government Development Bank for Puerto Rico. Acosta Febo, who has also been serving as President of the GDB, which oversees Puerto Rico's debt, has worked for Puerto Rico Gov. Alejandro García Padilla since he assumed office in January 2013.
"During the three and a half years that Melba has worked in this administration, both in the Treasury Department and the GDB, she has made a great contribution towards recovering the path of fiscal responsibility in Puerto Rico," García Padilla said in a written statement.
"She came at a critical time in Puerto Rico's public finances," the governor continued. "Her vision for streamlining the Treasury Department, commissioning the KPMG study to achieve a better tax system for Puerto Ricans, developing measures to stabilize the GDB's liquidity, collaborating in the Fiscal Adjustment Plan, commissioning the Krueger plan, advocating for the Emergency Moratorium Act, and persevering towards achieving a voluntary agreement with our bondholders, are just a few examples of her profound determination to get Puerto Rico out of fiscal crisis."
Acosta Febo said her time in office involved "years of intense work devoted to addressing the complex financial issues of Puerto Rico." She added, "I remain hopeful that we will be able to bring Puerto Rico's debt service to sustainable levels—more so now that we have the tools provided by PROMESA—and gradually recover financial stability and the much needed economic growth."
Joseph Rosenblum, senior vice president at AllianceBernstein, said he wasn't surprised by Acosta Febo's departure. "First, I have to believe she is exhausted," he said. "Second, a new governor will be coming in soon and likely will very much want his own team, which is typical. And finally, the control board comes in adding a new complexity to the work of the GDB."
Puerto Rico will elect a new governor in November who will be sworn in at the start of January.
"I have a generally favorable impression of [Acosta Febo]," said another analyst who wanted to remain anonymous. "She did a good competent job under a lot of pressure."
Acosta Febo has been the highest paid member of the governor's administration and has made substantially more than the governor. Since October 2015 her annual salary has been $180,000 per year, according to a story from that time on the El Vocero news web site.
Once Acosta Febo is gone, the chief lieutenant in the governor's administration overseeing debt may be Víctor Suárez Meléndez. In April the governor appointed him as executive director of the Financial Advisory Authority and Fiscal Agency. The agency was formed to oversee Puerto Rico's debt and debt restructuring.
The government has talked about the possibility of shutting the GDB down. The GDB defaulted on $400 million in principal payments on May 1.
The commonwealth, its public corporations and authorities failed to pay $911.4 million that was due on July 1, according to GDB information. Municipal Market Analytics said this was the greatest monetary default in U.S. municipal history.
On June 30 Pres. Obama signed PROMESA to authorize forming a control board for Puerto Rico and opening the door to a possible debt restructuring under the oversight of it and court judge. It remains to be seen what role the local government will have when the control board is formed.
Acosta Febo has been the longest serving leading member of the governor's senior financial leadership. Javier Ferrer was GDB president from January 2013 to July 2013, when he resigned. At that point José Pagán was promoted from within the GDB to become the interim president. Acosta Febo replaced him in October 2014 and has served in the position since then. Pagán returned to a less prominent role within the GDB.
Prior to working at the GDB, Acosta Febo had been the Secretary of the Treasury since January 2013.
GDB Chairman David Chafey worked in his role from January 2013 to June 2015 before Acosta Febo took over the role.
Carlos Rivas Quiñones was the executive director of the Office of Management and Budget until October 2014, when he resigned and was replaced by Luis Cruz Batista, who still holds the position.
When Acosta Febo left the Treasury in October 2014, Juan Zaragoza G-mez became the new secretary. Zaragoza had held a prominent role in the Treasury before this. He has remained in the post of secretary since his promotion.
