On Monday evening, February, just two days before the next Title III hearings in San Juan, the Latinx Law Student Association (LaLSA) at the NYU School of Law organized a panel discussion entitled, “Puerto Rico Se Levanta: Sovereignty Without Representation.”
Director of the Center of Puerto Rican Studies Dr. Edwin Meléndez was among the panelists, which also included María Meléndez, Chair of LatinoJustice PRLDEF; Jaime Farrant, a Board Member of the National Puerto Rican Agenda; and Christopher Landau, a lawyer that has previously represented the Commonwealth of Puerto Rico in two US Supreme Court cases.
After opening remarks by law students Melissa Quintana and Victoria Hamscho, the two Executive Co-Chairs of LaLSA, moderator Clayton Gillette began the discussion with a question on the future of PREPA, the distressed power utility in Puerto Rico. The Federal Oversight and Management Board (FOMB) recently held a listening session on the matter during a meeting in New York City earlier this month.
Mr. Farrant was the first to respond, pointing out that the FOMB had requested a loan of up to $1.3 billion on behalf of PREPA—despite strong opposition from bondholders and contractors alike. Otherwise, Mr. Farrant warned, PREPA would likely be forced to cut service in the weeks ahead (A final hearing on the matter will be held on February 15th).
Dr. Meléndez then addressed the recently announced plan to privatize the power utility. Governor Ricardo Rosselló estimated that the process could take up to 18 months, beginning with the liquidation of assets—a common practice after bankruptcy, according to Dr. Meléndez. However, he went on to criticize the model of privatization proposed by the Puerto Rican government. There are other models, however, that Dr. Meléndez suggested could be taken into consideration, while noting the strong interest in solar energy on the island. Moreover, PREPA is subject to the in-court bankruptcy proceedings under Title III of PROMESA, which have not concluded, thus making privatization a preemptive move on the part of the Governor.
Migration then came up as the next topic of discussion. The latest fiscal plan submitted to the FOMB by the Puerto Rican government, for example, expects 19% of the population to leave the island by 2022. By comparison, an October report released by the Center for Puerto Rican Studies estimated that the population will decrease 14% by the end of 2019. These statistics prompted Maria Meléndez to lament the shrinking workforce on the island, which she described as a ‘brain drain.’ She added that Florida—where more than 270,000 travelers have landed via flights from Puerto Rico since Hurricane Maria—was a “hostile jurisdiction” for Puerto Rican migrants, in her opinion, due to the poor infrastructure with which the state was receiving new arrivals.
This led into a discussion of the ongoing status debate. Mr. Farrant characterized the recent push for statehood as a distraction, or in the words of Senator Marco Rubio, “a waste of time.” Last month, for example, the Governor introduced a ‘Statehood Commission,’ a shadow delegation responsible for lobbying Congress to admit Puerto Rico into the Union as the 51st state. Mr. Farrant also noted that the Governor had signed into law a bill that would allow Puerto Ricans to vote for president in the US general elections. The United States Court of Appeals for the Seventh Circuit, on the other hand, rejected a bid to extend these voting rights to U.S. territories, thereby invalidating the new law in Puerto Rico. Mr. Farrant argued that reconstruction should instead be the focus of the local government.
Mr. Landau followed up by describing the status question in the aftermath of Hurricane Maria as a chicken and egg scenario. In other words, it could be argued that in order to resolve the ongoing economic crisis, Puerto Rico should resolve the question of its political status, and vice versa. Echoing Mr. Farrant’s sentiments, he further described the push for statehood as “not realistic” given the difficult circumstances.
The political status of the island was also the backdrop for a discussion of the federal response to the devastation caused by Hurricane Maria. Mr. Landau stated that the response by FEMA would be “unacceptable” anywhere else in the United States. However, he added that the decaying infrastructure, among other things, should be taken into consideration as well. Mrs. Meléndez then reinforced the notion that political status has influenced the lackluster relief effort led by FEMA.
With regard to PROMESA, Mr. Farrant said that he expected the Federal Control and Oversight Board to remain in Puerto Rico for an extended amount of time. Argentina, for example, spent more than a decade in court battling its creditors. Mr. Farrant then speculated as to why force majeure, a legal clause that acknowledges the effects of unforeseeable circumstances that would prevent one party from fulfilling a contract agreement, has not been used as an argument for relief of the debt. Force Majeure, he explained, was commonly used after natural disasters, with Hurricanes Sandy and Katrina being two such examples. Regardless of the potential for debt relief, Dr. Meléndez argued that without an infusion of capital into the island, there would be no economic recovery. (Puerto Rico is predicted to be the second-worst economy of 2018, after Venezuela).
Next, the panel took a moment to acknowledge the challenges that Puerto Rico would be facing in the near future—many of which been exacerbated by Hurricane Maria. The public pension system, which is scheduled to run out of money this year, is one such example. A Medicaid cliff is also on the horizon, with Congress yet to provide additional funding for the program. In addition, a majority of post-Maria moratorium agreements expired last month, meaning a wave of foreclosures is likely to hit the island.
The final question presented to the panel had to do with the possible repercussions here on the mainland. Mr. Landau remarked that the upcoming elections will help to gauge the influence of the growing Puerto Rican electorate, especially in states like Florida. The solidarity movement among the diaspora, close to six million strong, is another reason to remain hopeful, according to Dr. Meléndez, especially as lawmakers debate the possibility of a Marshall Plan for Puerto Rico. Moreover, a significant increase in the independent vote is a potential game changer for transparency and accountability in government vis-à-vis alliances with like-minded sectors from other political affiliations in PR. Only time will tell, however, what the future may hold.