By Franklin D. López
Journalist, Writer, Entrepreneur and Political Prisoner
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“The first victim of politicians is not the People but the truth”- FDL
As the United States Congress prepare the roll out of the new bill in June to deal Puerto Rico’s debt crisis there is an unequivocal consensus, of Republicans and democrats, the proposed federal fiscal or supervisory board must have strong powers to overrule both the Governor and the territorial legislature. I found fascinating how mysteriously Washington works after reading the Supreme Associated Justice Sonia Sotomayor warning Puerto Ricans “of multiple years of a Federal Fiscal Board!” Was she briefed by Congress or The White House?
The overwhelming majority of Puerto Rican pilgrims to Capitol hill went with a laundry list of demands and inclusions in order to have a meaning or workable legislation. But, only a few citizens lobbyist presented the members of Congress with the realities of the territorial social, economic and political environment. They did not define how dire the Puerto Rican social eco system is or it’s rapidly deteriorating economic conditions.
This commentary is written to provide verifiable information of the day to day dynamic’s of the people and the elected officials living still in Puerto Rico. Besides dealing with restructuring of the public debt and its payment Congress must deal with realities that are currently creating the perfect storm that dismembers the Puerto Rican family. These are the challenges that the soon to be created Fiscal Board will find:
1-In the last two natural years of 2014 and 2015 more than 240,000 American citizens from Puerto Rico have departed the archipelago and moved to the United States mostly to Florida, Texas, North Carolina, Georgia and Virginia. This massive population exodus is the largest in the history of Puerto Rico costing the Island’s economy $ 4.6 BILLIONS less. If you want to confirm the different polls that revealed that 92% of the population will migrate from Puerto Rico to the United States if independence or free association is granted you may do a poll with the Gallup organization to confirm them.
2- As the population exodus intensifies the territorial government continues with a public policy of resolving budgets deficits with more taxation. Puerto Rico has today according to the New York Times the highest consumer tax in the Nation not to say the highest cost of living as well. It also has the lowest per capita income of any jurisdiction of the United States, $ 19,200.00 Besides that, Puerto Rico has the second highest energy cost and the highest cost of drinkable water. All of this makes it impossible to attract investors to the archipelago and jobs creation
3- You will find that all gubernatorial administrations since 1973 have been plagued with rampant corruption and that the “big fish” enjoys total impunity while the sardines are incarcerated. This has caused the taxpayers of Puerto Rico more than 27 thousands millions in the last 41 years. Billions were wasted during the past four decades in multi millions dollars contracts to friends and lawyers. This practice continues even during the present crisis. Above all has created the lowest approval rating and confidence in governmental institution in our modern history. The Federal Fiscal Board must provide the U.S. Department of Justice with the human and financial resources to prosecute the real culprits. This includes governors, mayors and legislators and their associates who enter public service with small assets and leave multi millionaires. If the Fiscal Board don’t invest some of their time and resources in investigating and prosecuting those responsible for the crisis then the people will simply continue to lose their little trust that they hold for the local government.
4- The construction and mortgage banking industries are literally non existent. According to the 2010 U.S. Census there were 262,000 empty housing dwellings on the Island. The crisis has expanded dramatically housing foreclosure. In 2015 4,200 units were foreclosed and more than 20,000 units with 90 days or more in arrears of mortgage payments. There is also an appalling deflation affecting the values of the Puerto Rican family most important savings account, their homes. There is a consensus that real estate properties lost at least 50% of values.
5- The Federal Fiscal Board will find a political sub-culture of elected officials who have made the political status respective ideologies “a perfect business form.” They use their causes to obtain financial gains and once in power it is shelved in an obscure drawer until they need it again. This is a subculture who have created one of the largest per capital governmental bureaucracy since the creation of the Soviet Union. This overwhelming government bureaucracy is responsible for delaying key permits for the development of projects and simply has prevented investment coming to the archipelago.
6- The Department of Education is the most effective and perfect dysfunctional agency of the territorial government. With a multi-billion dollars budget is a pool full with corruption and government waste. It has failed in providing an acceptable level of education and is losing tens of thousands of student that are migrating with their parents to the mainland. This loss will reduce Federal funding to the Department of Education.
7- The Health Department is another runner up for corruption, government waste and inefficiency. The government universal health plan has expanded its operational cost and in a period of two years has used the totality of the Federal funding under the Obama Care program. It is already insolvent.
8- The legislature is a den of thieves, extortionist and corrupt politicians. Both houses cost to operate more than $ 50,000,000.00 a year not including the cost of their waste and corrupt actions. It should be substantially reform and reduced in size. The U.S. Department of Justice needs additional human resources and funding to clean not only the legislature but as well the executive branch and municipal governments.
9- The Governor of Puerto Rico lives in a castle and the operation of the governor’s offices cost the tax payers more than $ 30 million dollars a year. The governor’s motorcade includes three SUVs and two police motorcycles, not to mention the first lady and others. Former Governors gets police security detail costing more than $3.6 million dollars a year in an archipelago without any history of violence against governors or former governors since 1953.
10- The Government Development Bank is a racketeering criminal organization (RICO) by procuring, marketing and selling bonds with inflated tax revenues projections, false and cooked financial statements. As recently as last Friday, the President of the Senate of the government’s Popular Democratic Party said that “the fiscal team has failed and that it’sprocesses have been questionable and not pristine.” Puerto Rico is going to it’s third fiscal year without audited financial statements.
11- Puerto Rico has 172,000 former government employees and pensioners, including teachers. Their pension funds were raided by previous territorial government administrations since 1973 and has a structural deficit estimated by the Senate Finance Committee Chairman, Senator Orrin Hatch at $44 billions dollars. In two years, both funds will be insolvent. They cannot be left out of the debt and economic crisis solutions package. If they are left out this will create an economic chaos, with a weak banking platform of the territory. They should not be punished by the corrupt and wasteful acts of formers governors who used their pension funds to finance government deficits. Congress must consider using ERISA, in a creative way, as a solution to avoid insolvency of the pension funds. The culprits responsible of this must be brought to justice. By the way the Federal Fiscal Board will experience a very strong. militant and focus labor movement.
Finally, Congress must be clear and provide the Fiscal Board powers to initiate a Federal status process with the $ 2.5 millions approved in fiscal year 2014 budget “to solve its final political status.” This allocation was approved by the votes of Republicans and Democrats. The Fiscal Board legislation cannot and should not be limited to be a debt collection bill. It must include a clear mandate to show the world that the U.S. Congress and its Executive branch are committed to guarantee 3.5 millions American citizens their right to self determination with internationally recognized decolonizing formulas. In order to pave the road towards that goal Congress should revive the Federal Enterprise Zones, promoted by Congressmen Jack Kemp (R-NY) and Robert García (D-NY) to provide a tool to generate economic activity and to strengthen the Island’s infrastructure and prepare the territory for the Federal plebiscite that will finally settle their political destiny. Not including these two milestone initiative in the PROMESA legislation will make the effort failed from the get go. Puerto Ricans will not return to the archipelago until its status is solved and will continue to leave as long as the economic conditions continue to deteriorate.
Ignoring the dire economic situation and providing the tools to rebuild will only create in the former showcase of the United States territory in the Caribbean a ghost archipelago! The time to do the right thing is now!