Spotlight on Puerto Rico – Governor’s rep in Fiscal Oversight Board (FOB) resigns

By Jennice Fuentes / Fuentes Strategies

Governor Ricardo Rossello’s official representative on the Fiscal Oversight Board (FOB), Elías Sánchez, has resigned just six months into the post. Sánchez, a close confidante who also served as Rosselló’s campaign manager, said he was satisfied with the work he accomplished thus far, citing approval of the Fiscal Plan, the Island’s new budget, and the initiation of Title III proceedings to restructure Puerto Rico’s public debt. Governor Rosselló has appointed Government Development Bank (GDB) President Christian Sobrino to replace Sánchez.

Open-government advocates were skeptical of the resignation, claiming that Sánchez never properly completed his financial disclosure forms. The publicly released documents omitted his clients as partner in the firm Wolfe Popper, as well as that income.

FOB vetoes first law

For the first time in its short history, the FOB vetoed a law duly approved by Puerto Rico’s Legislative Assembly due to the bill’s inconsistency with the Island’s Fiscal Plan. The bill in question, SB 404, would have increased pension benefits for a portion of uniformed police officers. The Governor stated that he was in favor of the measure, but required to veto it due to the FOB’s refusal to certify it.

2,000 police officers would have benefited from SB404 by allowing them to earn pensions of up to 75% of their average highest salary, and would have also allowed some officers to retire at 50 years-old.

Unemployment, labor force participation, fall

Puerto Rico’s unemployment rate fell significantly last month to 10.1%, with the absolute number of unemployed workers at 111,000 in June. However, total employment also fell by 1.2% to 879,300, reflecting a marked reduction in the labor force participation rate, which fell to 39.4%.

Independent Statistics Institute Controversy

The Governor’s office has rejected the appointment of Dr. Mario Marazzi, a former U.S. Federal Reserve official, to another 10-year term as the Director of the Puerto Rico Statistics Institute. The Institute’s current board members have pushed back against the dismissal, citing legal statutes that only allow the Governor to fire the Institute’s Board Members for just cause, or if charges are filed against them.

Last Friday, the Governor announced the dismissal and replacement of three board members, and publicly supported Dr. Marazzi’s reappointment. However, in a press release rejecting the appointment, La Fortaleza said that the Governor had fired the three members hinting that he would want to appoint someone else and not «have their hands tied». The controversy is expected to be resolved by the courts.