President Obama today announced the seven members who will make up the oversight board that is charged with helping right the ship that is Puerto Rico’s debt-laden economy.
Legislation passed in June set up the control board and required the White House to choose from a list recommended by Republican and Democratic congressional leaders by September. Similar to a board that oversaw the District of Columbia in the late 1990s, the panel’s seven members will oversee negotiations with creditors and the courts over reducing some of Puerto Rico’s roughly $70 billion debt. It will also oversee the U.S. territory’s development of a new fiscal plan to bring the island out of its financial woes.
In a statement, Obama said those appointed to the board have a broad range of experiences and the depth of knowledge needed to tackle the challenge of righting Puerto Rico’s embattled economy. Four of the members of the board are of Puerto Rican descent.
“The task ahead for Puerto Rico is not an easy one, but I am confident Puerto Rico is up to the challenge of stabilizing the fiscal situation, restoring growth, and building a better future for all Puerto Ricans,” Obama said.
According to the White House, members of the board include Carlos Garcia, founder and CEO of private equity firm BayBoston and a former CEO of Puerto Rico’s Government Development Bank; Ana Matosantos, a former director of the California Department of Finance; Jose Ramon Gonzalez, president and CEO of the Federal Home Loan Bank of New York; Andrew Biggs, a scholar at the American Enterprise Institute; University of Pennsylvania law professor David Skeel; former bankruptcy judge Arthur Gonzalez and Puerto Rico insurance executive Jose B. Carrion.
The governor of Puerto Rico will be an eighth, nonvoting member of the board. The board must elect a chair, hire staff and open an office within 30 days.
Some of the names sparked criticism on the U.S. island territory, where the idea of a fiscal control board is deeply unpopular. Rep. Luis Vega Ramos, a member of the Puerto Rico House of Representatives from the majority Popular Democratic Party, objected to the appointment of Carlos Garcia, who he said was “one of the principal architects” of the fiscal crisis as president of the Government Development Bank under former Gov. Luis Fortuno.
“The inclusion of Carlos Garcia to the fiscal control board is an affront to Puerto Rico,” Vega said.
Puerto Rico has been mired in economic stagnation for a decade. Financial problems grew worse as a result of setbacks in the wider U.S. economy and unchecked government spending. Thousands have fled the territory for the U.S. mainland as businesses on the island have closed, schools have struggled with limited electricity and hospitals have asked for cash payment in advance for some medication.
Both House Speaker Paul Ryan, R-Wis., and House Democratic Leader Nancy Pelosi of California praised the new board.
“Drawing from a wide variety of practical experiences and policy prowess, the members have what it takes to serve Puerto Rico and help get the territory on a path to fiscal health,” Ryan said in a statement.