GOV. GARCIA PADILLA’S RECORD SHOWS FISCAL AND ECONOMIC FAILURE

Sustained Economic Decline, Pension Shortfalls, Job Losses & Brain Drain

  • GDP shrank by almost 2% in 2014
  • 63 plants closed in 2014
  • Lowest labor force participation rate in the Western Hemisphere at 41%
  • 14% unemployment rate
  • The Economist predicts that Puerto Rico will be the eight-worst performing economy in the world this year
  • Cost of living is 13 percent more expensive than the U.S. mainland
  • Pension fund is only 7 percent funded
  • Nearly 100,000 Puerto Ricans have left the island since Governor García Padilla took office in 2013

 

Government Development Bank: Broke and Unregulated

  • The GDB operates in the shadows, outside the regulatory authority of the FDIC, SEC or the Federal Reserve
  • Experts call the GDB the Puerto Rican Government’s “Piggy Bank” and a “Black Box”
  • Billions in unsustainable debt liabilities, with plans to borrow more

 

Emulating Argentina

  • The Debt Enforcement and Recovery Act repudiates billions in debt owed to investors—including many Puerto Ricans—and eviscerates the rights of bondholders
  • This Argentina-style treatment of bondholders was a factor in the downgrade of the Island’s bonds to junk status
  • Hired the same lawyers as Argentina to carry out its anti-business agenda

 

Erosion of the Rule of Law

  • Refuses to honor the rulings of the island’s judicial system, thus jeopardizing the livelihood of more than 1,000 employees of Doral Bank that live and work on the Island
  • Law 66—the Fiscal and Operational Sustainability Act—enables the Puerto Rican Government to cancel contracts unilaterally with private businesses

 

The Way Forward: A Financial Control Board

  • Members of Congress have expressed grave concerns about the direction Governor García Padilla and his administration are taking Puerto Rico
  • To ensure American taxpayer’s are not left holding the bag, to restore economic opportunity and ensure contracts are respected, it’s time for Congress to institute a financial control board for Puerto Rico
  • In the 1990’s, such a board successfully oversaw the District of Columbia