Congress, the U.S. Supreme Court to Address Issues Critical to Puerto Rico

Today, the U.S. Supreme Court will hear arguments on the dispute regarding the validity of the manner in which members of the Financial Oversight and Management Board for Puerto Rico (FOMB) were appointed. The U.S. Court of Appeals for the First Circuit determined that FOMB’s members should have been subject to a Senate confirmation process, and have therefore been acting unconstitutionally since the Board’s formation. Additionally, the case could open the door to a review of the decisions reached in the 120-year old Insular Cases, which determined that the U.S. Constitution did not apply to Puerto Rico or other U.S. territories if the U.S. government did not wish for it to apply. 

Meanwhile, the U.S. House of Representatives is considering an omnibus budget bill that Puerto Rican authorities hope will include funds to avoid the collapse of Medicaid in Puerto Rico. Other matters of importance to Puerto Rico which may or may not make it into the bill include a waiver on the federal ban on cockfighting – a ban the Puerto Rican government is also hoping to overturn in court, providing friend of the court testimony in favor of plaintiffs alleging that the prohibition is unconstitutional – as well as full Child Tax Credit (CTC) access for Puerto Ricans.

Despite Deadline, FEMA Will Continue Deliberations on Puerto Rico Permanent Works Projects

Approving a request by the Puerto Rico Central Office of Recovery, Reconstruction, and Resiliency (COR3), FEMA has elected to extend its deadline to examine fixed cost estimates for the post-Maria reconstruction projects it will finance under the Stafford Act. The original deadline for these cost estimates was Friday, October 11 and no new specific deadline has been set. 

“Due to the magnitude of Hurricane Maria’s impact, FEMA acknowledges that there is still much work to be done by the applicants, COR3, and FEMA [regarding the] fixed cost estimates for infrastructure Projects in Puerto Rico. FEMA and COR3 will work together to establish achievable objectives and specific deadlines so that fixed cost estimates can be completed,” reads a statement by FEMA.

Settling the Debt Has Cost Puerto Rico More than $1 billion, and Counting

Puerto Rico has spent more than $1 billion in public funds trying to restructure its debt, states a report by El Nuevo Día newspaper.

According to the report, $360 million of that amount has been spent over the past two years on legal and consulting fees for the firms working on the debt renegotiation. Additional money was spent on expenses associated with the Puerto Rico Sales Tax Financing Corporation (COFINA, in Spanish), which cost Puerto Ricans $332 million; contracts granted by the Alejandro García Padilla administration in its efforts to modify the debt before PROMESA was signed into law, which cost a total of $250 million; and the operating costs for the Financial Oversight and Management Board (FOMB) and the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF, in Spanish), which collectively cost nearly $50 million.  

Among the 47 firms paid for their work on Puerto Rico’s Title III bankruptcy cases are Proskauer Rose, Alix Partners, Millstein & Co. and Cleary Gottlieb.