Profanity-Laced Texts Ensnare Puerto Rico Governor in Furor

(Bloomberg) -- A day after two former Puerto Rico government officials and four others were arrested as part of a federal corruption probe, Governor Ricardo Rossello was engulfed in a furor over the release of profanity-laced text messages in which he lashes out at his foes.

The messages between Rossello and his top aides, published by the Primera Hora newspaper, threaten to further tarnish a government that’s been battered by investigations and the collapse into a record-setting bankruptcy two years ago that’s left it fighting with investors over its cash.

In one exchange, Rossello refers to the former speaker of the New York City Council, Melissa Mark-Viverito, a political ally of San Juan mayor Carmen Yulín Cruz, a chief Rossello rival, as a “whore.” In another, the governor wrote “Dear Oversight Board – Go F--- yourself,” referring to the federal panel he has clashed with over the broad financial power it wields over the U.S. territory.

At a press conference Thursday evening, Rossello said he will resist calls for his resignation in the wake of the indictments, saying he was "ashamed" and "outraged" by the alleged misconduct. He also apologized for his texts.

"Women are legitimately offended and there must be many apologies," he said.

His comments came after Jenniffer González, Puerto Rico’s non-voting representative in the U.S. Congress and a member of Rossello’s pro-statehood party, wrote on Twitter that “the sexist expressions in the governor’s group chat are offensive and unacceptable.” U.S. Representative Raul Grijalva, who chairs the House committee that oversees the island, called for Rossello to resign after the indictments, before the latest texts were released.

The scandals are dealing a fresh hit to Rossello’s administration as he fights with the federal financial oversight board over his budget and President Donald Trump’s administration over the release of aid to rebuild from Hurricane Maria. Puerto Rico is in the midst of negotiations with owners of about $18 billion of the central government’s debt, the last major chunk that it is seeking to have reduced in bankruptcy.

The release of the texts comes a day after the U.S. Justice Department announced the indictments of Rossello’s former education secretary and health insurance administration director over government contract awards.

Those charges cast a pall over Puerto Rico’s effort to get more federal funding from Washington. While a House subcommittee on Thursday advanced a bill that would extend an additional $12 billion of Medicaid funding for Puerto Rico -- one of the territory’s key requests -- Representative Greg Walden, a Republican, said the measure may not make it through Congress unless greater oversight is imposed on the island.

“Given the news yesterday out of Puerto Rico, we will also need additional program integrity measures in place before we advance this bill out of full committee,” Walden said during the hearing.

Last month, Rossello’s Treasury Secretary, Raul Maldonado, was fired after disclosing alleged crimes in his own department during a radio interview, including influence peddling, issuance of fake licenses, destruction of documents and accessing privileged taxpayer records. Maldonado’s son, Raul Maldonado Nieves, later called the governor “corrupt,” claiming Rossello ordered the auditing firm BDO to change a report on Hurricane Maria aid that would have shown mismanagement in a relief effort involving his wife, Beatriz Rossello. The governor has strongly denied the allegations.

“You wonder what controls are in place,” said Dennis Derby, who helps manage $39 billion of municipal debt, including about $2 million of Puerto Rico’s sales-tax-backed bonds, as senior analyst and portfolio manager at Wells Fargo Asset Management. “Right now, it appears there were a number of conflicts of interest and that doesn’t necessarily bode well for investor confidence.”

For some, the drumbeat of crisis brought to mind the tenure of Rossello’s father, Pedro Rossello, who served as governor from 1993 until 2001 and was also beset by a series of scandals and arrests.

“Since the 1990s, with the government of Rossello’s father until today, this issue has been escalating,” said Pablo S. Torres Casillas, a Puerto Rican historian and university professor. “The government, as an administration, is in a position of greater political weakness.”

To contact the reporters on this story: Michael Deibert in San Juan at mdeibert@bloomberg.net;Michelle Kaske in New York at mkaske@bloomberg.net

To contact the editors responsible for this story: Matthew Bristow at mbristow5@bloomberg.net, ;Elizabeth Campbell at ecampbell14@bloomberg.net, William Selway, Michael B. Marois

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