The Fix Was In: Puerto Rico Re-Colonized by Senate Trying to Get Out of Town

Senate Vote
Senate Votes to End Debate on HR 5278

The imposition of the Fiscal Oversight Board on Puerto Rico constitutes a wholly undemocratic re-colonization of what was once known as the Commonwealth, one that should immediately compel all Americans to take to the street to denounce this hideous betrayal of their country’s imagined role as the leader of the free world. But the most disappointing moment of yesterday’s travesty in a sense wasn’t the dispatching of this onerous legislation to the waiting signing pen of the first African-American president of the U.S., it was the brazenly indifferent vote by the Senators to shut down debate on the bill, which forced the final vote as they lingered in the chambers, talking shop and perhaps planning their Fourth of July getaways.

It’s hard not to conclude that the timing of the passage of this bill was a set-up, one that was no doubt conceived of long ago by whoever in the executive branch was assigned the lowly task of devising a future for the Irresponsible Island, yep that Big Pharma/Microsoft/Walmart tax shelter, the one with the $72 billion (plus unfunded pension funds) debt. The timetable began last summer when Governor Alejandro García Padilla announced that the debt was unplayable, perhaps a year or two late, and found its logical end with the looming $2 billion debt service payment that would be defaulted on July 1st. Over this year-long stretch, calls for extension of bankruptcy laws to Puerto Rico, which would have given it a chance to set its own parameters for how much could be paid back, morphed into an arch-Republican clinical re-structuring a la Milton Friedman’s Chile plan, something not far off from the fondest wishes of Presidential campaign bankrollers extraordinaire, Wall Street & Co.

The extreme measures this legislation takes have been well-documented, and there was some buzz in the last couple of weeks reacting to the House passage that said something like, “the Senate just doesn’t have the votes to pass,” or “there will be amendments.” Reassuring kind of stuff about the balancing powers of democracy–extreme measures will always be softened by the gentleman-and gentlewomanly grace of Capitol Hill’s intrinsic fairness. But what you saw in the Senate chambers yesterday was a stark silencing of anything that could resemble a voice that spoke for Puerto Rico. It was a reminder of what occurred a couple of weeks earlier, when House Democrats staged a sit in protesting the lack of action on gun control legislation (which we still don’t have by the way), and the Republicans in charge pulled the plug on C-SPAN.

The reason for the rush-passage, from a Congress that everyone knows does practically nothing for a living? Well, the bill had to be passed–now! No delay permitted! There are, after all, only a few days left where a Senator can take the family to New York and catch Lin Manuel Miranda in Hamilton–he’s scheduled to leave the production on July 9! It’s only fair to assume this because there were no coherent reasons put forth yesterday, or in the entire House process, or by the comments by Treasury Department guys Jacob Lew and Antonio Weiss, that this bill, as it is written, needed to be passed…yesterday.

Let’s go to the Congressional Record, which reads like theater sometimes. This is what Senator Maria Cantwell said:

CANTWELL:…There is so much discussion that somehow July 1 is a magic date. Well, actually, July 11 is the next scheduled legal hearing on this, and that is plenty of time for the Senate to weigh in on a few ways to improve this legislation and to make sure we are not suspending the constitution of Puerto Rico in the process…Why is this important? Because there are hedge funds out there that took Argentina’s debt and it took almost a decade to get a resolution because they could win in court…Also, there are questions about this board and who they are? Besides the fact that they are likely to be challenged in court as unconstitutional, I brought up the point last night that they can actually receive gifts. Gifts from whom? What gifts? What can the board receive? Is it cars? Is it equipment? Is it airplanes? What is it they can receive?…I urge my colleagues to vote ’No’ on this legislation. Give the Senate a chance to work its will and make sure we are protecting the U.S. taxpayers on the amount of debt we will be seeing with this legislation if we don’t move forward in an orderly fashion.

PRESIDING OFFICER (SENATOR DAN SULLIVAN): The Senator’s time has expired.

[Yep, that’s right, time’s up Senator Cantwell. Let’s hear from your fellow Senators, now There was some Democratic pushback by Dick Durbin and Harry Reid. Durbin said that if the Senate didn’t act now, all the power would go to the hedge/vulture funds. After all, he said, the board is not a colonial imposition. He thinks the U.S. and Puerto Rico have been in “partnership” all along. Something to the effect that we’re las dos alas de un pájaro.]

July 4th weekend, in the Senate’s collective sideview mirror, appeared larger than it really was. Yet there was still a bit of sanity remaining. In a last ditch effort to spur debate on PROMESA, this is what Senator Robert Menéndez said:

MENENDEZ: I came to this Chamber in September and December of last year to raise the alarm bells about what was happening in Puerto Rico. The majority held the ball and ran out the shot clock, attempting to silence the voice of 3.5 million U.S. citizens living in Puerto Rico in this debate.

So let’s be clear about what this vote to end debate means. Despite what the proponents of the bill will argue, opposing this cloture vote is not a vote to allow Puerto Rico to default. Any legislation we pass includes a retroactive stay on litigation, meaning that any lawsuit filed after July 1 will be halted and any judgment unenforceable. As the bill states, the stay bars ‘‘the commencement or continuation’’ of suits to recover claims against Puerto Rico. It also bars ‘‘enforcement . . . of a judgment obtained before the enactment’’ of the bill. In addition, section 362 of the Bankruptcy Code, which is incorporated by reference into the bill, bars the ‘‘enforcement . . . of a judgment obtained before’’ filing for bankruptcy, once the board files a bank ruptcy petition on Puerto Rico’s behalf. So even if the hedge funds win a judgment before the stay is enacted, that judgment cannot be enforced, and once the debt adjustment plan is confirmed, the judgment can be discharged.

As the Third Circuit Court of Appeals held in 2012—the circuit that has juris- diction over Puerto Rico—‘‘Even if [an] injunction is not a claim [for the purpose of the bar against ‘‘commencement or continuation’’ of ‘‘claims’’], any action to enforce [an injunction] is subject to the stay and cannot proceed without relief from the stay.’’

I repeat, ‘‘Any action to enforce [an injunction] is subject to the stay and cannot proceed without relief from the stay.’’

[Yet essentially the Senate process goes on to say, Nice speech, Bob. I’m not sure what you mean with these technical legal points, but Puerto Rico needs to be saved, pronto. We’re going to vote to end the debate now if you’ll just have a seat over there.]

So, here’s Menéndez, essentially not objecting in principal to the board (which most Puerto Ricans do), attempting to “compromise,” by wanting to open debate on the lack of Puerto Rican representation on the board, the taking away of practically all legislative powers from Puerto Rican elected officials, the estimated $380 million cost to Puerto Ricans for the maintenance of this board, the sweeping powers the board would have over privatizing public lands, the return of Puerto Rico to pseudo-dictatorial status unheard of since the 1930s, etc, etc. Puerto Rico will not collapse on July 1st. That’s why the governor is refusing to pay, so that money needed for essential operations will not go to hedge and vulture funds. Because the hedge and vulture funds want to collect the full value of the bonds when they only paid 30 cents on the dollar.


[Intermission: An excerpt from David Deyen’s June 24th piece in the Fiscal Times:

Interestingly, this question of how to treat speculative creditors dates all the way back to the American Revolution. Alexander Hamilton and James Madison squabbled over this, in the context of paying off bonds used to finance the war effort. Hamilton wanted to pay off the creditors at face value; Madison wanted to pay them at only the rate the creditors paid, so as not to reward speculators. Hamilton eventually won out.

Lin-Manuel Miranda of Hamilton fame, who has Puerto Rican parents, has pleaded with Congress for relief for the island. He has called PROMESA “the only option that Congress is currently willing to pass,” and supported it as the least-worst solution. Hamilton would be proud of his protégé’s support for rewarding financiers for taking advantage of a government in trouble. But if Miranda looked closer at what this bill would mean for friends and family suffering on the island, maybe he wouldn’t endorse something so, well, Hamiltonian.]

Eh. Enough’s enough. No reason to debate the details behind the accumulation of the debt. Let’s go to the vote. Curtain, please.

PRESIDING OFFICER: The question is, Is it the sense of the Senate that debate on the motion to concur in the House amendment to S. 2328 shall be brought to a close?

The yeas and nays are mandatory under the rule.

The clerk will call the roll.

The senior assistant legislative clerk called the roll.

The yeas and nays resulted as follows:



PRESIDING OFFICER: Three-fifths of the Senators duly chosen and sworn having voted in the affirmative, the motion is agreed to. Cloture having been invoked, the motion to refer falls as it is inconsistent with cloture.

And that, my friends, was that. Como dicen en Hollywood, eso fue todo lo que ella escribió. Colonial Democracy in action.

A word of warning: Don’t get too excited, either about showing your objection to this in November’s elections. The most disappointing thing about scanning the list of the yeas is the number of Democrats on that list. (Durbin, Franken, Reid, Feinstein, Gillebrand, to name a few.) Are we to believe that, even if Hillary Clinton becomes President, and both houses become majority Democrat–a major stretch–they will go back to this legislation and change it?

Seems unlikely. Change is gonna have to come from somewhere else.







2 thoughts on “The Fix Was In: Puerto Rico Re-Colonized by Senate Trying to Get Out of Town

  1. They are rushing to pass “Promesa”,
    Because they say to save Puerto Rico.
    They are not saving Puerto Rico, they are imposing a dictatorship. Imposing a minimum wage $4.25, that is not saving a people. That it’s not nurturing the youth, that will be the future of Puerto Rico. These are all calculated steps, for a hidden agenda. The obvious one are the gifts!!! Could be cars, real estate, who knows!!! Why do they need gifts? , The Finacial Control Board is going to cost Puerto Rico enough, so why do they need to get gifts?!
    What Financial Control Board is going to Cost can be used to paid the debt!! How do we know these Politicians from Washington,DC are going to do an honest job!! The US government and Congress is also corrupt, and receives gifts from the Hedge Funds, for their campaigns.
    And to name this bill “PROMESA” IS THE ULTIMATE INSULT. There is so much Hidden Colonialism in that title word, but also so much PREJUDICE!!!

  2. Mr. Ed Morales,

    My mother is from Fajardo and my father from Manati. I was born in Puerto Rico, also. Feel my beautiful island is being destroyed, a way of life is being destroyed. My father’s town of Manati is a ghost town. This Finacial Control Board is coming to collect the money for the Hedge Funds. It’s approach and methods will not heal Puerto Rico, but rather bring it to its edge. It would not bring back, the vibrate life of the local stores of Manati. The US solutions to sell lands in Vieques is devistating, thank God it was fought! But it tells you how little the US understands our people and our history. And even worst that the first Black President, should be the one to sign it!
    Our land, (because it is our land), with deep green mountains and coral beaches; that earth whose soil and history runs through my blood, will become again the ground where confrontation between 2 worlds will meet. One powerful the other trapped within, will head on, to soak soil with blood.

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