Obama Holdovers Are Making Puerto Rico’s Recovery Much Less Possible

Seton Motley | Less Government | LessGovernment.org
We Must Improve the
Ground for Recovery

The most damaging and pernicious of the nigh infinite elements of the Washington, D.C. Swamp – which President Donald Trump has pledged to drain – is the leftover personnel.

Holdovers from the Barack Obama Administration especially – and residual creatures generally. Leftist ideological hacks – and permanent DC denizens. All of whom have very comfortable nests – feathered by DC’s Swampy foulness.

Defenders all of the awful status quo.

Trump has made some serious mistakes. None of them is more serious than allowing so many of these people to remain in DC after he arrived.

A quintessential example hereof – is the Obama-staffed Puerto Rico (PR) Control Board. Created by United States Congressional law – to deal with the PR government’s $72 billion debt.

The Obama Holdover Board is breaking the laws pertaining to how PR is supposed to manage the debt – and egregiously abusing many of the people who have lent Puerto Rico so much coin. All while feathering further their own nests. Obama-DC Cronyism – gone Caribbean.

Is the Obama Board as incredibly terrible as we say? We may have undersold it:

“The (Obama) White House announced…the appointment of seven people who will serve on a financial control board overseeing the restructuring of Puerto Rico’s $72 billion debt.

“The board was created…to get the U.S. territory’s financial house in order and to keep it from getting sued, along with setting up plans for paying off creditors down the road.”

If the Obama Board’s charge is to “get (PR’s) financial house in order” – they are doing a sincerely lousy job:

“(I)t would appear that some of those appointed to solve the problem are more concerned with preserving their own reputations—as well as their future political career—than with doing the job they were hired to do….”

If the Obama Board’s charge is “keep (PR) from getting sued” – they are doing a seriously lousy job:

“One among many mistakes made in the last decade has been the use of so-called COFINA bonds (named for their Spanish acronym) to circumvent nominal limits on debt accumulation, which allowed Puerto Rico’s fiscal liabilities to become far greater than would otherwise have been possible. COFINA bonds are backed by the revenue collected from sales taxes, and are distinct from the general obligation bonds held by investors….

“While Puerto Rico’s constitution guarantees payment on general obligation bonds, there is no such explicit guarantee for COFINA bonds. Yet while the commonwealth was forced to default on $780 million in general obligation debt, COFINA bondholders have continued to receive on-time payments, an act which some hedge funds contend is unconstitutional. The financial control board has requested the lawsuit be stayed, in spite of a ruling by Judge Francisco Besosa that it should be allowed to proceed.”

Which brings us to the Obama Board’s third charge – “setting up plans for paying off creditors.” Why is the Obama Board so insistent on violating the constitution, breaking the law and attempting to ignore the judiciary?

“One point that’s been made is that at least two of the members serving on the financial control board have significant personal interests in COFINA bonds.”

Good, old-fashioned Obama cronyism. Exported to the Caribbean’s Shining Star.

Obama appointed Board members to whom Puerto Rico owes a great deal of money – but not in the format the law mandates be paid first. So they’re simply jumping their own debt over the constitution, the laws and the general obligation debt-holders – and into the head of the line.

What else helps explain why Obama’s Board is doing this?

“It’s also worth noting that the chairman of Puerto Rico’s financial control board, Jose Carrion III, is a major shareholder with Banco Popular, which issues COFINA bonds.”

Get all that? The Chairman of the Obama Board – issues the bonds the Obama Board is illegally paying off first. And two members of said Obama Board – are huge holders of said bonds.

How very Obama of all of them. If this sounds at all familiar – it is because it is almost exactly how Obama illegally handled the debt when he commandeered control of General Motors. Paying off union cronies – ahead of those legally first in line.

Which brings us to the huge PR problem going forward.

Even as we type and read, Puerto Rico is most unfortunately getting crushed by a second consecutive massive hurricane.

After which, they are going to need billions of dollars of investment to recover and rebuild.

The conduct of the Obama-infested Control Board – is rendering this prospect nigh impossible.

Why would anyone invest anything in Puerto Rico – when the Obama Board charged with determining repayment is so utterly corrupt?

The very best thing Trump can do to help Puerto Rico recover from Hurricanes Irma and Marie – is to first help them recover from Hurricane Obama.

Trump desperately needs to fire all seven Obama Board members. And replace them with non-crony, un-conflicted people – who will actually adhere to PR’s constitution and laws.

PR desperately needs this – if they are to have any hope of any economic future.

This first appeared in Red State.

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