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estatus, junta de control, pobreza

America’s Little Colony

“Puerto Rico is open for business!” proclaimed the island’s new governor Ricardo Rosselló during a media tour this previous week. In coming weeks, Rosselló will kickstart a private investment summit where the government will auction off massive public private partnership projects, mortgaging everything from highways to hospitals and schools. In fact, the governor’s first signed law, was a revamping of Puerto Rico’s public private investment law, now allowing investors to cherry pick areas they wish to buy up without having to wait for a formal request for proposal.

For the rest of this tiny U.S. territory of 3.5 million people, things are not as hopeful. Taxes and the cost of living have increased radically during the previous decade. Rosselló squeezed through the 2016 elections with a campaign criticizing the alleged 90 taxes allegedly imposed by the previous administration. Ironically, with a little more than two months in office, Rosselló has already proposed 91 more taxes, according to his critics. In what seems to be a race to see who can squeeze more out of Puerto Rican taxpayers, a small group of American investors and bondholders are in the lead.

For them, Puerto Rico is a magical land where the local legislature approves laws that exempt foreign millionaires from paying taxes, and where city governments hand over public lands for the construction of large pharmacy chains. U.S. corporations are wearingly excised only 4% (compared to the stateside 35%), with talk of corporate tax hikes considered blasphemous among policymakers. The government will even subsidize hiring and will invest millions in public infrastructure to accommodate new private shopping malls.

Since 2014, vulture fund investors also started gobbling up discounted bonds at pennies on the dollar with hopes to cash in at 100% of their price. For decades, bond investors in general have reaped big time on the local bond market, having gobbled up billions in debt and breaking municipal bond records. Puerto Rico’s bond markets were bustling with its triple tax exemption, constitutional protections that assured that debts are paid before teachers and doctors, and commission rates up to nine times higher than the norm. Not to mention, bonds did not require ballot approval from voters, like elsewhere throughout the United States.

When the Puerto Rican government began showing signs of teetering on its debt payment, vulture funds and other investors successfully lobbied for the imposition of a Federal Control Board with sweeping powers to assure that debts are paid. Its members, examples of the revolving door of government finance, include ex-central bank directors who accumulated much of Puerto Rico’s bond debt and former executives from some of the banks that profited from the island’s bond emissions. The board director, in fact, holds at least a quarter million dollars in bonds.

An independent audit commission recently reported that up to $30 billion that may have been emitted illegally, much of which by the questionable circumventing of constitutional caps on borrowing. Morgan Stanley was also fined by the Financial Industry Regulatory Authority for selling bonds at “unjust and unreasonable” prices, as were 13 brokers for violating Securities and Exchange Commission (SEC) regulations. Last year, the SEC also fined UBS $15 million for misleading mutual fund investors and downplaying risks. Nevertheless, Rosselló’s legislative delegation has threatened to revoke the audit’s enabling law, stating that branding it as unnecessary. Similarly, one board members stated that “here the responsibility of paying the debt is of Puerto Rico’s government. It there is something that is out of line, it’s the government of Puerto Rico that has the responsibility to deal with that.”

Meanwhile, the Board continues to hack away at public services, ordering massive cuts to ensure debt payments. There is little that the Puerto Rican people can do about the matter, with the U.S. Supreme Court striking down last summer the island’s ability to legislate restructuring tools or levy new taxes on big box department stores. As a territory the island has no sovereignty, as it does not have the ability to participate in international organizations, ship most of its products on non-U.S. ships, or negotiate foreign trade deals. But not only does Puerto Rico lack the powers of sovereign country, as a U.S. territory it also lacks the presidential vote, congressional representation, and other tools taken for granted by the 50 states. Though it has an insular local government, the Federal Control Board calls the shots, with veto power over ay local legislation. Puerto Rico is in a stink, floating in limbo with no solution in sight.

Under the normal circumstances of any other Latin American country, Puerto Rico would be a hotbed of civil unrest. Heads of state have been ousted for much less, as miners in Bolivia blew up highways with dynamite, Ecuadorians set fire to tires and Venezuelans march by the millions. But in Puerto Rico’s case, the escape valve is found in a $90 plane ticket stateside. Over 89,000 islanders have emigrated in mass in 2015 alone, bleeding the island of workers, professionals and revenue.

But as bond holders clamor for even more cuts and residents continue to jump ship, profiteers are making a killing off of the misfortune of others. The resulting exploitation, in turn, is the modern version of gold mines and sugarcane fields.

Republished from Latino Rebels.

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municipios

O’Neill el intocable

Los deplorables sucesos ocurridos en Guaynabo nos dejan de manifiesto que cualquier otro alcalde acusado de las mismas monstruosidades que Hector O’Neill hubiera sido investigado y retirado de inmediata. Pero no a O’Neill; quien ha podido disfrazar su guille de caudillo sudamericano con el brillo de megaproyectos de cemento, centros comerciales y otros ejemplos de su visión de “desarrollo”. Su imperio construido sobre una corriente sin fin de IVU y patentes hacen que su municipio luzca como uno eficiente y modelo (a pesar de llegar solo al lugar 42 de los 78 municipios mejor administrados, según el Centro de Investigación y Política Pública). Pero por detrás de esa fachada, hay un político manchado por años de hostigamiento sexual, el abuso de poder y evidente corrupción.

Es noticia del momento la transacción de una demanda federal del 2016 sobre horrendas alegaciones de hostigamiento sexual. Pero se olvidan que también perdió una demanda federal del 2005 por abuso de poder y violaciones a derechos civiles, condenado a pagar medio millón de dólares, luego bajado a $135,000. O’Neill como todo un gánster, había utilizado a la policía municipal como su pandilla personal para arrestar e intimidar empleados de una compañía de construcción.

O que en las primarias del 2012, varios altos funcionarios del municipio maquinaron para robarle la elección al representante Ángel Pérez; realizando transferencias ilegales de empleados municipales para artificialmente llenar las listas de sus electores. O que en el 2013 exoneró a los implicados, concluyendo que no había hecho nada malo.

Se olvida que O’Neill ayuda a sus amigos del alma regalando, por ejemplo, subsidios municipales, poniendo a la disposición 60 cuerdas de terreno municipal y cabildeando para $17 millones en fondos públicos para un mega mall de uno de sus donantes, Rafael Vizcarrondo. O expropiándoles las casas a los residentes del Amelia en un acto declarado el año pasado como ilegal por nuestro Tribunal Supremo, para construir un desarrollo turístico. (Cabe señalar que fue su amigo Carlos Pesquera quien llevó el mega contrato para este proyecto).

O que en el 2013, el Contralor de Puerto Rico encontró que el 83% de las cotizaciones del municipio eran falsificadas; ilegalidad que fue referida al Departamento de Justicia. O que en una entrevista en el 2008, el corrupto convicto y ex-senador Jorge de Castro Font alegó que O’Neill le había dado dinero para confirmar a sus amigos y sus familiares a posiciones en el gobierno.

O’Neill siempre ha podido hacer lo que le da la gana sin tener que sufrir las consecuencias. Pero como siguen apareciendo chavos para cerrar urbanizaciones, construir rotondas y trabajos para sus funcionaria de colegio, el imperio de Guaynabo City sigue con toda su fuerza. Aún con la más reciente demanda en su contra, O’Neill aumentó ventaja en las elecciones del 2016, demostrando que su integridad como persona es secundaria al “éxito” de su municipio. Mientras tanto, su base sigue haciéndose de la vista larga, dejando que el fanatismo sobrepase a la moralidad y la integridad humana.

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estadidad
estatus

A false majority for statehood

Puerto Rico’s legislature just approved yet another statehood referendum to be held during the summer of 2017. This will represent the fourth vote in the last 25 years on the matter as well as the latest attempt by the statehood movement to squeeze another star onto the U.S. flag. Nevertheless, a closer look reveals a scheme on behalf of the ruling New Progressive Party (NPP) to create an artificial majority in favor of statehood. Their tactics involve trickery in wording ballot options in a manner that will favor their preference.

A quick review of how they have maneuvered previous votes on the matter reveal their intentions. The first of NPP-authored referendum occurred in 1993. The options included statehood, independence, or a continuation of the current commonwealth model. After aggressive campaigning on all sides, commonwealth won with 48.6%, with statehood trailing second at 46.3%. Despite the commonwealth win championed by the opposition Popular Democratic Party (PDP), the NPP won reelection three years later and again began conjuring another referendum.

In 1998, a second NPP referendum was rolled out. This time, the question was revised with the intention to split PDP sympathizers between various options and thus produce a plural majority for the statehood option. Along with commonwealth, “free association” was added to the ballot options. With this, the NPP hoped to capitalize upon technical divisions within PDP ranks, whom have long debated among themselves whether or not to continue the current territorial commonwealth status or developed it under a United Nations-defined form of association. After intense court battles a “none of the above” option was added to the ballot; ultimately winning the vote with 50.5%. The NPP soonafter lost the general elections with the PDP in power for two terms.

Upon returning to power in the 2008 elections the NPP initiated new efforts for a third referendum, held in 2012. This time, there would be two questions: first, voters were asked whether or not Puerto Rico should continue under the current commonwealth model. The second question asked citizens what they were to prefer in case that commonwealth lost, with the options being statehood, independence, or free association. Knowing that the commonwealth option alone no longer commandeered a majority of votes, the NPP knew that if it were eliminated from the ballot that it would be inevitable for statehood to win with a clear majority.

With no “none of the above option”, the PDP machinery ran a blank ballot campaign, hoping to protest what it saw to be an unfair referendum. Though the NPP expectantly won the vote by 61.2%, once blank votes were factored, its numbers stood at a mere 44.4%. The NPP’s marketing strategy was foiled, as the party’s exaggeratingly inflated majority felt upon deaf ears of the U.S. Congress. Though they carry no legal weight, the blank votes demonstrated that the majority of Puerto Ricans reject statehood.

Now, NPP is back in power and once again is cooking up another round of voting. The questions have been carefully crafted to produce the super majority it always hoped for, with the options being statehood and independence with “free association” brushed off by the NPP as a modality of independence. “Commonwealth” was eliminated from the ballot in its entirety. PPD proposals to include commonwealth and free association as their own ballot options were shot down. Finally, the law which mandates the vote includes specific text meant to not tally blank votes.

The law referendum represents quite possibly the most obviously biased of the NPP’s initiatives. Even the Puerto Rican Independence Party voted against the measure; a rarity for a party that often aligns itself with the NPP to erode PPD-supported referendum options. The blatantly skewed law narrative reads as a manifesto, clamoring for statehood as a means to conquer Puerto Rican poverty. Not to mention, lawmakers carefully assured that the bill number would be one in sync with their goals: Senate Bill 51.

The NPP has rushed a number of controversial bills through the state legislature in recent weeks, including labor reforms that rock both private and public sector employees. The biggest austerity measures are soon to follow and should echo the protests and strikes that characterized the precious NPP administration. This ill-timed referendum is simply a rhetoric effort to pump much-needed political capital into the NPP, who won the 2016 elections with the smallest mandate in the island’s history. So journalists and analysts beware: the coming statehood vote is far from transparent, participatory, fair, or well intended.

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