Board sues Puerto Rico governor amid economic crisis
Jul 3, 2019
A federal control board overseeing Puerto Rico's finances has sued the U.S. territory's governor, saying he refuses to submit required documents and has approved tens of millions of dollars in unbudgeted spending amid a 13-year recession
SAN JUAN, Puerto Rico — A federal control board overseeing Puerto Rico's finances sued the U.S. territory's governor Wednesday, saying he refuses to submit required documents and has approved tens of millions of dollars in unbudgeted spending amid a 13-year recession.
The board also accused Gov. Ricardo Rosselló of signing nearly two dozen joint resolutions to appropriate funds for expenditures not approved by board-certified budgets.
"Puerto Rico cannot fall back into an era of uncontrolled spending," board chairman Richard Carrión said. "This led us into bankruptcy and resulted in pain and suffering on our island."
The suit says this "is not the first instance of the governor misinterpreting the scope of his authority" after Congress created the board. Rosselló has long maintained that the board's powers do not supersede his.
A spokeswoman for Rosselló referred questions to Christian Sobrino, the governor's representative on the board. Sobrino said in a statement that officials are evaluating the lawsuit and that Rosselló's administration has always sought to maintain fiscal responsibility.
The board also is asking a federal court to bar the local government from enforcing a law that Rosselló approved last month eliminating the obligation of Puerto Rico's 78 municipalities to pay the central government for hundreds of millions of dollars in pension costs related to their own retirees. Board members said this would undermine the central government's ability to pay public pensions if it is in fiscal distress.
The lawsuit also was filed against Puerto Rico's Fiscal Agency and Financial Advisory Authority. It says that body and Rosselló are repeatedly failing to comply with a U.S. law passed in 2016 to address the island's financial and economic crisis.
The lawsuit comes as the governor and the board clash over austerity measures in this year's fiscal budget as Puerto Rico continues to restructure a portion of its more than $70 billion public debt load.
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