op-ed

Public Trust In Puerto Rico’s Oversight Board Crumbling Before Their Eyes

Christopher D. Coursen Founder, Status Group

The tide of honesty and transparency seems to finally be rising in Puerto Rico in sharp contrast to its historically sordid and corrupt form of government. Puerto Ricans on the island, like Representative José Enrique “Quiquito” Meléndez, and interested parties on the mainland, like the National Legal and Policy Center (NLPC), have finally had enough of the perpetuation of bad leadership and corruption and are demanding to see change for the better on the island.

After almost two years, one thing is crystal clear: The Oversight Board, which was created by legislation in 2016 entitled PROMESA, has been a complete failure and has not achieved anything of significance.  The Board has not fulfilled any of its stated objectives to reform government, instill fiscal discipline, and return the Commonwealth to a healthy position in financial markets. The Board has repeatedly blocked access to the Commonwealth’s financial data and economic projections and has refused to negotiate in good faith with creditors for many months.

This intransigence was highlighted last month in a damning letter to the Oversight Board from House of Representatives Natural Resources Committee Chairman Rob Bishop, who wrote to express his “frustration with your lack of creditor engagement.”.  The Board’s approach to the recovery situation is not only confusing, it is arguably unethical.  Ostensibly picked to oversee and implement recovery, the Oversight Board appears to be more interested in lining their pockets by  swindling bondholders, many of whom are  retired seniors living on a fixed income.

Last month, research released by NLPC revealed that Ana Matosantos, a Board Member selected by House Minority Leader Nancy Pelosi, and her family business, the Matosantos Commercial Corporation, of which she is a Board Member, have secretly been building up a considerable renewable energy business.

Documents from NLPC reveal that the Matosantos family has a solar energy facility which sells energy to the state-owned electric monopoly, PREPA, and in return, the business receives power credits during peak energy usage.  Furthermore, documents reveal that the family has built a second renewable energy company that seeks to dominate all of the island’s renewable energy business. Details about this business are difficult to ascertain as the family has gone to great lengths to conceal their role and ownership.

The deeply troubling part of this situation is that none of this information was ever disclosed in Ana Matosantos’s financial disclosure forms at any time. Some legal experts now believe that the failure to disclose these details is a violation of PROMESA and federal ethics rules – specifically, 18 U.S.C. 208, which is incorporated in PROMESA as § 109(a).

Moreover, no one knows exactly why Matosantos voted “No” to the restructuring agreement last year, which resulted in taking PREPA into bankruptcy. Many believe she did so to help shape the utility to her family business’s liking.  If she did, this is not only a further erosion of the public’s trust, it is a potential criminal action.

Worse still, the Board’s General Counsel, Jamie El Koury, seems not to be troubled at all by the recent allegations. He stated at a recent meeting in San Juan that “the determination was made that there was no conflict of interest and that the financial disclosures had been complied with “multiple times with regard to Matosantos’s interests”. There is a procedure for looking into these types of matters, but it appears not to have been followed by his Office because the evidence  seems to be  contrary to El Koury’s  assertions.

As if these actions by Matosantos were not egregious enough, there also seems to be a serious case of nepotism within the Oversight Board. The Chief of Staff to the Board is none other than Rosemarie “Mai” Vizcarrondo-Carrion, the cousin of the Oversight Board Chairman, Jose Carrion. Her taxpayer-funded annual salary is $120,000– over six times the salary of the average Puerto Rican.

Moreover, prior to her job with the Board, Vizcarrondo-Carrión worked for former Puerto Rican Resident Commissioner Pedro Pierluisi, a leading voice in Washington for the passage of PROMESA, which established the Oversight Board in question.

Conveniently, former Resident Commissioner Pedro Pierluisi happens to be Jose Carrion’s brother-in-law And Pierluisi is now a partner at O’Neill Borges, a law firm that advises the Board, participates in federal mediation with bondholders, and has been arranging meetings with Members of Congress for Board members. You need a detailed road map to follow all of the intertwining relationships and activities of the principals!  But what is painfully clear is that Carrion likes to, and in fact does, “keep it in the family” when it comes to his work as Chairman.

This long and sordid accounting of improprieties, and perhaps worse, should be a wake-up call and a restructuring opportunity for Chairman Bishop and the Trump Administration. Indeed, it cries out for action!

It is axiomatic that bad leadership begets bad policy, and blatant nepotism is certainly an exacerbating factor. With hundreds of millions of dollars in relief flowing to the island of Puerto Rico, the nefarious dealings amongst the aforementioned family members of the Puerto Rican elite ought to prompt leaders in Washington to reconsider whether Matosantos and Carrion are doing their jobs in an honest and trustworthy fashion. The clear answer appears to be a resounding no.

The sooner that President Trump and Republican Congressional Leaders realize that there are members of the Oversight Board that are clearly unfit to serve, the sooner they can replace them with individuals who are serious and dedicated to restoring fiscal responsibility in Puerto Rico. Given the recent evidence of blatant conflicts of interest of Ana Matosantos, her removal seems like the best place to start. And that review and her subsequent removal needs to happen now.

Hon. Christopher D. Coursen served as majority counsel of the U.S. Senate Commerce Committee & chief counsel of the Communications Subcommittee in the 1980’s.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.