The U.S. Supreme Court announced it will hear a case about the constitutionality of the appointments to the Fiscal Oversight and Management Board that manages Puerto Rico’s financial affairs and is renegotiating its $70 billion-plus in public debt while the island is in bankruptcy.
The court, which is set to adjourn soon for the summer, said it would hear the case in October 2019, at the start of its next session.
At issue is whether members of the fiscal board were appointed without consultation with the Senate, whose role is to advise and consent on such federal appointments, say opponents who are debt holders.
The seven-member panel was appointed by former President Barack Obama from a bipartisan list. This week President Donald Trump reappointed all seven members, sending the list to the Senate for approval. The Senate Energy and Natural Resources Committee, which oversees Puerto Rico affairs, is expected to hold hearings on the nominees.
The fiscal board has been excoriated not only by creditors which state the board members were unconstitutionally appointed, but also by many Puerto Ricans who contend it violates the island’s sovereignty.
This week the Puerto Rico government announced it had renegotiated $35 billion in debt owed to commonwealth and Public Buildings Authority creditors. According to Caribbean Business, the agreement would reduce outstanding commonwealth bonds to under $12 billion, down more than 60 percent. Meanwhile, debt service, including principal and interest over the next 30 years, would be slashed in half, to $21 billion from $43 billion.
It’s unclear whether or how the fiscal board’s authority and its renegotiation of existing debt would be affected by a Supreme Court decision. An appeals court ruled earlier this year that the fiscal board members were unconstitutionally appointed, leading to the upcoming Supreme Court review.
Here are the fiscal board members:
- José Carrión, board chair and president and principal partner of HUB International CLC, LLC,
- Andrew Biggs, resident scholar at the American Enterprise Institute
- Carlos M. García, CEO of BayBoston Managers LLC and managing partner of BayBoston Capital L.P
- Arthur J. González, senior fellow, New York University School of Law
- Ana J. Matosantos, president of Matosantos Consulting
- José R. González, CEO and president of Federal Home Loan Bank of New York
- David R. Skeel, professor of corporate law, University of Pennsylvania Law School
- Christian Sobrino, governor’s representative, former president of the Puerto Rico Government Development Bank
˜˜María Padilla, Editor