Puerto Rico Erupts at Governor, but Power Resides Far Away
Yahoo News: Infuriated by years of recession, corruption and living under a bankrupt government, thousands of Puerto Ricans protested in Old San Juan, demanding the ouster of Governor Ricardo Rossello after leaked text messages showed him and his aides to be vindictive, sexist and profane.
Whether he stays or goes may matter little to the forces that will help determine the island’s economic fate.
After all, power over the U.S. territory isn’t wielded in the governor’s Fortaleza mansion alone. A significant portion resides five miles (8 kilometers) away in the offices of a Congress-created financial oversight board handed sweeping authority — and with a bankruptcy judge. The turmoil in the streets may only prolong the two-year legal case that has left residents feeling powerless and that has stoked simmering resentment about quasi-colonial rule.
“Principally, we are here to protest Ricky,” said 21-year-old Carlos Crespo from the suburb of Bayamon, who turned out with thousands of others Wednesday night to demand change. “He doesn’t respect women, he made jokes about the people who died in Hurricane Maria. But we have been suffering for a long time.”
Since Sunday, protesters have raged against a government where power traditionally has been wielded by small, well-connected factions. Many younger demonstrators have said they are fed up with the island’s two main political parties, which are split on the question of statehood but united in failure to improve a hurricane-ravaged commonwealth with a 45% poverty rate.
Tens of thousands took to the streets Wednesday night. The protests, largely peaceful at the outset, degenerated into a tear gas-suffused melee, with small bands of masked protesters and police playing a game of cat-and-mouse through the narrow streets of Old San Juan.
“The chats were the last straw,” said Josarie Molina, 48, as she watched some protesters dance to traditional bomba music. “We are tired of struggling with every single thing, our cuts in services, education being cut, our taxes being raised. We think he’s a puppet.”
Police said at least five people were arrested during the protests, the latter part of which saw demonstrators setting fires and police firing tear gas that wafted into many homes.
However, the decisions most central to the commonwealth’s future are being made in law offices, decorous courtrooms and in Washington as creditors tangle with the oversight board over the massive public debt.
Congress created the board — known in Spanish as the Junta Fiscal — to supervise Puerto Rico’s budgets, multiyear fiscal plans and address its debt crisis. It manages the commonwealth’s bankruptcy process and negotiates with bond holders.
Puerto Rico is seeking to restructure about $27 billion of obligations tied to the central government and its main utility, the Electric Power Authority, which was ravaged by Hurricane Maria in 2017. The board is now negotiating with owners of some $18 billion of central government-backed debt, the last major piece that needs to be dealt with in the bankruptcy. In addition, the government owes $50 billion to current and future retirees.
Rossello has fought with the board. The agency prevailed in court against the governor in a clash over how much the government could spend. The control board has proposed cuts to retirement benefits, while Rossello adamantly refuses to reduce them.
Investors accustomed to Puerto Rico’s troubles have kept prices on the debt steady amid the recent upheaval. Commonwealth general-obligation bonds that mature in 2035, one of the government’s most active securities, traded Wednesday at an average 52.9 cents on the dollar, little changed from where they were before the release of the chats.
This week’s protests will likely do little to alter financial facts.
“The turmoil may cause some delay, but the oversight board is still going to restore fiscal responsibility, market access and restructure the debt,” said Martin Bienenstock, a lawyer who represents the agency in bankruptcy court.