Spotlight on Puerto Rico – Statehood wins landslide vote marred by boycott, low turnout

By Jennice Fuentes / Fuentes Strategies

Puerto Rico held its fifth non-binding status referendum on Sunday, as 97% of voters who turned out voted for the Island to become the 51st state. The New Progressive Party (NPP) was the only political party that participated in the vote, while all opposition parties called for a boycott, resulting in the lowest turnout in history for such a referendum. The pro-Commonwealth Popular Democratic Party (PDP), the Puerto Rican Independence Party (PIP), the Working People’s Party (PPT in Spanish), and other opposition political movements called for Puerto Ricans to abstain from voting as a protest to what they saw as a rigged process that was not federally sanctioned. Only 23% of registered voters turned out to vote in an Island that averages 80% turnout in most elections. Only around 512,000 voters showed up to the polls and of those, 502,000 voted for statehood. For the previous referendum in 2012, 1.9 million voters showed up to the polls and 836,000 voted for statehood.

The non-binding vote faces an uphill climb on Capitol Hill. In response to the 2012 plebiscite, a provision in a 2014 Congressional statute was made where the US Department of Justice (DOJ) would evaluate the language of the ballot to ensure it complied with the Constitution, laws, and policies of the US. Upon DOJ approval, Puerto Rico would obtain $2.5 million in federal funding to finance part of the plebiscite process. After the DOJ rejected the first ballot because it did not include the current status, among other objections, the Puerto Rican Legislature amended the plebiscite law and resubmitted it to the Attorney General. Press reports indicate that the DOJ told the Governor that he needed to postpone the vote to give the Department sufficient time to review the new ballot language, but the Governor refused and proceeded with the vote on June 11th.

Puerto Rico spent around $8 million in the plebiscite process. Governor Ricardo Rosselló argued that other states had low turnout when they voted to join the union and he has a mandate to implement the “Tennessee Plan,” where he will appoint 7 “Members of Congress and Senators” from Puerto Rico who will travel to Washington, DC and demand to be seated as the Puerto Rico “Congressional Delegation.”

Congressman Soto ready to co-sponsor statehood bill in Congress

Democratic Congressman Darren Soto (Florida), who is the first Puerto Rican elected to Congress from the Sunshine state, announced he will be the first co-sponsor of a bill to admit Puerto Rico as the 51st state. The legislation, H.R. 260, was first introduced by Resident Commissioner in Congress Jenniffer González, a Republican, and would make Puerto Rico the 51st state by 2025. The measure is based on the premise that Puerto Rico would obtain $2.5 million for the referendum in conjunction with DOJ approval of the definition of the status options on Sunday’s referendum. Since Puerto Rico held the vote without DOJ approval, González’s bill will have to be amended to reflect the new circumstances.

FOB urges bankruptcy judge to resolve COFINA/GO issue quickly

The Fiscal Oversight Board (FOB) urged Federal District Court Judge Laura Taylor Swain to rapidly resolve the controversy between General Obligation (GO) and Sales Tax Corporation Fund (COFINA in Spanish) before November 1st. Swain, a New York bankruptcy judge, is in charge of the Title III debt restructuring proceedings in Puerto Rico after being appointed to the position by Supreme Court Chief Justice John Roberts, per a provision in the PROMESA federal law. The FOB urged Swain to move quickly on the matter because by November 1st Puerto Rico might be in a cash-crunch and could need a portion from the Sales and Use Tax (SUT) revenues to operate the government. COFINA was set up to have a portion of the SUT deposited directly to trustees that would pay its creditors. GO bondholders argue that this is unconstitutional and the Constitution of the Commonwealth prioritizes GO payments above other considerations.