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The federal control board that oversees the finances of Puerto Rico’s government approved a $12.4 billion general fund budget on Thursday for the U.S. territory after legislators failed to approve one amid intense bickering, the Associated Press reported. The board’s version of the budget was rejected last month by Gov. Pedro Pierluisi because it reduced government spending by $100 million. He said at the time that legislators would submit their own version, but the presidents of the island’s Senate and House of Representatives clashed and failed to approve anything before the July 1 deadline. “It’s unfortunate that the legislative process tied to the central government's budget was very controversial and took too long,” Pierluisi said in a statement. He said that lawmakers wasted an opportunity to include things that would be beneficial for Puerto Ricans, noting that while the board included some public policies he had insisted on, “certainly other important ones are missing.” The island's House of Representatives was scheduled to meet Thursday evening to try and approve another version of the budget, but the board already certified its version.

Authorities announced Thursday they have suspended the operations of Puerto Rico-based Euro Pacific International Bank, which officials previously said was under suspicion of facilitating money laundering and offshore tax evasion, the Associated Press reported. The bank was founded by Peter Schiff, a U.S. stock broker and financial analyst, and had 15,000 accounts by the end of 2019, according to online documents. The investigation was launched by Puerto Rico’s Office of the Commissioner of Financial Institutions, which said the bank that obtained a license to operate in the U.S. territory in 2017 came under scrutiny following a lack of internal controls, a lack of compliance and a level of insolvency. Commissioner Natalia Zequeira said that despite “numerous opportunities,” the bank “has not wanted to comply.” Jim Lee, chief of the International Revenue Service Criminal Investigation, said he could neither confirm nor deny whether Schiff was under investigation. Zequeira declined to say how many clients the bank has and its total assets, saying that is confidential information. However, she said creditors would be paid in a certain order. The bank was formed in the eastern Caribbean island of St. Vincent and the Grenadines in 2011, then later moved to Puerto Rico. In a 2020 presentation, the bank said 70% of its clients were corporations and small- and medium-size businesses. The other 30% was divided equally between individual investors and retail banking.

Officials in Puerto Rico announced another electric rate increase Wednesday, the seventh in a year amid continuing power outages and the U.S. territory’s economic crisis, the Associated Press reported. For a client that consumes 800 kilowatt hours, the new rate will be 33 cents per kwh, compared with the previous 29 cents. The average U.S. electric rate is 14 cents per kwh, according to the U.S. Energy Information Administration. The rate increase will go into effect Friday, angering many on the island of 3.2 million people who just deal with constant power outages blamed on crumbling infrastructure due to lack of maintenance. In April, a fire at a main power plant sparked an islandwide blackout. The increase comes as crews begin rebuilding Puerto Rico’s power grid that Hurricane Maria razed in September 2017, leavig some customers without power for up to a year. The electric rate increases have occurred since Luma, a private company, took over transmission and distribution a year ago from Puerto Rico’s Electric Power Authority, which is burdened with $9 billion in debt and is trying to emerge from bankruptcy.

McKinsey & Co. has been a top government consultant since 2016 in Puerto Rico, helping the U.S. territory’s financial overseers manage its spending. In that time, corporate clients of the consulting firm have won tens of billions of dollars of government business, new disclosures show, the Wall Street Journal reported. Since McKinsey began its work for Puerto Rico’s financial-oversight board, the firm has helped the board review and evaluate contracts with companies that are also McKinsey’s consulting clients, according to disclosures it filed in federal court last month and other public documents. McKinsey clients include some of the largest fuel suppliers to Puerto Rico, an infrastructure company with a major role in operating the territory’s electrical grid and contractors that support its public-health system. A McKinsey spokesman said that the firm served these clients on unrelated matters and that its work for them hasn’t conflicted with its work for the oversight board. Hundreds of other companies with financial interests in Puerto Rico also have ongoing ties to McKinsey, according to the firm’s disclosures and other court records and public documents. Most of these client relationships weren’t formally disclosed until last month, when a new federal law required McKinsey and other professional advisers to detail any ties to clients with creditor claims or other interests in Puerto Rico. The disclosures were required under the Puerto Rico Recovery Accuracy in Disclosures Act, a transparency law written in 2018 after some lawmakers raised concerns that the firm had undisclosed conflicts of interest in its work for the oversight board, which McKinsey has denied.

Mutual funds are pouring back into Puerto Rico debt, a notable comeback for the U.S. commonwealth that’s exiting the biggest ever municipal bankruptcy after five years and that still struggles with an uncertain economy bled by population loss, Bloomberg News reported. Island officials are trying to make sure investors don’t leave. Puerto Rico is hosting its first annual event for bond holders since before its bankruptcy in 2017, hoping to show that it has put an end to the runaway deficits that drove it into ruin and locked it out of capital markets. Among its selling points: a sharply reduced debt load that’s giving it a fresh fiscal start. Mutual funds run by big-name firms like Nuveen and Invesco have been buying the island’s bonds because of the high yield they offer and the tax advantage the debt carries. This time though, the funds are going in with the knowledge that a federally-appointed financial oversight board — despised by territorial residents as a vestige of colonialism — will ensure that bondholders get repaid. At the two-day conference, commonwealth officials and local business leaders are looking to convince even more investors and industries such as biotech and data and technology to look past the deficit spending that pushed the island into bankruptcy and buy into an economy that slumped for more than a decade as it has been battered by hurricanes, earthquakes and political corruption.

Hundreds of Puerto Ricans crowded into a convention center Saturday where federal legislators held a public hearing to decide the future of the island’s political status as the U.S. territory struggles to recover from hurricanes, earthquakes and a deep economic crisis, the Associated Press reported. One by one, dozens of people ranging from politicians to retirees to young people leaned into a microphone and spoke against the island’s current territorial status, which recognizes its people as U.S. citizens but does not allow them to vote in presidential elections, denies them certain federal benefits and allows them one representative in Congress with limited voting powers. The hearing comes two weeks after a group of Democratic congress members including the House majority leader and one Republican proposed what would be the first-ever binding plebiscite that would offer voters in Puerto Rico three options: statehood, independence or independence with free association, whose terms would be defined following negotiations. Congress would have to accept Puerto Rico as the 51st state if voters so choose it, but the proposal is not expected to survive in the Senate, where Republicans have long opposed statehood.

Puerto Rico Gov. Pedro Pierluisi (D) is hopeful that a House delegation due this weekend on the island will return to Washington, D.C., ready to quickly move on a bill to update the U.S. territory’s status, The Hill reported. The delegation, led by House Natural Resources Committee Chairman Raúl Grijalva (D-Ariz.), will be in Puerto Rico to get feedback on a proposed bill introduced last month that would allow Puerto Ricans to vote between becoming a state, an independent nation or an independent nation with a treaty of free association with the U.S. Pierluisi, who favors statehood as an alternative to the current territorial status, said he believes all options in the proposed bill are democratic, unlike the current status. “The three options that are given to the public or the people, the residents of Puerto Rico, the American citizens of Puerto Rico, are fully democratic — I have to admit that — the three of them,” Pierluisi told The Hill. “I much prefer statehood than the others. I think that’s actually the logical next step for Puerto Rico, but I respect the other two and people should be able to vote for them as well.”