U.S. Sen. Marco Rubio, R-Fla., wants to change the disclosure process as Puerto Rico tries to bounce back from major fiscal problems.
This week, Rubio paired up with U.S. Sen. Richard Blumenthal, D-Ct., U.S. Sen. John Kennedy, R-La., and U.S. Sen. Bob Menendez, D-NJ, to bring out the “Puerto Rico Recovery Accuracy in Disclosures Act” (PRRADA) which “would provide robust disclosure requirements to all of the Puerto Rico Financial Oversight and Management Board’s advisers and consultants, closing a loophole in the existing law” and “would require vendors to disclose their relationships, guaranteeing to the people of Puerto Rico the same transparency and disclosure practices required by law in U.S. mainland bankruptcies.”
Rubio noted that Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) in 2016 “to set up an orderly bankruptcy process to restructure the island’s debts, pay off creditors, approve infrastructure projects, and stimulate economic development” but there was a major problem in the law.
“The law failed to add a requirement for advisers and consultants to disclose their own conflicts of interests with the variety of creditors to whom Puerto Rico owes $123 billion,” Rubio’s office insisted. The current proposal would close that loophole.
“Transparency and accountability are critical to ensure Puerto Rico’s restructuring process is successful,” Rubio said on Thursday. “I’m proud to have worked with Senator Menendez to introduce this important bill to extend the disclosure requirements that apply on the mainland to professionals seeking compensation under title III of PROMESA.”
“Although I opposed PROMESA vehemently, I still believe that the cadre of advisors and consultants created as a result of that law must be held accountable to the same transparency standards required by law in the mainland,” Menendez said. “Our legislation will close the current loophole, establishing robust disclosure requirements for bankruptcy advisors, and allowing the courts to deny payment to any bad actors with conflicts therefore making it more transparent for Puerto Ricans.”
“Our bill will give the people of Puerto Rico the same transparency and accountability that corporate shareholders already enjoy to ensure that the people and companies making decisions for them are free of conflicts of interest,” Blumenthal said. “It is a crucial, common sense step to protect the more than 3 million American citizens on Puerto Rico from corrupt and conflicted practices.”
Over in the U.S. House, U.S. Rep. Nydia Velazquez, D-NY, is championing the companion bill.
Kevin Derby can be reached at Kevin.Derby@floridadaily.com.