Confirmation Hearings for Controversial Debt Plan Begin in Puerto Rico

Nov 9, 2021
11:59 AM

Protesters burn a U.S. flag to express their repudiation of the U.S-imposed austerity measures, San Juan, Puerto Rico, November 8, 2021. (Carlos Edill Berríos Polanco/Latino Rebels)

SAN JUAN, Puerto Rico — Inside the Clemente Ruiz Nazario United States Courthouse, Judge Laura Taylor Swain presided over the first day of confirmation hearings for Puerto Rico’s debt adjustment plan (PAD in Spanish). Outside, hundreds of people flooded the courthouse gates to express their repudiation of the plan.

The Financial Oversight and Management Board (FOMB) has started the confirmation process for the PAD, which will allegedly cut at least 50 percent of Puerto Rico’s $71 billion dollar debt. Gov. Pedro Pierluisi has called the PAD a “great step towards a promising future” for Puerto Rico. But members of social justice, labor, and student groups have expressed their opposition to the plan, claiming that it continues a systematic gutting of Puerto Rico’s public services to pay bondholders and vulture funds.

The first day of the confirmation hearings began with Judge Swain hearing arguments from pro-PAD groups, mostly consisting of FOMB members and creditors. The hearing are being conducted officially in English, with those who chose to speak in Spanish given a interpreter whose translation eats up their allotted time.

An elderly protester holds a sign which reads “Respect my retirement,” San Juan, Puerto Rico, November 8, 2021. (Carlos Edill Berríos Polanco/Latino Rebels)

Martin Bienenstock of the Proskauer Rose law firm argued that the PAD meets the requirements laid under both PROMESA and the federal bankruptcy code. He added that one of the benefits of the PAD is that it limits the types of debt the Puerto Rican government will be able to issue in the future to finance capital works.

John Rapisard, an attorney hired by the FOMB who represents the executive branch, stressed that the PAD is “sustainable.” He ended his remarks by saying that the PAD “is a lasting solution that, in the words of PROMESA, the government can undertake.”

After a midday recess, Judge Swain heard arguments from anti-PAD groups. Many of them highlighted that the proposed debt cuts are not tailored to Puerto Rico’s fiscal outlook.

Opposition to the PAD was headed by bondholder Peter Hein, arguing that “due to political pressure, the Oversight Board has repeatedly refused to make adjustments to public employees, which they had initially labeled as essential.”

A placard reads “UPR is not for sale” as protesters square off with police in San Juan, Puerto Rico, November 8, 2021. (Carlos Edill Berríos Polanco/Latino Rebels)

“Teachers are essential workers providing an essential service to Puerto Rico. Education is a constitutionally guaranteed right,” said José Luis Barros, the lawyer for the Association of Puerto Rican Teachers (AMPR). He asked Judge Swain to deny the PAD because freezing teachers’ defined benefit plans would put teachers on the brink of bankruptcy.

Several economists have characterized the PAD as unsustainable. Daniel Santamaría, an economist for Open Spaces, said “the reduction that is made to the debt in bonds is not enough to prevent the island from falling into a new default and leaves us in a place very similar to where we were before the bankruptcy, having to continue implementing austerity measures to guarantee payment to bondholders.”

While discussions for and against the PAD were going on inside the courthouse, hundreds of protesters gathered just outside the gates to voice their opposition to the PAD and the FOMB. Protesters, some of which had been camping outside the courthouse since the night before, included members from the Puerto Rican Independence Party (PIP), Citizen’s Victory Movement, and the Teachers’ Federation of Puerto Rico, among others. These groups planned their own different protests that blended together as the day went on.

“Financial Oversight Board! Colonial dictatorship!” screamed protesters just as the confirmation hearings began.

As the PIP-sanctioned protest was ending, hundreds of student strikers from the University of Puerto Rico (UPR) arrived. They had marched from UPR-Río Piedras, about two miles away.

The PAD assigns UPR an operating budget of $500 million for the next five years. UPR, which is the only public university in the archipelago, has already experienced a 36 percent decrease in its budget since 2017. Further budget cuts incurred by the PAD could force at least one of its campuses to close down permanently.

In response to budget cuts and to better organize away from academic stress, students at six of the 11 campuses —Mayagüez, Humacao, Bayamón, Cayey, Río Piedras and Ponce— voted to go on strike.

As soon as student protesters arrived, they attempted to tie their banners to the courthouse fence but the banners were cut down almost immediately by Department of Homeland Security officers. When the students tried to hang them back up, the officers fired pepper balls and police started pushing protesters away from the entrance to the courthouse, hitting at least one protester in the eye.

“The police want to remove the banners that tell the truth,” a protester told me while attempting to tie the banner back up. “The Fiscal Control Board is trampling the University of Puerto Rico.”

After being pushed away by police, protesters managed to tie their banners back up onto the fence and the banners remained there until the end of the day.

“Yankee go home!” screamed protesters as they burned a U.S. flag in protest of continued austerity measures by the FOMB that perpetuated the colonization of Puerto Rico.

“These aids can be suspended, they can be lowered, or they can disappear,” said Miguel Rodríguez, an 82-year old pensioner who’s been going to anti-PAD protests since it was first proposed. “We can’t make long-term plans based on federal aid, and that’s what those that are leading the Junta, the judge (Swain), the current government, and the legislature that approved this plan that will be disastrous for us are doing. We must counteract it. Protest on the street right now. We can’t sit idly by.”

On Tuesday, November 9, 25 people chosen at random through a lottery will present their thoughts on the PAD to Judge Swain. Among them are at least one bondholder and several public employees.


Carlos Edill Berríos Polanco is a freelance journalist, mostly focused on civil unrest, extremism, and political corruption. Twitter: @Vaquero2XL