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Massive and at times violent protests in Puerto Rico showed no sign of stopping as labor unions yesterday organized a march today to keep up pressure on the governor to resign, while dozens of guns were stolen in a raid on a police firearms center, Reuters reported. Thousands of protesters have jammed streets in San Juan since Saturday, calling on Governor Ricardo Rossello to step down after the leak of a raft of controversial and vulgar text messages between him and his closest allies. The scandal comes on the heels of a federal probe into government corruption on the bankrupt island. The political turmoil comes at a critical stage in the U.S. territory’s bankruptcy. It has also raised concerns with U.S. lawmakers who are weighing the island’s requests for billions of federal dollars for health care and for recovery efforts following devastating hurricanes in 2017.

U.S. lawmakers yesterday called for heightened scrutiny of Puerto Rico’s Medicaid program as the bankrupt territory seeks increased federal health care funding while it deals with repercussions from a government corruption scandal, Reuters reported. The House Committee on Energy and Commerce agreed to several accountability measures linked to a $12 billion funding boost over four years for the low-income health care program in Puerto Rico. A group of Republican U.S. senators, meanwhile, sought information on whether any safeguards are in place to deter misuse of the island’s federal Medicaid dollars. Last week, Angela Avila-Marrero, former executive director of Puerto Rico’s Health Insurance Administration, pleaded not guilty to conspiracy and other charges related to her role in an alleged scheme to steal federal Medicaid dollars through a corrupt bidding process with private contractors. The charges were part of a 32-count indictment brought by U.S. law enforcement officials against six people in a government corruption probe. The House committee adopted an amendment proposed by U.S. Representative Greg Walden (R-Ore.) that added provisions for federal audits and probes of contracts related to Puerto Rico’s Medicaid program, as well as a quarterly reporting requirement on how much of the money was spent.

Puerto Rico Governor Ricardo Rossello said yesterday that he will stay in office despite protests calling for his resignation that turned violent overnight, Reuters reported. A peaceful demonstration that drew thousands to the streets of San Juan on Monday turned hostile in the evening when protesters and police clashed, injuring 21 law enforcement agents, officials said. The unrest was cited by a cruise ship company for its decision to cancel a scheduled stop by one of its vessels in the island’s capital city. The political turmoil comes at a critical stage in the U.S. commonwealth’s historic bankruptcy and as its officials seek billions of dollars in funding from the federal government for healthcare and for recovery efforts following devastating hurricanes in 2017. Protests against Rossello were sparked by leaked controversial and vulgar text messages between the governor and his closest allies and by a federal probe into government corruption on the island.

After three years of negotiations, Puerto Rico’s federal overseers are at last finishing up a plan to complete the restructuring of the island’s roughly $124 billion in debt. To resolve the biggest government financial collapse in U.S. history, they have had to untangle the island’s thorny finances, negotiate with creditors and figure out how to do it without endangering the livelihoods of retirees who rely solely on their pensions, the New York Times reported. That may have been the easy part: Some of the island’s creditors — including the hedge fund Aurelius Capital Management, which held up Argentina’s debt settlement for years for a better deal — will almost certainly challenge the plan on the ground that it violates the territory’s 1952 Constitution. At the center of it all are two intertwined issues. The oversight board wants to cut back the amount paid to some of those who hold the territory’s debt while also giving an unexpectedly good deal to more than 300,000 workers and retirees, some of whom do not even have Social Security. The good deal for the pension holders means a worse one for the holders of Puerto Rico’s debt. Read more. 

In related news, the administration of Puerto Rico Gov. Ricardo Rosselló was engulfed in crisis as top officials resigned and political allies in the U.S. territory withdrew their support after a trove of private messages were leaked, the Wall Street Journal reported. Puerto Rico’s former Chief Financial Officer Christian Sobrino and Secretary of State Luis Rivera Marín resigned their positions on Saturday, after the disclosure of nearly 900 pages of private messages between Gov. Rosselló and top administration officials that included vulgar insults toward prominent public figures. The messages, exchanged on the encrypted-messaging app Telegram, put more political pressure on an administration that was already shaken last week after two former high-ranking officials were indicted on federal corruption charges. Read more. (Subscription required.) 

A bill that would substantially boost federal Medicaid funding for Puerto Rico advanced out of a U.S. House subcommittee yesterday after lawmakers agreed to work on stricter safeguards in the wake of a government corruption scandal in the territory, Reuters reported. The Health Subcommittee sent the legislation, which would give the bankrupt U.S. commonwealth an additional $12 billion over four years, to the full House Committee on Energy and Commerce. On Wednesday, U.S. law enforcement officials announced a 32-count indictment and arrests of six people, including two former high-ranking Puerto Rico government officials, who were charged with conspiracy and other crimes in connection with millions of dollars in federal Medicaid and education funds. Angela Avila-Marrero, former executive director of Puerto Rico’s Health Insurance Administration, was indicted for her role in a scheme to steal federal Medicaid dollars through a corrupt bidding process with private contractors. Rep. Frank Pallone (D-N.J.), who chairs the Energy and Commerce Committee, said while the indictments were “very troubling,” there was no time to address the allegations in the bill. “We can’t lose sight of the fact that unless we act there will be a massive shortfall of federal funds for the Puerto Rico Medicaid program that would be devastating to the people that live there,” he said, adding he hoped lawmakers will work together to add “rigorous” oversight to the bill. Rep. Greg Walden (R-Oregon) said he was committed to ensuring measures are in the bill “to stop these types of fraudulent activities that are alleged from happening.”

The FBI yesterday arrested two former senior officials who served in the administration of Puerto Rico Gov. Ricardo Rosselló, leading the chair of the House committee that oversees Puerto Rico to call for the governor to step down, the Washington Post reported. The arrests also spurred concerns on Capitol Hill about the billions of dollars in aid that Congress has approved for the island. The federal indictment says that the former officials illegally directed federal funding to politically connected contractors. The arrests come about a month after Congress approved a controversial disaster aid bill that earmarked additional funding for Puerto Rico’s recovery from Hurricane Maria in 2017, which were tied up in part because President Trump called island officials “incompetent or corrupt.” Six people were charged in the 32-count indictment. They include Julia Keleher, who served as Puerto Rico’s education secretary until April; and Ángela Ávila-Marrero, who was the executive director of the Puerto Rico Health Insurance Administration until late June. Prosecutors said Rosselló was not involved in the investigation.