by Franklin D. López
Journalist, Writer, Entrepreneur & Political Prisoner
www.franklindelanolopez.com, @trueblue51 Facebook.com/FuerzaEstadista
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“No one is born hating another person because of the color of his skin, or his background, or his religion. I hate racial discrimination most intensely and all its manifestations. I have fought all my life; I fight now, and will do so until the end of my days.”- Nelson Madela
Dear Judge Taylor Swain!
I write you a public letter and begin by quoting Nelson Madela on discrimination, inequality and segregation. The reasons for doing so are many. The first one is that the PROMESA law is one enacted with the clear intentions of protecting the interest of bondholders, hedge funds and Wall Street interests and not necessarily the 3.4 millions American citizens living in the territory. The unquestionable fact that PROMESA was approved in six weeks and enacted into law shows you the “persuasive and mysterious powers of campaign donations.” Please read; “The Best Democracy Money Can Buy” written by Greg Palast.
PROMESA was approved without a vigorous and strong economic component. It lacks what Detroit had a “White House Task Force” to promote and fast track Federal funds and loans guarantee to promote economic activities and job creation and neutralize the recessive effects of a strong austerity program. Federal funds and guarantees were also given to New York city and Washington, D.C.. This is simply discrimination and segregation! The law is a debt collection outline to pay bond holders, investment bankers, hedge funds of a public debt of $72 billions and a structural deficit in the public employees pension funds of more than $ 39 billions. The experience of the countries who defaulted on their public debt in the European Community has shown that even with strong financial rescues the countries struggled to recuperate economically and socially. The PRFSFB wants “to save” Puerto Rico without a vigorous economic and job creation plan!
As you know in November 1975, Puerto Rico’s governors were forewarned about this impending economic crisis. Forty two years ago, Nobel Economic Prize winner Dr. James Tobin warned Governor Rafael Hernández Colón (PDP 1973-1976 1984-1992) that Puerto Rico was in a precarious economic situation. On December 11,1973 Tobin released The Tobin Report, a comprehensive study on Puerto Rico’s economic development, fiscal and budget policies.
The report expressed that “The trends of government spending, the deficits of the government agencies, public debt and the production cost cannot be sustained even if the external economic conditions are favorable.” The report strongly recommended “a serious austerity program and a long list of substantive measures cutting governmental operations and costs”. Tobin predicted with extraordinary precision that if the recommendations were not implanted “the government of Puerto Rico will face the hard realities of running for desperate solutions.”
The Tobin Report predicted in December 1973, forty two years ago, that Puerto Rico would face serious financials and economic consequences if no measures to cut cost and implement an austerity programs were implemented. All of this was ignored after the report was made public by the Hernández Colón gubernatorial administration which instead chose the path of borrowing and spending. Subsequent colonial governments followed the same policy.
Subsequently, in 1979, under President Jimmy Carter’s Administration, a comprehensive study was ordered by the White House and chaired by U.S. Department of Commerce Secretary, Juanita Kreps. The Kreps Report reaffirmed and reiterated Tobin”s recommendations. Both studies were totally ignored by ALL governors from 1975 through 2016. On the contrary they continued with a fiscal policy of spending and borrowing. Please see the graphic below. and read: The Citizen’s Memorandum: A Path To Puerto Rico’s Recovery https://franklindelanolopez.com/2016/08/05/the-citizens-memorandum-a-path-to-puerto-ricos-recovery/ via @trueblue51
Since the Tobin report was made public 42 years ago, governors, mayors and public officials adopted the easy road to patched budget deficits with two tools; a) loans and b) taxing the people. Since 1973 Government Development Bank presidents together with investment bankers, banks, law firms and consultants knowing the fragile financial conditions of Puerto Rico decided to issue bonds debt because of the $ 2 billions plus in fees. They all knew, bonds bankers, lawyers and consultant including the government, that Puerto Rico was going to default it’s public debt. But greed for fees was more important that the well being of the people. This is a very compelling argument for conducting a thorough investigation and present it’s finding to the press and the public. At least two governors ordered the issuance of tens of billions of dollars with investment companies firms where they had close family members as executives; Mr. Luis Fortuño and Ms. Sila María Calderón.
It was a huge public mistake for members of Congress and The White House, to appoint two bankers involved and responsible for the crisis, to be member of the Board. As of this writing the members of the Federal Supervisory Fiscal Board have not made public detailed financial statements as mandated and in violation of the Federal Ethics law. They have refused to provide a public itemized report of the payments of $52.4 millions of dollars to law firms, particularly when the Board’s Chair is the brother in law of Mr. Pedro R. Pierluisi, a senior partner of the FSFB’s principal legal advisor. The Chief of Staff of the FSFB is the former chief of staff of the former resident commissioner’s Puerto Rico office. These are serious conflicts of interests that should be addressed either by your court or Congress.
Adding insult to injury, Washington (despite the fact that it was announced that it was the FSFB decision) appointed Natalie Jaresko, Executive Director of the Federal Supervisory Fiscal Board with a salary of $625,000 a year (President Trump’s salary is $ 400,000.00) plus one monthly trip to the Ukraine, a car with driver, security and many other perks. This individual, who seems to be taken out of a spy novel by John Lacarré, was the subject of multiple investigations by a European journalist group called Consortium News. She was given a Federal fund of $ 150 million that was supposed to be used to promote middle and small businesses in the Ukraine and Moldava. Instead she paid herself millions in bonuses. What moral grounds does Ms. Jaresko has to demand pain and suffering to a population with 50% living under the poverty level standards? Please see: How Ukraine’s Finance Chief Got Rich – Consortiumnews Nov 10, 2015 … Exclusive: Ukraine’s Finance Minister Natalie Jaresko collected at least $1.77 million in bonuses from a U.S.-taxpayer-funded investment … https://consortiumnews.com/…/how-ukraines-finance-chief-got-rich/
Finally, The U.S. Government, by legislating PROMESA and creating the FSFB and demanding austerity programs, cuts and economic policies without a strong and robust economic development and job creation program are coercing and forcing the exodus of the Puerto Rican society to stratospheric levels. Dismembering families and pushing them to seek “the American dream” in the states of the Union. In the last two years alone 240,000 have left the archipelago affecting government revenues drastically. This exodus weakens further a dying economic environment reducing the tax base and government income. The values of real estate have fallen between 40 to 60% affecting the capacity to lend of six banks. The International Criminal Court recognizes coercive acts and public policies, including economic, that forced massive numbers of population to move from their place of origin a crime against humanity. Specifically, Article 7 (1) (d) “Crime against humanity of deportation or forcible transfer of population”. The United Nations Human Rights division, the Organization of American State, the U.S. Department of State and the International Criminal Court have been advise of the plight of the people of Puerto Rico.
Imposing higher tariffs of electricity, water and more taxes will fuel massive population exodus with catastrophic effects and dismembering further the people of Puerto Rico. I know that you probably have the most difficult job in our Nation. But making the people of Puerto Rico pay for the corruption of more than $27 billions by elected and appointed officials for the trust that they gave them at the ballot box is not an option. All the Presidential Task Forces appointed by The White House since George H.W. Bush have recommended that Puerto Rico must deal with the status issue. A policy of patches is not the solution. As Dr. Martin Luther King once said, “It is always the right moment to do the right thing!’ God bless you!
Franklin D. López