Time for a Change at the Puerto Rico Oversight Board
While the attention of the nation and the news media may have moved on from the dire situation in Puerto Rico, the island is still reeling from the devastating effects of last year’s Hurricane Maria.
Months later, people are still dying because of the storm. The Los Angeles Times recently reported that Penn State University researchers found the “total number of deaths above average in September, October and November was 1,230.” And, according to People Magazine, “there’s been a 29 percent spike in suicide rates compared to the previous year,” while “in 2017, 253 residents committed suicide compared to 196 in 2016.”
The New York Times reports that nearly 15 percent of the island’s residents who had electricity before the storm still lack power. Despite this shocking number, the Times article found that many of the contractors brought onto the island to help restore electricity are now leaving. Sadly, this is still a major improvement from the original contractor hired to restore energy in Puerto Rico. As you may recall, a Montana company called Whitefish Energy somehow managed to win a $300 million contract last fall despite lacking the staff or experience to rebuild the electronic infrastructure across all of Puerto Rico.
Regrettably, poor leadership and mismanagement by leaders — elected and otherwise — is nothing new in Puerto Rico. In fact, the Puerto Rican government revealed previously undisclosed and secret bank accounts that currently hold a total of $6.9 billion on behalf of a variety of public agencies. This news is dismaying, considering Puerto Rico currently owes over $71 billion dollars to creditors and was demanding better repayment terms and loan forgiveness. Any creditor that may have been feeling charitable to Puerto Rico probably reconsidered after finding out about this secret cache of funds.
It has become clear to those, like me, who want to see Puerto Rico thrive, that the island needs new leadership. While the Congress and the federal government have little say over whom the people of Puerto Rico elect as their representatives, Washington does have some say about others controlling the fate of the island.
Specifically, when Puerto Rico defaulted on its debt last summer, at the urging of President Barrack Obama, Congress created the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) and as part of this law, seven members were selected to an Oversight Board (OB) whose goal was to develop a fiscal plan to reduce spending while instituting policies to generate wealth and grow the island’s economy.
No doubt, the OB was tasked with making very difficult decisions. After all, they had to cut government spending in a place that was already suffering from high unemployment and widespread poverty. But these decisions had to be made nonetheless, in the hope that short term pain would result in long-term gain.
Whether or not the OB was ever up to this challenge is doubtful. But after the devastation of Hurricane Maria, it has become clear that it is not. Since the hurricane, no government agencies in Puerto Rico have passed any new plans to rebuild the island and fairly restructure their debt. Simply put, the OB is not doing its job.
The buck stops with Natalie Jaresko. Before landing in Puerto Rico, Jaresko managed the Western NIS Enterprise Fund (WNISEF), a $150 million regional fund run by the U.S. Agency for International Development. While at WNISEF, Jaresko took in $1.77 million in bonuses in 2013 — despite the fact that WNISEF lost money during her tenure there. Natalie Jaresko was able to claim this windfall on the backs of taxpayers without accepting any personal risk. Pretty good for government service!
Now, as executive director of the OB, Jaresko makes a salary of $625,000 — more than 30 times greater than the median household income in Puerto Rico. One might be able to overlook this fact if she were doing a great job. She’s not. Natalie Jaresko has no experience in managing large bankruptcies or municipal bonds. And when grilled on her knowledge of the Jones Act by Chicago Congressman Luis Gutiérrez last year, she exposed her lack of knowledge about the inner workings of the Puerto Rican economy. Jaresko may be a well-meaning individual, but she seemingly lacks the ability to make the tough decisions Puerto Rico needs. It’s time for the OB to find a new director.
My visits to Puerto Rico over many years produced fond memories. It is my hope that its residents will one day again be able to live on an island that is as economically viable as it is beautiful and rich in culture. Rebuilding Puerto Rico won’t be easy, but that task will be even more difficult until the OB is under new leadership.
Henry Bonilla (R-TX) is a former congressman.
