Puerto Rico’s federal supervisors are preparing to scrutinize the U.S. territory’s bankruptcy advisers, reflecting broader concerns about potential overcharging and conflicts of interest in public contracting, WSJ Pro Bankruptcy reported. The federal board overseeing Puerto Rico’s finances is considering making new disclosure requests to the law firms and financial experts hired to navigate the largest-ever U.S. municipal debt restructuring. U.S. and local lawmakers have criticized the amounts being spent on attorneys and bankers, including the oversight board’s own advisers, at a time when pensioners and creditors are facing cuts. Its initiative is aimed at uncovering any undisclosed side deals or subcontracts and whether any third parties act as pay-to-play gatekeepers for public contracts. Read more.
In related news, U.S. House of Representatives Natural Resources Committee Chairman Rob Bishop (R) said on Friday that he supports the government of Puerto Rico’s efforts to introduce bipartisan legislation in Congress to grant full statehood to the U.S. commonwealth territory, Reuters reported. “I am supportive of statehood. I think it is a solution that is long overdue,” Bishop, a Republican from Utah, said during a visit to the island that was broadcast over the internet. Puerto Rico is still in the throes of recovering from September’s devastating spate of hurricanes that killed dozens and completely knocked out power, deepening the economic woes for the island’s 3.4 million U.S. citizens. Many of them have decamped for the mainland United States in search of jobs and social services. Bishop’s committee has overseen the process, well before the hurricanes, of addressing Puerto Rico’s financial insolvency. It declared the largest municipal bankruptcy in U.S. history one year ago when it said that it could not service its $120 billion in debt and pension obligations. Committee aides gave no firm timetable for holding a hearing on Puerto Rico statehood much less advancing statehood legislation. Read more.
