- - Thursday, January 25, 2018


Even before being wrecked by hurricane damage, Puerto Rico was a mess. Things were so out of control Congress and President Barack Obama took the extraordinary step of appointing an oversight board to take charge, hoping it would act decisively and prevent the Puerto Rican government from going broke.

They’ve failed. What else is one to conclude now that a secret stash of money totaling almost $7 billion has been found, hidden away in private bank accounts by various public agencies — and just a week after Republican Gov. Ricardo Rossello asked American taxpayers to pay for the estimated $94 billion it will take to set things in the commonwealth back to normal?

The problem is not so much a lack of money as it is a lack of leadership. Mr. Rossello may be trying his best but, with so much power vested in the Oversight Board established by the Puerto Rico Oversight, Management, and Economic Stability Act, the whole island has been rendered dysfunctional. The governor is at odds with the board, the board is at odds with the governor, and everyone is hoping the politicians in Washington are going to write a big check to cover the costs.

Continued delay is not an option. The people who live in Puerto Rico have suffered long enough. They shouldn’t have to wait while political footballs get tossed around. They deserve action now, starting with the Oversight Board — though not as it is currently constituted.

The Obama-appointed board has been, if not exactly complicit in the continuing corruption, too unwilling or too weak to confront it head-on. There have been objections to the board’s composition ever since its members were appointed without the approval of the U.S. Senate, as PROMESA required, and without considering the input of congressional leaders.

Congress wanted the board to take the tough, necessary measures needed to put Puerto Rico on a path toward economic growth and debt restructuring. House Speaker Paul Ryan even put his personal prestige on the line to get the legislation through. What he got for his trouble has been an entity that has been slow, sloppy and inefficient.

Changes must be made, on the board as well as at the staff level. Unfortunately, the board’s current executive director, Natalie Jaresko who, from 2014 to 2016 was the Ukrainian Minister of Finance, doesn’t fit the bill.

Ms. Jaresko, who was appointed by President Trump, is little better than her Obama-appointed predecessors. She continually looks to benefit herself financially ahead of the people she has been tasked with helping. Before becoming minister of finance, Ms. Jaresko, who was born in Chicago, ran a $150 million regional fund called Western NIS Enterprise Fund, a U.S. government-funded investment fund run through the U.S. Agency for International Development.

During her tenure she collected $1.77 million in bonuses in 2013 despite being limited to a compensation of $150,000. She and her colleagues claimed these bonuses through a loophole allowing them to pull money from the fund’s profits, enriching themselves by claiming money generated from U.S. taxpayers’ dollars while avoiding any personal financial risks.

She’s certainly not leading by example. In 2016, the median household income for Puerto Rico was $20,078, so Ms. Jaresko’s salary of $625,000 means she makes just over 31 times more than the average person she is charged with helping.

Hopefully, changes in personnel are all that is needed. If not, if a structural change in the composition and authority of the board would be required, then Congress needs to act quickly. Mr. Ryan all but took complete ownership of the issue even before the hurricanes hit the Caribbean, so it’s fair to look to him for leadership on the need for additional reform. The Ryan-backed PROMESA was created to provide a path forward for debt restructuring with the agreement of creditors and the government.

But, rather than shed light on the situation, the Oversight Board continues to obfuscate, making matters worse and letting corruption flourish. For example, the Oversight Board and the government of the commonwealth refuse to disclose basic economic statements and indicators with creditors and won’t announce their future fiscal plans.

There is a lot to be done, and now is the time for change. Natalie Jaresko must step aside or be removed from a position into which she should never have been put, so that someone with the proper expertise and management skills can take over. The American people, especially those who live on Puerto Rico, deserve better than this. If Congress or the president does not act fast, taxpayers will be on the hook for the island’s fiscal disaster for years to come, long after the damage from the hurricanes has been repaired.

Peter Roff is a senior fellow at Frontiers of Freedom and a former senior political writer for United Press International.

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