Puerto Rico Lawmakers Set to Tangle Over Governor’s Successor
Puerto Rico Lawmakers Set to Tangle Over Ricardo Rossello’s Successor
(Bloomberg) -- Outgoing Puerto Rico Governor Ricardo Rossello said he is nominating as his successor Pedro Pierluisi, the commonwealth’s former representative in the U.S. Congress, although it’s unclear whether the island’s legislature will approve the appointment.
Rossello, who is to step down Friday after a scandal and massive street protests, made the announcement with a morning Twitter post and called for a special legislative session to begin Thursday. The bankrupt U.S. commonwealth’s House of Representatives is set to hold a vote at 1 p.m. Friday regarding the appointment of a secretary of state -- next in the line of succession -- according to a notice of the session.
In Pierluisi’s first public statement since Rossello’s announcement, he said he has “listened to the people’s messages, their demands and their concerns. And in this new challenge in my life, I will only answer to the people.”
Rossello said he would be a fit successor to guide the commonwealth through a grinding debt restructuring and the recovery from Hurricane Maria, which devastated the island two years ago.
“I have pondered multiple options for this position and the enormous responsibility that it entails,” Rossello said in an emailed statement Wednesday. “This historic moment requires a person capable of restoring relations with all sectors, locally and nationally.”
Rossello has been pressured to act before he steps down and name a candidate to the vacancy who can win approval of both protesters and the island’s congress. The appointment of a secretary of state in Puerto Rico requires confirmation by a majority of members in both the Senate and House, according to William Vazquez-Irizarry, a law professor at the University of Puerto Rico. Local lawmaker Jose “Quiquito” Melendez said Tuesday that he’s not certain whether Pierluisi’s nomination will pass the House.
In a statement on Facebook Wednesday morning, Senate President Thomas Rivera Schatz noted -- factually -- that Rossello can make appointments until he leaves office at 5 p.m. Friday. He didn’t say anything about whether the governor’s choice would be approved in the chamber he leads.
“There is no problem without a solution, and in Puerto Rico, we must focus on solutions,” said Rivera Schatz , who like Rossello is a member of the dominant New Progressive Party.
Senate confirmation may be difficult because many believe that Rivera Schatz wants the governorship himself. Senator Eduardo Bhatia tweeted Wednesday morning that Rivera Schatz’s tactic “of taking the country hostage is very dangerous.”
The island is facing an unprecedented succession impasse since Rossello announced July 24 that he would step down. His decision followed demonstrations that started after the disclosure of leaked chats in which Rossello and aides mocked rivals and ordinary Puerto Ricans. There is no secretary of state since Luis Rivera Marin left due to his involvement in the chats. After that, the governorship would fall to Justice Secretary Wanda Vazquez, who has said she doesn’t want the job.
Federal Board
Carlos “Johnny” Mendez, president of the Puerto Rican House and a member of the ruling party, said in a radio interview Wednesday that he prefers Rivera Schatz over Pierluisi, the governor’s nominee, “at this time.” He also said Pierluisi didn’t have the votes for approval, according to the interview on WKAQ 580.
“There are situations that have to do with the fiscal oversight board,” he said. “In an informal survey that was done, he presents problems right now.”
Pierluisi, 60, is a private-practice lawyer with San Juan-based O’Neill & Borges LLC, which represents the island’s federal oversight board in Puerto Rico’s bankruptcy. The firm’s website said he was on a leave of absence as of Tuesday. The firm has billed the federal board at least $4,900 for time that Pierluisi has spent on its cases, according to court documents.
From 2009 to 2017, Pierluisi was Puerto Rico’s non-voting member of the U.S. House, known as resident commissioner, and prior to that, he was justice secretary under Governor Pedro Rossello, the current governor’s father. He’s a member of the ruling New Progressive Party and in the U.S. House caucused with Democrats. Pierluisi lost to the younger Rossello in the 2016 gubernatorial primary.
As resident commissioner, he was one of the main proponents for the approval of the Puerto Rico Oversight, Management, and Economic Stability Act of 2016, which gave Puerto Rico a path to bankruptcy court but also -- controversially -- installed a federal oversight board that has spurred complaints about vestigial colonialism.
The leadership void threatens to delay Puerto Rico’s negotiations to restructure billions of dollars of debt and secure federal aid as the commonwealth recovers from Hurricane Maria. U.S. lawmakers allocated about $42.5 billion in disaster aid, but Puerto Rico has received only about $13.6 billion, according to the federal government.
Prices on most Puerto Rico general-obligation bonds have increased during the island’s political turmoil amid market speculation that the federal oversight board may gain more power. General-obligation bonds with an 8% coupon and maturing in 2035 traded Tuesday at an average price of 54.9 cents on the dollar, up from about 52 cents at the start of July, according to data compiled by Bloomberg.
Puerto Rico’s business community wants the situation settled as soon as possible, said Jose Ledesma-Fuentes, president and board chairman of Puerto Rico’s Chamber of Commerce. Departments and agencies for economic development, housing and education need continuity, he said.
“For the benefit of the economy, we really need to know who’s going to be leading the transition efforts after he leaves,” he said. “We’re growing very frustrated with this delay.”
--With assistance from Michael Deibert, Amanda Albright and Ezra Fieser.
To contact the reporters on this story: Michelle Kaske in New York at mkaske@bloomberg.net;Jonathan Levin in Miami at jlevin20@bloomberg.net
To contact the editors responsible for this story: Elizabeth Campbell at ecampbell14@bloomberg.net, Stephen Merelman
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