Tuesday, March 29, 2016

Puerto Rico's Problem

Came up by default....

"Puerto Rico proposes 46% reduction of debt in restructuring" by Michelle Kaske Bloomberg News  February 02, 2016

Puerto Rico is seeking to cut its debt load by 46 percent in its first offer to investors, a proposal that might face revisions as bondholders fight to get the most repayment.

The commonwealth unveiled its plan Monday to reduce the island’s obligations and help restart an economy that’s failed to grow in the past decade. The proposal for a voluntary exchange would cut the island’s debt to $26.5 billion from $49.2 billion, put off all interest payments until the 2018 fiscal year, and affect even general-obligation bonds, which have the strongest repayment pledge, according to a restructuring proposal posted on the Government Development Bank website.

The plan might pit the commonwealth’s investor groups against each other. In the proposal, general-obligation bonds get more money back than sales-tax debt, called Cofinas by their Spanish acronym. Cofina investors might take issue with that, said Lyle Fitterer, head of tax-exempt debt in Menomonee Falls, Wis., at Wells Capital Management, which oversees $39 billion of municipal bonds, including Puerto Rico securities. The island, which doesn’t have access to municipal bankruptcy, might need a legal framework to bring all of the island’s creditors together, Fitterer said.

“I’m sure they’re not going to outright agree to this,” Fitterer said. “What happens to all the retail bondholders if they don’t consent to it? They’re probably going to need to have some legal means of getting this accomplished rather than some sort of consensual agreement because I would think there’s going to be a lot of arguing amongst bondholders.”

Puerto Rico and its agencies racked up $70 billion in debt by borrowing for years to fill budget deficits. Governor Alejandro Garcia Padilla in June said the commonwealth would seek to reduce its obligations by asking investors to accept losses on their securities and wait longer to get repaid. 

They never like to hear that.

Two agencies already have defaulted on payments, and the island faces a $2 billion principal and interest payment due July 1. Puerto Rico warned that it might place a moratorium on debt payments if the parties cannot agree on a restructuring plan by May 1, when a $422 million GDB payment is due.

Garcia Padilla has asked that the commonwealth and its agencies be given access to bankruptcy protection so officials may reorganize its debt. Republicans in the US House of Representatives are holding a hearing Tuesday to explore the case for setting up a Puerto Rico financial-control authority.

Almost all of Puerto Rico’s debt would be affected by the reduction, including general obligations, sales-tax bonds, GDB debt, pension bonds, and debt sold by the island’s highway authority.

“This proposal is a reflection of our commitment to work with our creditors on a sustainable solution that does not place the burden on one stakeholder group alone,” Victor Suarez, Puerto Rico’s secretary of state, said in a statement.

“A crisis of this magnitude must be addressed in concert, otherwise we risk our ability and the opportunity to escape the spiral of a stagnating economy, endless deficits and increasing debt.”


Don't worry; help is on the way.

"Puerto Rico’s imperial hangover" by Pedro Reina-Pérez   March 23, 2016

For nearly four decades, Puerto Rico’s police force illegally surveilled, tracked, and documented the lives of islanders sympathetic to the cause of independence from the United States.

Well, they are a part of the United States.

Late last year, authorities began releasing the last 4,000 surveillance files compiled between 1948 and 1986, in what constituted one of the most scandalous cases of government repression ever seen in a US jurisdiction.

Oh. Back when it was illegal -- not as if that ever deterred the government from breaking the law before.

Another 3,000 files had been released just previously and are now in the process of being organized. Together, these 7,000 files have gone unclaimed by their owners since 1998, when a court order was issued forcing the police to turn them over, unredacted and in their entirety, to the citizens who had been watched and followed. All the files are now available at the General Archives in San Juan.

We don't get that in the continental United States.

The turnover of these carpetas takes place at a moment of increasing historical and political complexity for Puerto Rico, given the financial insolvency of this unincorporated territory of the United States. Earlier this week, the US Supreme Court heard the second of two cases related to the island’s political condition. The insular government has an unpaid public debt of over $72 billion and claims that public money will run out in May, while its creditors, among whom are several hedge funds, are rushing to court to collect their part of it — a process that could take years, if Congress fails to act on the matter. 

I suspect they won't, and  they will blame parti$an$hip. Puerto Rico isn't Israel.

At risk is potentially the largest default ever to occur in the municipal bond market in the United States.

Who invests in those?

The situation has no legal precedent, given that the Puerto Rican government is not fully covered by the laws that apply to the states of the union. The amount in question — which does not contemplate the insolvency of the government retirement and public-health systems — is much greater than the per-capita indebtedness (the debt ratio) of states like Texas and California.

Actually, there is. The U.S government and a number of others have "defaulted" on odious debt. You wipe it clean because it was elite looting schemes and not the people's responsibility.

Around the same time your country is likely to descend into chaos and all sorts of bad things will start happening. 

What’s more, the island’s public corporations cannot — due to a recent US Appeals Court ruling — find shelter under Chapter 9 of the federal Bankruptcy Law, which puts them in a pretty much helpless position in the face of their creditors’ demands. The US Supreme Court’s hearing Tuesday was to decide whether Puerto Rico can pass a law to amend this matter. Some financial media are offering the ominous conclusion that the economy of Puerto Rico is “in a death spiral.”

And now comes the declassification and release of the police carpetas, which, though it has not received a great deal of public attention, is related, like the island’s financial situation, to the profound political inequality — some call it the “colonial situation” — of Puerto Rico vis-à-vis the United States.

The judicial process that brought the political surveillance of Puerto Ricans to public light began in 1987, when it was learned that the police had long maintained, and were still maintaining, secret lists and files on individuals and organizations that sympathized with island independence, despite the fact that such “sympathies,” under the protection of the First Amendment, did not, do not, constitute a crime.

And they called it freedom.

The full details were shocking: The authorities were keeping a card-file on approximately 152,000 men and women and organizations considered suspicious due to their support, real or imagined, active or merely rhetorical, for the island’s independence. (This number for a population at the time of approximately 3 million.)

Some 75,000 people were under systematic surveillance, and 16,000 had extensive, detailed files containing photographs and audio recordings. When news of the carpeteo — the file-keeping — became public, countless suits were filed against the government for civil rights violations.

They took over a decade to be settled. 

See file: NSA Unlocking Your Secrets 

And that was almost two years ago.

Official admission of the surveillance arrived amid a growing scrutiny of the police force after the murder of two young activists who, in 1978, were entrapped by police agents, taken to the top of Cerro Maravilla (the ironically named Wonder Peak), and executed, without a trial, without appeal. After a long legislative investigation of this incident, the police officers involved confessed to the premeditated murder and subsequent coverup.

The existence of the carpetas was revealed during the legislative hearings. Immediately rumors began to circulate that the police intended to destroy them.

That's what happens when authorities cover things up.

A court order protected the files’ integrity. In 1998, after 10 years of litigation to determine whether the government had the right to redact from the files the names of its agents and informants, the Puerto Rico Supreme Court determined that the files must be turned over to the citizens involved unedited and unredacted.

The information revealed in the carpetas showed how widespread, and intrusive, the spying had been on people considered a threat to the government solely on ideological grounds. 

(Chilling in light of today's world)

To many Puerto Ricans, these revelations came as a great surprise, though others, more suspicious of government, had long seen something like this coming. At any rate, on this island that had been invaded by US troops in 1898 and governed for half a century — until 1948, to be precise — by officials appointed personally by the president and the US Congress, the government’s deep political insecurity (read: raging paranoia) was fully revealed. Revealed, too, was the fear felt by much of the island’s population at being persecuted for their party or political affiliations.

Yeah, but "whatever." 

This dismissal of the pre$$ regarding the concern and people raising it says it all.

Puerto Rico’s history with such political persecution is long. In 1898, journalists disaffected with the new colonial regime were jailed for ideological reasons. In the ’20s, the FBI began systematic surveillance of men and women considered subversive and began training local intelligence officers in how to prepare lists of and files on independence sympathizers — who were universally and pejoratively called independentistas. 

I would think stuff like that would put us on the same side, but I'd be wrong. The pre$$ still acts as a handmaiden for power.

Official surveillance intensified with the growth of the Nationalist Party in the 1930s, since that group supported worker strikes, among other activities, against the US sugar corporations on the island. US-appointed governor, Blanton Winship, at the time was particularly harsh in his persecution of the independence movement. Under his administration, the island saw massacres and summary execution of dissidents — although no officer of the law was ever charged.

Look at that. Global business interests never like those kind of parties that are often mislabeled fascist. Corporate rule is the e$$ence of fa$ci$m, as the founder of it noted.

Yet the culmination came when J. Edgar Hoover, the now notorious head of the FBI, implemented his pet initiative, COINTELPRO, short for Counter Intelligence Program. FBI agents spied on thousands of people in the States and on the island, using any imaginable trick or wile to interrupt, undermine, and punish “subversive” activities, even legal ones. The gross contempt shown by Hoover and his agency for both federal and state laws and the Constitution itself — Hoover would, seemingly, break any law to achieve his objectives — left a decades-long trail of blood and violence.

I'm shocked to see that in my paper, although I suppose it is safe because Hoover is long dead and the butt of jokes now.

Of course, we have had much of that since and with the police treatment dominating the domestic front the last two years how far removed from the '60s are we? Is it not worse, and lest you forget, this government spied on antiwar people during the W. Bush reign.

But in Puerto Rico, this “police activism” was more intense than in most other jurisdictions, where the institutions of law and order were more responsive to public scrutiny. There was no public or private oversight in a colony where federal power was virtually unquestionable, and the result was several deadly incidents at the hands of authorities. The insular police knew they could count on the complicity and protection of the federal overseers and so acted with almost complete impunity.

They like to call it justifiable shooting.

Moreover, that atmosphere of lawlessness encouraged and protected far-right organizations, who murdered and intimidated so-called leftist students, militants, and activists. 

They wonder why they get that type of reaction, and they are the flip side to the controlled-opposition left. Either useful dupes or complicit in the game. 

A series of murders from that time are unsolved to this day: Santiago Mari-Pesquera (1976), Juan Rafael Caballero (1977), Carlos Muñiz-Varela (1979), and Ángel Rodríguez-Cristóbal (1979). Recently declassified documents point to the complicity of the FBI in some of these deaths, and despite the incriminatory evidence uncovered against it, the bureau has refused to help clear up the cases.

Maybe they will do a TV show about it.

It’s no coincidence that a significant revelation of the government’s criminal actions came at this moment of financial crisis on the island. It exposes a great deal about the island’s situation with respect to the center of power in Washington. In fact, the corruption of law enforcement from the beginning sees close parallels to a financial crisis due to a reliance on US aid programs and props (via tax subsidies and exemptions) to the island’s industry and business, leading to overspending (“Uncle Sam will bail us out”) and a refusal by federal authorities, when the economy tanked, to allow the island’s public corporations to reorganize under Chapter 9. The island has been and is besieged.

As to those files, we still do not know why, after all the publicity the case received, so many have gone unclaimed — although we might speculate that one of the reasons was simply fear, lingering fear. Certainly one task, an important one, remains: The identities of the individuals on the list must be verified, as it would come as no surprise that at least some of them were fictitious.

At any rate, these now dusty documents testify to the perversity that takes over when the inequities of a territory subordinated yet populated by people who hold US citizenship is combined with the impunity that protects state and federal authorities when they violate the law “to keep us safe.” When that happens, the idea of “equal protection under the law” shatters.


Did they get an apology or did he stiff 'em?