A combative year for transparency

The fight for access to information in Puerto Rico says farewell to 2018 with important court victories, but we welcome 2019 with a red flag about how the execution of public affairs that affect us today, and will affect us for decades to come, is taking place under a shroud of darkness worse than the one we had before Hurricane María struck. The intention of being transparent about public affairs was one of the things that the hurricane blew away and which has not been recovered. That said, we anticipate the need — as it happened in 2018 — for more individuals and organizations to turn to the courts to exercise their constitutional right to access to information. One example that the government is counting on secrecy on public affairs now that decisions are being made regarding the hundreds of millions of dollars in recovery funds, the debt adjustment plans and the privatization of assets such as the power system, is contained in two legislative bills moving forward on the issue of transparency: Senate Bill 236 (about open data) and House Bill 1095 (about transparency.)

In both cases, the Transparency Network, a work group that comprises, among others, the Center for Investigative Journalism (CPI, by its initials in Spanish,) Open Spaces, Sin Comillas and GFR Media, presented amendments so the measures would not represent a step back or even a violation of current constitutional rights to access. However, after the suggestions were accepted and presented by House Speaker Carlos “Johnny” Méndez, all it took was one call from La Fortaleza to tear the amendments apart and return the bill to its dangerous original state.

McKinsey: Puerto Rico Bondholder and Fiscal Board’s Lead Adviser

The world’s largest financial consulting firm leads the operations of Puerto Rico’s federally appointed Fiscal Control Board, as evidenced by emails obtained by the Center for Investigative Journalism. McKinsey also owns Puerto Rico bonds and is subject of various investigations, including one commissioned by the entity imposed by the federal PROMESA law.

Republican Senators Quietly Pushed Privatization of Puerto Rico’s Power Utility

Republican Senators Jeff Flake of Arizona and Mike Lee of Utah sought to keep secret their interest in the privatization of the Puerto Rico Electric Power Authority (PREPA), a government-owned corporation. Almost a month after Hurricane María destroyed the island’s energy grid, a representative of Sen. Flake began to send emails to Andrew Biggs, a conservative, pension expert who sits at Puerto Rico’s Fiscal Control Board (FCB), the federally appointed entity tasked with the island’s debt restructuring. “The Flake and Lee offices have quietly been kicking around the idea of legislation to implement the PREPA privatization that members of the [FCB] have advocated,” wrote Chuck Podolak, a former adviser to Sen. Flake, in an email sent to Biggs. “We’re pretty new to the PREPA game and were wondering if we could grab a few minutes for a phone call with you to get some background on what thinking has been done on how to do this [the privatization],” he continued. These communications with FCB members not only reveal the intention of both senators to secretly pull the strings of privatization from the federal sphere, but they also demonstrate the depth of the political subordination of the Puerto Rican territory before the U.S. They further show a lack of independence from the FCB, which is called to act by its own criteria.

Puerto Rico Fiscal Board Fights For Secrecy

Puerto Rico’s federally appointed Fiscal Board refused to deliver an unspecified number of communications between the entity and officials of Congress, the White House, Treasury and other federal agencies. As part of an access to information lawsuit brought by the Center of Investigative Journalism (CPI) a year and a half ago, the Board alleges that they are privileged documents and must remain confidential. In a two-page letter dated Nov. 21 and addressed to the CPI’s legal representation, Board lawyers, Proskauer Rose, argue that the disclosure of certain emails and related attachments would affect the island’s economy, capital markets, pending law enforcement investigations and “the ability to perform [the Board’s] statutory duties.”

The entity imposed by the U.S. government through a federal law known as PROMESA only mentions broad justifications and descriptions for the withheld documents, the amount of which remains unknown, as are the names of those who are part of the communications that remain outside the public domain. The CPI lawsuit against the entity aims to obtain access to communications between the seven-member fiscal panel and both federal and local government.

Emails Expose Federal Gov’t Influence Over Puerto Rico’s Fiscal Board

“Started engaging with the creditors yet?,” asked Ted McCann, then adviser to House Speaker Paul Ryan (R-Wisconsin), in a March 21, 2017, email sent to Carlos García, a member of Puerto Rico’s federally appointed Fiscal Control Board. Shortly after, García, a former president of the commonwealth’s Government Development Bank (GDB) and whose appointment to the board was pushed through Ryan’s office, replied:

“Yes, a lot of focus on GO/Cofina controversy. Each group stepping up their rhetoric. Board pressing on for meaningful progress. Challenge is the limited projected Primary surplus available in the first 10 years for debt service.