U.S. President Donald Trump nominated the existing Puerto Rico Oversight members to continue in their current positions.
The members currently can serve only through July 14 without U.S. Senate confirmation. Trump has nominated them to continue in their roles through Aug. 30. This may foreshadow nominating them to serve three more years beyond that date.
The board’s seven members were appointed on Aug. 31, 2016, for three-year terms following the provisions of the Puerto Rico Oversight, Management, and Economic Stability Act. However, in mid-February of this year the 1st Circuit U.S. Court of Appeals ruled that the PROMESA appointment procedure was unconstitutional.
The court ruled that the current board could continue to operate as a board through mid-May, so as to give the president and Senate time to approve board members using the standard nomination process. Since then, the court has agreed to extend the deadline to July 15.
Through PROMESA the federal government created a board to control the island’s government’s and public utilities’ budgets and debt restructuring. At stake was more than $120 billion in debt and unfunded pension liabilities.
While Trump is nominating the board members to continue in their roles through their originally specified terms that end Aug. 30, if the Senate confirms them to serve until Aug. 30 and the Aug. 30 date were to pass, according to PROMESA they could continue to operate as the board. As long as four members chose to continue to do so, the board would have a quorum to continue board operations.
A former Obama administration official said Trump’s action is indicative of Trump’s belief in two things: First, “the overall PROMESA construct is the best path forward and they have no particular bandwidth for taking ownership of the problem or changing course: debt restructuring balanced with fiscal oversight.”
Second, “this board is doing its best to balance those two tools and that Trump will have difficulty identifying and getting confirmed seven replacement members willing to take on this very difficult assignment (without compensation).”
Trump sent the names of the existing board — Andrew Biggs, José Carrión, Carlos García, José González, Arthur González, Ana Matosantos, and David Skeel — to the Senate. Of the seven only Carrión lives in Puerto Rico, though a few of the others have spent long periods on the island.
On Tuesday the board filed a request with the First Circuit Court to further extend the period when the current board members could operate. It asked the circuit court to extend the stay until the U.S. Supreme Court can review the case, which the board has asked high court to do. The Supreme Court hasn’t yet indicated whether it will review the lower court’s ruling.
To explain Trump’s nomination, the White House press office said: “Mismanagement, corruption, and neglect continue to hurt the people of Puerto Rico, who deserve better from their government. The future health and growth of Puerto Rico is dependent upon financial constraint, reduced debt, and structural reforms.
“Through its work, the Financial Oversight and Management Board for Puerto Rico is providing the stability and oversight needed to address these chronic issues and bring hope for a brighter future,” the press statement said.
