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A Colonial Takeover: Proposed Puerto Rican Debt Bill to Give “Dictatorial Powers” to Unelected Board

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Juan González discusses a proposed bill backed by the Obama administration and congressional leaders that would create a new bankruptcy-type process specifically tailored for Puerto Rico. A House committee voted in favor of the Puerto Rico Oversight, Management and Economic Stability Act earlier this week. On the presidential trail, Hillary Clinton has backed the measure, while Bernie Sanders has opposed it. “The bill has provoked a furor among many island residents because it imposes a seven-member oversight board with dictatorial powers that harken back to colonial days, and because it is geared to protecting bondholders and paving the way for massive cuts in the island’s public services,” González writes in his column in the New York Daily News.

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Web ExclusiveDec 23, 2022“Latinos, Race and Empire”: A Talk by Juan González
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: So, Juan, you have a new piece out in the New York Daily News, which you retired from but are continuing to write columns for.

JUAN GONZÁLEZ: On occasion, not on a regular basis.

AMY GOODMAN: That’s called “Puerto Rico faces 'wholesale' colonial-style takeover to ease $2B debt.” Can you talk about this?

JUAN GONZÁLEZ: Yes. Well, as we’ve discussed here on the show several times, the—Puerto Rico has been asking for nearly a year now for Congress to give it legal authority to be able to restructure about $72 billion in debt that the government of Puerto Rico has said it cannot pay. So, finally, after months and months of wrangling and negotiations between Democrats and Republicans and the Obama administration, on Wednesday the House Natural Resources Committee, by a vote of 29 to 10, a bipartisan vote, did finally pass a bill that will now go to the full House, and then, if it passes there, to the Senate.

And that bill does have a restructuring mechanism in it for Puerto Rico, but it’s now really a poison pill, because in addition to providing the restructuring that the government of Puerto Rico has asked for, it’s also requiring the government of Puerto Rico to submit to a virtual total takeover of its economy. It would require a new oversight board of seven people, four of whom will be chosen basically by the Republicans; even though they will be appointed by the president, the president has to take them from lists provided by Speaker Ryan and by the Senate majority leader. So it’s basically going to be a Republican-dominated board. And most importantly—this is what rankles most people on the island—is that only one of the seven actually has to be a resident or have a primary business in Puerto Rico. So you’re in essence creating a board, an oversight—a control board that will be of nonresidents of the island running the financial affairs of Puerto Rico for the next five, possibly 10 years.

AMY GOODMAN: Is the model for this—I mean, is this similar to Washington, D.C.?

JUAN GONZÁLEZ: It’s similar, but much more tougher. In fact, there was a memo that the Republican leadership provided to the hearing on Wednesday that said that this was—that boasted that if Puerto Rico’s government “fails to comply with the fiscal plan” that the board approves, the board “may impose mandatory cuts … a power far beyond that exercised by the Control Board established [for] the District of Columbia.” So, the Republicans are boasting that this is much tougher than the District of Columbia’s control board. And, more importantly, in the District of Columbia, all five residents of the control—all five members of the control board had to be residents of the District of Columbia. This is an outside board now—and this outside board will control not only the finances. Any new laws that are passed have to be approved by the control board. Any capital investments on the island have to be approved by the control board.

AMY GOODMAN: I mean, it sounds—

JUAN GONZÁLEZ: It’s a complete takeover of the island’s economy.

AMY GOODMAN: Is it also a model for this somewhat, the unelected city managers that Michigan Governor Rick Snyder appoints, in charge of places like Flint?

JUAN GONZÁLEZ: Yes, but with this one big difference. The governor of—the governor of Michigan did have the power, under the laws that existed, to do that. Puerto Rico supposedly is a self-governing territory, that was granted self-government by Congress back in the 1950s. And so, this is a situation not just of a state imposing itself on a city, but of one nation imposing colonial control on another nation. And so, this is the problem that has really rankled folks. And now it’s become part of the presidential race, because Bernie Sanders obviously has come out strongly opposed to the bill. Today, Sanders is supposed to be having a conference call with Puerto Rican leaders to discuss possibly presenting an alternative bill in the Senate. And this bill still has to be voted on by the full House next week, and then it will have to be considered by the Senate. There are several senators—Bob Menendez, Dick Durbin and Sanders—who have come out against it. Any one of them could filibuster the bill.

AMY GOODMAN: So let’s go to Sanders for a minute. The Democratic primary in Puerto Rico is June 5th. Sanders says Puerto Rico’s $70 billion debt must be restructured in a way that does not deepen its economic crisis.

SEN. BERNIE SANDERS: It is unacceptable to me that vulture funds on Wall Street are demanding that Puerto Rico fire teachers, close schools, cut pensions and abolish the minimum wage, so that they can reap huge profits off the suffering and the misery of the children and the people of Puerto Rico. We cannot allow that to happen. We will not allow that to happen.

AMY GOODMAN: So, that’s Democratic presidential candidate Bernie Sanders. What is Hillary Clinton’s view on this?

JUAN GONZÁLEZ: Well, Hillary Clinton recognized that there are problems with the bill, but she supports it, as does the Obama administration, as does Representative Nydia Velázquez, who’s been a strong advocate of Puerto Rico, because what they see—

AMY GOODMAN: Nydia Velázquez is Puerto Rican.

JUAN GONZÁLEZ: Yes, but she and all of those supporters in the Democratic Party, their argument is, “Look, this is the best possible deal that you’re going to be able to get, that Puerto Rico will be able to get, under a Republican-controlled Congress. It’s either this or nothing.” And because there’s a $2 billion debt payment due on July 1 that Puerto Rico cannot pay, the total rush to the courthouse of all the creditors will begin July 2nd. So they’re saying, “There’s no time to be able to do anything different. We’ve got to swallow this poison pill.” There are others who say, “No, don’t pay the debt on July 1, and let the legal battle continue to play out and, of course, still wait for a Supreme Court decision on this issue.” So, we won’t—we won’t know what’s going to happen, but the first thing right now that could happen is that there will be a House vote a week after next when Congress comes back into session, and then the Senate will consider it in late June. So this is an ongoing story.

AMY GOODMAN: And, of course, we’ll continue to cover it, and we will link to your piece in the New York Daily News, that you retired from but are continuing to write columns for, that is called Puerto Rico faces 'wholesale' colonial-style takeover to ease $2B debt.” We’ll link to it at democracynow.org.

When we come back, we go to Chicago to a young activist who is threatened with deportation, she says, because she was exercising her freedom of speech. Stay with us.

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