Puerto Rico's Sovereign Debt Crisis

PR problem is worse than those numbers show, PR has very few resources unlike the US. We also can not print money when we run out, unlike all those other countries and we can not get an IMF loan either.

Dont get me wrong your numbers are very good, but one needs resources like gold, oil, wood, coal, uranium, etc to pay the debts, PR has basically taxes on a diminishin population and a little tourism since we have Cuba and DR to compete with.

I do not belive the numbers you show take into account natural resources that have not yet been exploited, like extimated value of oil on the ground or Diamonds in a mine, my point is those countries have resources they can use over the years to bring down the debt, we dont have those resources.

Rey,

To a great degree you are correct.  Also Cuba and the DR are much larger land masses than Puerto Rico.  But yes, the one huge difference is China, U.S.A., EuroZone, Russia, etc all can and will continue to print their way out of debt.  (or enter numbers in the computer, as one prefers one's metaphor)  Puerto Rico is a protectorate of the U.S.A. and has no control of its currency.  Very much an apples to oranges comparison.

Oh and a BTW to SawMan:
Thank you for the add'l data.  I believe it continues to make both our points.  The last time I looked at Spain from a source I trust, they were pushing 200% of GDP.  And looking at the last two, if you really believe the figures from the communista gov'ts of Russia and China, gimme a couple months to get to Puerto Rico.  Then I'll have some real estate I'd like to sell you.

2nd BTW to SawMan:
More apples to apples and to really show me up.  Compare accurate GDP to debt, your home state of Texas to my home state of California and see how that shakes compared to PR.  Your lady comptroller, can't remember her name right now, one of the most decent and responsible politicians in the U.S.A.  God bless her.

Seriously, we are all in for some difficult times ahead my friends.  In some small way I hope to contribute to PR when many are running in the opposite direction.  At my "advanced" years, again, we shall see. 

ReyP wrote:

PR problem is worse than those numbers show, PR has very few resources unlike the US. We also can not print money when we run out, unlike all those other countries and we can not get an IMF loan either.

Dont get me wrong your numbers are very good, but one needs resources like gold, oil, wood, coal, uranium, etc to pay the debts, PR has basically taxes on a diminishin population and a little tourism since we have Cuba and DR to compete with.

I do not belive the numbers you show take into account natural resources that have not yet been exploited, like extimated value of oil on the ground or Diamonds in a mine, my point is those countries have resources they can use over the years to bring down the debt, we dont have those resources.

Consider also Rey that even if (and when) PR resolves its debt issues, it's not like it used the massive borrowing to build a world-class infrastructure, such as utilities, transportation and education system. It lags in all categories so it really has nothing but a hangover to show for all the problems.  The first thing it will need to do is (again) go to the debt markets and issue massive amounts of debt to perform needed maintenance and then address capital improvements it should have in place.  At least Japan spent its borrowings on creating an efficient high-speed rail, internet and other infrastructures.  Okay, maybe their nuclear power needs a bit more work.

Carlos when in RD wrote:

Rey,

To a great degree you are correct.  Also Cuba and the DR are much larger land masses than Puerto Rico.  But yes, the one huge difference is China, U.S.A., EuroZone, Russia, etc all can and will continue to print their way out of debt.  (or enter numbers in the computer, as one prefers one's metaphor)  Puerto Rico is a protectorate of the U.S.A. and has no control of its currency.  Very much an apples to oranges comparison.

Oh and a BTW to SawMan:
Thank you for the add'l data.  I believe it continues to make both our points.  The last time I looked at Spain from a source I trust, they were pushing 200% of GDP.  And looking at the last two, if you really believe the figures from the communista gov'ts of Russia and China, gimme a couple months to get to Puerto Rico.  Then I'll have some real estate I'd like to sell you.

2nd BTW to SawMan:
More apples to apples and to really show me up.  Compare accurate GDP to debt, your home state of Texas to my home state of California and see how that shakes compared to PR.  Your lady comptroller, can't remember her name right now, one of the most decent and responsible politicians in the U.S.A.  God bless her.

Seriously, we are all in for some difficult times ahead my friends.  In some small way I hope to contribute to PR when many are running in the opposite direction.  At my "advanced" years, again, we shall see. 

I too have heard worse numbers than I posted for some of these countries, so I assume "latest available data" is not reflecting a worsening of some countries.  And, I agree that the U.S. and other countries to wipe out their debt tomorrow by simply printing more money and using it to buy Treasury debt.  That's basically what the Fed did, except the debt was not canceled.  It just reflects it on its own balance sheet as an asset.  How silly.  The reason Russia and so many other countries have so little debt is that no one would loan them money!  The truth is there is NO political will to fix the problems when it is so easy to kick the can down the road and simply promise voters more and more benefits (in return for their support). 

And, as disgusting as our (U.S.) debt figures are, you are correct that this does NOT include state and local government debt!  Nor does it included unfunded liabilities, notably pension debt.  Imagine including in these figures the trillions of unfunded liabilities for Social Security and Medicare obligations "promised" recipients!  Illinois alone might have a ratio of well over 500%!

Okay now damas y caballeros, fair is fair.  The Texan born and raised lady's name is Susan Combs.  8 yrs as ag commisioner, 8 yrs as Texas comptroller.  No more sterling example of integrity and fiduciary responsibility in the middle of rough and tumble politics.  A grand lady, Puerto Rico could hire her as the "let's clean house" federal oversight commissioner and do very well.

Now as to Saw Man's comments on unfunded liabilities and the real way debt should be honestly quoted, my for fun comparison between Texas where Ms. Combs vociferously fought for responsible pension funding, and California where conservatives have no real power and the progressives fight with each other over how big to make the give-aways, a real, honest GDP to debt measurement would show up California's "banana republic" state of unfunded liabilities vs Texas' modicum of responsibility.  And unfortunately Puerto Rico's unfunded liabilities are more like California's.

In Punta Cana I watched the Putin oligarchy spend their money and throw their weight around.  They spend real money while the regular Russian is paid in inflated rubles.  Yes, the U.S. borrows incredible amounts of money and instead of having to sell the bonds on a real market with real consequences like Puerto Rico has to, the U.S. gov't sells them to the federal reserve bank.  Then the fed declares they are holding an "asset" and voila, money, money, money.  No PR's politicians can't do this.  Thank God.  But the piper will be paid.  Know what you believe, be prepared.  And whether in Texas, California, or beautiful Puerto Rico, be glad you were lucky enough to be born in the USA.  And your sovereign is a republic, not a Vladimir Putin, Raul Castro, or the Chinese politburo.  See you soon PR.

Even with the debt, Puerto Rico has some respectable infrastructure compared with to the Dominican Republic. If you subtract the Samana region in the DR. The interstate in Puerto Rico is overall superior to the DR and Panama, excluding the segment from Panama city to the airport.

I looked around in the hills, Ponce, Mayaguez, Arecibo and notice, the quality of low income housing. Unless I missed some large areas, it was notice Puerto Rico does have more standardize housing codes. Compared to other countries with less national debt.

Yes Vagantem, as one simply intelligently looks at what one can see with eyes open, what you see is the difference between the result of Puerto Rico's government and the Dominican Republic's.  Let's add Cuba, we Americans just don't normally see in person as much.  3 former Spanish colonies, populated by a genetic mix of colonialists from Spain, west Africans kidnapped into the slave trade, and a bit of native Tainos thrown in for spice.  The Catholic church for religion, Espanol for the language, tropical climate and the large Caribbean islands for the setting.  Put all in a mixing bowl and stir.  Now, what do ya got after 300+ years of aging the mix.  It really is a striking laboratory example of comparative political theory.  Kinda like hold constant for all variables except form of political structure.  So what do we see? First off, we should note we have a culture and a people who are so much fun that they and their culture and music hold a special place in our hearts outsized to their numbers.

Both Cuba and the Dominican Republic fought for and won their independence from Spain in the 1800s. The two countries are by far the two largest landmasses and populations in the Caribbean. In Cuba, born in the early 1900s we have the son of a poor farmer, Fulgencio Bautista who came to power in the 1930s and was a totalitarian dictator. A popular revolt grew in strength and Batista was eventually forced to flee after losing a battle on New Year's Day in 1959. (Interestingly, the first place he fled was to the friendly government of Manuel Trujillo in the Dominican Republic.) Fidel Castro came to power out of the mix of nationalist revolution groups and he and his brother Raul give us our governmental example of communism. One of the major themes of Fidel Castro was the destruction of the cultural integrity of Cuba by the profligate and libertine capitalism of Bautista. Havana had become the playground of the rich. Today in the impoverished neighborhoods of Havana, women who feel they have no other alternative make money as "servicers" in the sex tourism trade and provide a cruel irony to Fidel's pontificating.

In the Dominican Republic also rising from poor agrarian beginnings we have the ruthless dictator Rafael Trujillo taking power in the 1930s. Large numbers of people, whole families, who opposed his rule simply disappeared. It is estimated Rafael Trujillo was responsible for the deaths of upwards to 50,000 people before his assassination in 1961. After a bumpy transition the Dominican Republic, in form being a representative republic, has held its every four years national elections since. The most recent political dynasty, that of Leonel Fernández, is a corrupt, paternalistic, ruling class model where the patricians passout the government freebies.  Leonel Fernández himself was born in Santo Domingo, but grew up in Washington Heights, Manhattan, the Dominicano barrio of New York City. I have heard it said of him he never met a loan he didn't like.

Puerto Rico in contrast to Cuba and the Dominican Republic has never been politically independent in the roughly 500 years since being colonized by Spain. In 1898 Spain ceded Puerto Rico to the United States. In the some more than 100 years since becoming an unincorporated territory of the United States, Puerto Rico has gone through some times of tumult as the relationship between Puerto Rico and the United States has evolved. As it stands, Puerto Rico has a considerable measure of self-governance, those born in Puerto Rico possess a full legal status as citizens of the United States and therefore possess the same federal constitutional rights as any other United States citizen.

So as we look out at the landscape of communist Cuba, the independent Dominican Republic, and the protectorate of the United States, Puerto Rico one ought to be able to make some observations about the three different forms of government. And observations as to the benefit of being a part of the United States. Indeed the economic status of Puerto Ricans is vastly different than that of the "proletariat working class" of Cuba. And working-class Dominicans living under the paternalism of the ruling class in the Dominican Republic economically fall in between. To any honest observer with a keen eye, as Vagentum has pointed out, housing, infrastructure, and much else are way better in Puerto Rico than either of the other two. Yet precisely because Puerto Ricans have an excellent vantage point of seeing what life is like for a typical working-class American on the mainland, many of the best of those younger of the society wanting a better life for themselves, there being no restriction flee to the mainland, have left their beloved Puerto Rico. The result is that Puerto Rico is in a socio--economic death spiral. Many nativeborn Puerto Ricans love the place of their birth with full hearts. I suspect truth be known, the fundamental motivations of Gov. Alejandro Garcia Padilla would be because he is numbered among this group. Love by itself as a motivation is not enough to make the wisest decision. It is a good thing that there is a limit somewhere as to how much money can be borrowed on behalf of the Puerto Rican people.  Sans said limit Puerto Rico would be borrowed into oblivion.

As I start a new chapter in my own life, I hope to use my entrepreneurial talent to contribute in some small way to the revitalization of Puerto Rico's economy. But, hang on to your hat. We've got some tough times to weather first.  I've chosen to weather the storm in my new home of Puerto Rico rather than my native California.

Note:  If one would like a quick picture, learning experience on how whacked out things are at the core of what controls our economy, I highly recommend seeing the currently in the theaters movie "The Big Short". I just went to see it last night. It is an amazingly well done expose of the real estate market crash of 2008, and the morally bankrupt system that caused it. It's very well acted and creatively done in such a way to help the average person understand what actually goes on behind the scenes at the big Wall Street banks. The same investment banks that "helped" Puerto Rico put its municipal bond market together. And the bad news is nobody fixed anything. The whole corrupt system is worse right now by a country mile than it was eight years ago.

You last paragraph is as exactly as my perception. Your second, third and fourth paragraphs are an educational enlightenment. The political history of the people was familiar to me. I had not studied the relationship between leaders of the different countries.

I concur with the assessment of the fifth paragraph. In the mainland USA, in areas with few quality jobs and variety of career choices; most college graduates or young professional favor migrating to other regions and communities.
Those communities can not maintain an equilibrium between graduates of standard or quality educational institutions and viable career options in the public or private sectors.
Moving forward, if the 72 billion is place aside for a moment. There should be a constitutional change in Puerto Rico to limit future budgets to be balance. Elected officials must become the first people terminated or have salaries garnished, resulting from an unbalance budget. This includes banning those imaginary numbers tricks used in accounting.
Being more practical now, I hope Puerto Rico can move toward independence. Talking with some people in Puerto Rico, I found they are worried about retaining some economic stability in their lives during any transition. Similarly, people were worried in Syria before the full civil war occurred. I hope PR leaders will not choose total separation from the USA. It certainly would result in several decades of calamity. Panama, Grenada, Haiti, Dominican Republic have experience growing pains toward full self-governance.

I hope PR will begin and continue toward the path of independence and realign the relationship and restrictions Puerto Rico has with the mainland. At this point, talking civilly is ineffective when you have two people of Latino heritage in the U.S. Senate representing the same colonial mentality, which has physically, and economically enslave people. It is better to speak plainly, bluntly and campaign against those who support the status quo. They do not deserve to hold any office and should be banned from the public sector at every level.

I too believe it would be best for PR to seek independence but under a democratic form of government with a positive relationship with the US.

I used to be a republican, but seeing what is happening in PR over the years, I think it is time for the people to wake up and take hold of their own future but as a democracy.

Vagentum, I want to say I understand your visceral feeling that Puerto Ricans emotionally feel they are as serfs.  This feeling can be very strong.  And when emotions run that strong, it is difficult to see the total picture rationally.  I think it safe to say it is as if regular people feel as if they trusted someone to tell the truth, and then were betrayed.

For those of us who are natural born Americans and learned and understood who Americas founding fathers were, what they believed, and why they fought and risked all, we are feeling betrayed as well.  And more are joining this perception every day.  I would ask you to consider the following, as I would ask of all Puerto Ricans.  Even with all our warts, as I mentioned above look at Castro's Cuba.  Look hard, please.  Take a real look at how the Dominicanos have been cheated by their crooked rich ruling class.  And then ponder that there is no other nation on the face of the earth where people will wake up tomorrow morning knowing that they have clearly stated unalienable rights, enshrined in their nation's constitution.  And that they themselves hold the power to right any wrongs facing us.  And that Puerto Ricans will wake tomorrow with the same personal freedoms as mine.  Because the way "one out of many" works, we are Latino, German, Dutch, French, or African only AFTER we are American.

Things as they stand are not good.  But, we citizens are not without responsibility for what is.  President George Washington put it this way.  "The foundation of our Empire was not laid in the gloomy age of Ignorance and Superstition, but at an Epocha when the rights of mankind were better understood and more clearly defined, he wrote in 1783.  At this auspicious period, the United States came into existence as a Nation, and if their Citizens should not be completely free and happy, the fault will be entirely their own.  Puerto Ricans are free.  They can choose to depart.  It is not too strong to say it is my personal prayer that they not trade their birthright for a bowl of porridge.  Around the 1970's I heard a story of a South African couple who got off the plane after arriving in the U.S. for the first time.  The man turned to his American friend and said, "My God, you can smell the freedom."

Don't get me wrong, I too agree that USA has the best type of government in the world, even with the amount of corruption of the political system and a president that is trying to bypass all the checks and balances and pass legislation while some members of congress are away and unable to vote.

As a good american I served in the US Army for close to 10 years in ACTIVE duty during the Vietnam era. I also held a security clearance so there was and continues to be no reason I would throw away my citizenship.

But let me get this clear: I am Puerto Rican first, and american second. I did not choose to be invaded and made into a colony.

If PR becomes independent and the US removes our citizenship, I will still be happy, as I am Puerto Rican First.

Rey

Carlos, I believe the South African was smelling smog.

     Yes the founding fathers did want freedom for themselves, minus the slaves, only some of the possessed. But the point is they wanted freedom from an oppressive government. They broke away, formed a government of their own under the Articles of Confederation. That idea lasted 4 years.

     Next the Constitution of the USA was ratified, with the understanding women could not be equal in all civil matters and slaves where property and for census purposes, African slaves where less than equal to the Europeans. Native Americans where not even consider part of the freedom revolution until later treaties were signed and while under occupation. 

     Skipping to current era. The USA government is an organization, which consist of people in a temporary positions making decision affecting future generation.  All people are born and then die. The connection from generation to generation are the past documents, memory of people and now we have digital media. The current decisions our generation chooses is a reflection of the current mentally of people in government. It is also a reflection of the apathy of the public for allowing them to enact policies and laws or abstain during crisis. The Puerto Rican debt and the long downward spiral of the island's economy are examples of apathy of many in the public on the mainland.

     We, the US government composition at the time, wanted the Native American lands. Lets find them a small place to live or restrict them to a Reservation/ Plantation.

"Tribes deserve to be sovereign entities imbued with the authority of self-determination on their own land. For a healthy government-to-government relationship to exist the U.S. government needs to respect the binding agreements spelled out in their own treaties. All Native Americans should demand nothing less than what the U.S. government has promised them. That is why we at NARF, having sworn to preserve and protect the rights of all Native Peoples, take the battles to the courts."

"Not until 1924 were all Native Americans granted citizenship. Before this juncture only individuals who were members of federally recognized tribes and naturalized individuals were given the rights of a United States citizen. Presently all Native Americans born within the territorial limits of the United States are by law citizens. Native Americans have had the privilege of voting in national elections since 1924; however, until recently some states prohibited Native Americans from voting in local elections. New Mexico, for example, did not extend the vote to Native Americans until 1962. Most native people, of course, also are members of their respective sovereign tribes."

http://www.narf.org/frequently-asked-questions/

Solutions to consider. The mainland has changed their laws to fit their interest at any given time. Puerto Ricans, the population, not the government in Puerto Rico, should follow suit. There are too many Puerto Ricans on the mainland along with Dominicans, people from the US virgin islands and Native Americans to not have a persuasive lobbying block to flip some congressional districts to another party or away from a career politician.

I add the DR because, it is almost a de facto territory of the USA. Plus the migration of people between PR and DR has flip back and forth over recent decades.

Wow, much Vagantum, and I have invited a swerving away from "Sovereign Debt" primary subject. I could teach a 1 semester university level course on revisionist early U.S. history interpreted thru the lens of the pc present, but won't even start down that road.

"The current decisions our generation chooses is a reflection of the current mentally of people in government. It is also a reflection of the apathy of the public for allowing them to enact policies and laws or abstain during crisis. The Puerto Rican debt and the long downward spiral of the island's economy are examples of apathy of many in the public on the mainland."  Puerto Ricans themselves bear more blame on themselves than has the mainland.  Both bear responsibility.  The function of the constitution is to limit government's range of choices.  With the progressive lawlessness of the federal government, and culture in general, you are from a practical standpoint correct.  Very sad.

Again, we shall see if a remnant remains in the U.S. or no.  As to independence and self-governance by Puerto Ricans?  Be careful what you wish for.

Oh and a quick addon to Rey.  Aside from anything else, my genuine thanks for your service.  Being born in Puerto Rico, all the more special.  Heartfelt gratitude.

When I talked with Puerto Ricans, working class who are employed and unemployed, they acknowledge the culpability of their leaders. They also acknowledge a little apathy of their own and disgust in their local political system.

With my previous post, I was highlighting a solution forward. Change the dynamics of financing a debt solution to favor their interest. Just as the mainland has done same in past, in present and appears the future.

Waiting for mercy, has not worked well for most Native American tribes. Some of the few saving graces upon Native Americans has been operating their own casinos. Also capitalizing on recent oil deposits in North Dakota.  The 1 billion dollar settlement should help, even though the government is 54 billion short on that historical promise.

I know Guam and the Marshall islands took a stand and chose to redefine their relationship with the USA. The Marshall islands left the US but signed a treaty, Guam stayed with the USA,

The primary topic is the "debt." Realities which encompass any choice forward or inaction should be discussed.

The Jones Act. The big problem with PR's economy, or a major one?

Trying to get it, a lot more complex then I thought it would be as the Act relates to PR.

Here's an interview from this summer that Public Radio did with a PR merchant. It really wasn't that enlightening. What was were the extensive comments and the back and forth between commentators that followed.

So you can breeze thru the initial interview. But I was not able to breeze thru the comments, on my third read. Well worth the time.

http://www.pbs.org/newshour/making-sens … bt-crisis/

I am not sure if you guys are aware of this article about a bond fraud investigation being open.
http://puertoricomonitor.blogspot.com/2 … d.html?m=1

Sigh...the chickens are all coming home to roost! It reminds me of the Enron scandal where innocent bystanders were left holding the bag.

Hey Rey,

Thanks for the reference.  Probably why the big RICO guy went to the FBI.  RICO as in Racketeer Influenced and Corrupt Organizations, not a rich place.  If a RICO prosecution is already qualified this is gonna get good.  All the way to Wall Street.  Goldman Sachs and Citibank settin' up the bonds.  "Hey Puerto Rico, let us help you.  For a fee of course."  They will finger point at the financial rating agencies.  So you got political crooks and cronies skimming cash, oil companies taking kickbacks to get paid for one thing and deliver another, big Wall Street investment banks runnin' the bonds, and the fiduciary companies supposed to tell us simple folk if everything's on the up & up lying like rugs.

Oh yeah, this one's gonna get real juicy.  Pedro Pierluisi says for the feds to send fiduciary folks from the gov't to run hands on oversight is an insult to Puerto Rican "sovereignty".  I think maybe the folks whose retirement 401ks funds bought the bonds are having trouble feeling respected.  And it's gonna get worse.  A lot.

From my perspective, quite aside from Puerto Rico, if this helps the regular American to understand how corrupt Goldman Sachs, Citibank, JP Morgan Chase, etc are, SUPER.  They genuinely deserve all the public attention they receive.  And seeing as we're closing in on 1500 off the Dow Jones so far this year, led by financials and people who sell oil, these guys being in the public eye this year is jus' gettin' started.  EeeHa.

Wow.

In this case I agree it will get very interesting and it is likely to affect some of the stock market as some of the big players seem to be involved.

But RICO has been used in the past to prosecute people where there no no call for it just because they could loosely apply it,

In this case it sounds like it fits like a glove and the federal prosecutors are likely salivating over this. Great way to make a name for themselves.

By the way I read somewhere that the SEC did not have power over the PR municipal bonds, that some kind of deal was worked out long ago, maybe the SEC should also be investigated if this is true., and if so, how high in the government does the conspiracy goes as the SEC does not give up power easily.

I hope this mess does not affect my stocks (no bonds here).

Ask who is "auditor" Richard Lawless.

A free lancing, self anointed, out of work "Auditor", hired gun, a tool paid by a class action law firm. Really a nobody who posts an internet "audit' and comments that if he were in the position, he'd have to report these felonies. Waaaa? Nothing requires him to be in any position to report a felony. He's a shill for the law firm mentioned. Rather obvious, no?

If he thinks he has solved the riddle and there is a Ponzi, he doesn't tell you who is the Madoff, i.e., who got the dinero. Rather important element of a Ponzi, no?  It's just part of his shtick for the law firm he plugs.

A "rainmaker" bullshit audit if you will. similar to the 800 telephone number injury lawyers on TV that disgrace my profession. The really good injury lawyers don't advertise, don't have to. Other lawyers send then all the biz they can handle.

No government approval is required before any Joe Blow plaintiff files a civil RICO.  Uncle Sam's lawyers need internal approval before filing a civil or criminal RICO.

The lawsuit filed is a Joe Blow class action which may have merit. Too fresh to tell. If there is a viable civil RICO count, it is not evident from what Lawless and his law firm has made available. It would have to name names of who got the goods.

Don't overlook the disclaimer on the bottom of the purported class action lawyer's linked document. This document really is just another fishing rod. 

Class Action lawyers do it all the time. nothing really wrong with it other then top class action law firms know it stinks. Because, if there is a class certified the court will order notices to be sent to potential participants so that they can opt in, or opt out of the class. Everybody has gotten one once n their lives. PayPal is in that situation now, the defendant in a certified class. You probably got your email last week.

This mickey mouse version poses as something legally important, it's not, but the CoverOurAss follows and says:

"Hagens Berman purchases advertisements on search engines, social media sites and other websites. If you send us information, note that does not create an attorney-client relationship with the firm".

Oh, and it says don't forget to email us if you have info. Meaning we want you in the class which obviously hasn't been court certified yet. Or if it were, potential members--injured bondholders and every power user in PR would be getting one by court order, probably by publication in the newspapers and TV because of the size of the potential class

First time I have read of any Federal investigations of the PR power company. That huge news would have been out since the year Lawless got hired by this law firm to beat their drum.

And here's my disclaimer:

"The above comments are only the opinion of a know it all on an internet website who has no knowledge of the truth of his comments or the statements made by Lawless and do not constitute anything that should be taken seriously. Everything stated may be 1000% incorrect and deceptive and otherwise full of crap. The poster does not take a position on whether or not the reader should hold their breath until Lawless and his law firm save the day. Further, Richard Lawless may be 10000% authoritative on the issues and the law firm of Hagens Berman may expose what everyone thinks but doesn't know about the fraud of the PR power company known as PREPAGO."

I read a little of the included "Audit" and it seems that he is basing his numbers on news and publicly available documents, not a real audit of the books and transactions. The document is more like an opinion piece at a news paper than an audit.

If a company makes a blunder in their books and tells everyone that they have not collected or plan to collect on the stated funds, then ..... is it fraud or that a bunch of other idiots failed to read the warning in front of their faces?

So yea, maybe nobody will really look into the possibility of a fraud.

However ..... in situations like this, where a business is unable or unwilling to pay its debts and is asking for restructuring, would it not require an in depth audit by a trusted set of auditors for someone to agree to any restructuring? If I was lending them money or considering a restructure, I would require an in depth audit before I put any money at risk.
I don't get it.

yep, and that has been the gripe in Congress, if you believe in the Capitol Hill sometimes gossippy e-paper--"The Hill"--thehill.com--worth your bookmark.   That PR's books have not been forthcoming. And from the most important members--e.g. Sen Orin Hatch, Chairman of the Finance Committee. He is quoted as saying "PR can't cry poor mouth but not let us have a peek into their cupboard."

Not to be taken as "I believe this is factual", but one of the averments in the recently filed lawsuit by Bond Insurers against the Governor re: his clawbacks which resulted in a $37 million in interest default to certain bondholders is this: That PR actually has a $90 billion dollar reserve. Where they got those numbers, no clue, but although you can stretch things a little in the lingo of a lawsuit without getting sanctioned, that stretch is 90 billion long. Bullshit for which the plaintiff's lawyers are willing to get whacked by the court for a vexatious pleading? We'll see.

Not sure if you meant that they had 90 million reserve or 90 billion. 90 million reserve I can believe.

According to some of the news the supposed audit for congress eyes, is due to be released by PR sometime in February (all ready late). I wonder who is the auditor firm and how much the audit firm can be trusted, congress should have insisted on a very famous firm.

Among a thousand things that PR needs to do, they need to privatize the electric generation and distribution after a full new very deep audit so those taking over know what they are getting into. It should really (if possible) should be split into 3 generation companies and 3 distribution companies to create competition and the 3 companies should not have connections with each other. If there is no competition we are just replacing 1 monopoly with a more efficient monopoly and KWH prices will go up not down.

Hey DGD, ur disclaimer is great.

So regardless of where Mr. Pepperdine/UC San Diego (Lawless for an att'y? Really?) got his info, some things are either facts or not.  Example: There are 6 "cuts" of heavy oil from petroleum refining, 1-6.  No 1 is kerosene (was called in old days stove oil or coal oil), No 2 is where home heating oil and diesel come from, No 6 is the dirty crap nobody wants.  Now, if the head honcho dudes in PREPA colluded with their fuel suppliers, paid for No 2 like normal and took delivery of dirty burning No 6 and then took a kickback, this would either be a fact in the past or not.  With an evidence trail or not.  And if the hot shot RICO guy from FBI headquarters that wouldn't be in San Juan unless Comey wanted him there gets looking hard, not likely they're gonna be able to cover it up.

And it works like this.  DGD, I know you're gonna remember the scene in "Absence of Malice" (Paul Newman, Sally Field) where the federal prosecutor (Wilford Brimley) in the conference room says like "Well, I gotta go home with somebody's head in my briefcase."  Comey didn't send that guy down there to come back with an empty briefcase.  On the contrary, he wouldn't send have sent THAT guy unless the stuff goin' on was as thick as No 6 heavy oil.  My personal opinion is the big G-man is gonna be living in San Juan for a while.  And before he's done John Paulson might be reconsidering PR becoming the Singapore of the Caribbean.  Rather, more seriously said, this is going to do immense damage to Puerto Rico's reputation, most specifically to its reputation with mainland American taxpayers.  The #1 target demographic for PR's tourism industry.  And it's tourism $$ that have to be the start of pulling PR out of it's bad economy.

The bigger picture is that this year the available pool of discretionary $$ Americans will spend on tourism will shrink because we are heading into a recession.  And Cuba is coming online to compete for U.S. $$ at the same time.  PR's headlines will not make a BIG splash between the election cycle, ISIS/jihadists, and the U.S. economy melting down.  BUT, when "the shit hits the fan" on the mainland, Americans will be looking for someone to blame.  As I said earlier, Dow is down ~1500, oil is under $30 from over $100 last year in just first 2 weeks.  Regular Joe 6-pack is gonna be hurtin' bad.  And when the PR Muni bond/Wall St corruption headlines hit, Obama, the Clintons (yes, and the Bushes), Moody's Rating, the 3 Jones Act shippers left in Jacksonville FL, et. al. are gonna be all too happy to have some folks handy to throw under the bus.  Gonna get pretty ugly guys.  Best cinch them seat belts up nice & tight.

You are 100% right on the new head of the FBI in PR and I have posted his bio before. They ain't bringing Goliath in to kill David. At his first press conference he said: "More corruption in PR then NY".

Been here app 1 month. Give him 5 more months and grand jury subpoenas will be floating around the Plaza de Armas like a ticker tape parade.

And I predict the Department of Justice will bring in their own lawyers, "Strike Force", par for their course when an onslaught is coming--saw that several times in my town. Not that they don't trust who's there already--they're also Dept of Justice employees--but.

Yep, just bringing in the best hired guns.  I wish it wasn't happening.  But I didn't do it.  And we can't change what others have already done.  If there are real crimes of real import, then they need to be prosecuted.  That's what Comey's head of the FBI to do.  And the guy seems like an honest, stand up guy.  It is what it is.

I have a little different take on FBI Director Comey then you do, but yours is fine and I respect it. It's all in how you view the FBI and the Dept of Justice.  Nights in shining armor or over-rated to the point of idolatry that they have convinced themselves they deserve.

Any large group (Chicago has 14,000 P.O.'s) are going to be a mixed bunch of Excellent to Dogs, overly ambitious/driven to just biding time to retirement. I can tell you the consensus opinion re: the FBI from the federal criminal defense bar here--which I am not a member, but pal with on occasion, same watering holes: biggest and most blatant perjurers of any law enforcement, including the DEA and IRS. Call em PP's--professional perjurers, because they are that good at it. Sorry to those who think it's all on the up and up. Don't believe me. And probably are straight most of the time, but if the prosecution needs a PP to tie up the loose ends in a case that has holes, no problem getting the testimony they need. And juries have a hard time believing an FBI agent would lie.

So it was not surprising at Comey's Chicago "Hi I am now the Director and we are going to clean up this mess in Chicago" press conference last year that he got booed, rather loudly, at an event well attended.

John Kennedy had a saying, reported in the book written by his now decease press secretary Pierre what's his last name, Sal something, I forgot.

Kennedy would use this line in private when something would occur where it would fit. He would say:  "The 3 most over-rated things in the US are the FBI, the State of Texas, and (then would say whatever was drawing his ire at the moment)  hahaha.

Would be nice to send a lot of those in government to be girlfriends of a lot of inmates in federal prison.

And it happens. Off the top of my head, several FBI agents that were playing with Whitey Bulger are now afraid to "bend over for the soap in the shower". 

And we should never forget their godfather, J. Edgar, the cross dresser, who committed more crimes then 1,000 of the most notorious serial criminals combined.

Well J. Edgar probably dropped his soap as often as possible.

Pierre Salinger, the guy who became known as a carpet bagger in California for coming out to CA and beating Alan Cranston in a Dem U.S. Senate primary just by riding his deceased Jack Kennedy coattails.  Oh my, I'm gettin provincial here. Sorry.

Anyway, I hope the Puerto Rican politicians who really are crooks do get sent to jail.  And that whatever dirt they did comes to the light of day.  The best way to get better is to get all the infection excised, and to put the fear of prison in peoples minds who would follow the crooks lead.  Whether in San Juan or on Wall Street.  Or if I'm from a place called Hope and have a penchant for small Caribbean Islands owned by rich friends.

Salinger, ya that was his surname. Hahaha, I forgot about Pierre's venture into electoral politics, and that he actually won a California major primary. Too funny.

And, California also elected Schwarzenegger as their chief executive. TWICE, proving their collective cluelessness was not fleeting. He couldn't count to 8, in either language.

California politics has at times struck me as "so over the top stupid".

Not so in IL, Carlos. 

J Edgar dropping his soap, too funny Rey.

Wall Street or Island CEO or Politician, if they are corrupt, I hope they all end up in a hard prison, not the luxury ones where they get massages, steak and ribs.

Short term gains versus long term gains:
In order to raise funds to pay the debt, the government has been raising taxes and it looks like electricity may end up going up 7.5 more cents per KWH.

While these measures help pay the debt in the very and I mean VERY short term, it forces more people to leave the island.

In my opinion, the island should be going after eliminating the MAJORITY of the unemployment, by attracting companies to move in. They should offer very low taxation for 15 years for companies that create jobs, the more jobs the lower the taxes. The low taxation can be reviewed after the term and renew if necesary or adjust based on how well the economy is going.

They need companies to create thousands of jobs in Services like IT (Programmers, networking, Industrial design, etc), also more manufactoring for the uneducated masses. At tax time, the taxes are modified based on the number of permanent jobs created and maintained during that tax year, so at first is one rate and as they hire more people the tax drops.

Attracting a millionaire or two that are going to create 5 jobs is not worth it. Getting greedy with taxes only solves problems short term and makes bigger problems long term.

They should also work with the tourism companies like Hotels and others to drop their prices, Cuba and DR are taking a lot of business from PR since they are cheaper. I am not a friend of the Cruises, all they do is drop a bunch of people in Old San Juan for a few hours and the rest of the island gets nothing from those tourists. Besides that many people arriving at one time all is does is clog up the streets of Old San Juan and annoy the tourists and locals that also want to enjoy the area.

Companies and individual investors that make a lot of money but create few or little jobs should pay a lot more taxes. The majority of the taxes should come from a reasonable tax on the working class with Corporations that create thousands of jobs paying next to nothing.

What do you guys think?
Rey

Well of course in general you are exactly correct Rey.  Tell you what, Garcia Padilla says he's not running next time.  You make a new party and run for governor.  Gary, Sitka, Vagentum & me will be ur cabinet ministers.  (Probably can only count on Sitka part time but dgd & me can put some heat on him for part time at least.)  I got dibs on commerce & health care.  We'll make dgd attorney general.  Whaddya think?  (You guys gonna have to quit makin soap jokes tho.)

Gotta try and have a sense of humor.

http://www.slate.com/articles/news_and_ … valle.html

I didn't realize when I talked about the word "Commonwealth" that politicians used a an equivalent in the Spanish version that isn't.  The utterly vapid of constitutional law meandering thought process to try and get to an excuse for violating the constitution by "interpreting" something into existence is on full display in the description of Justice Breyer in the article linked.  One wants to say to Breyer, "My god man, have you no shame."  Then you realize it's why Hillary says if Republicans win we might lose decades of progressive victories.  Oh.  Yeah.  Another justice or two that actually believes the constitution means what it says might get installed on the bench.  Somebody might actually have the courage to say that one President sayin sumpthin to the UN doesn't confer the right to PR to have a state dept makin independent treaties w/Spain.  Course we'd have to say the same of Presidents who make arms treaties with Iran w/a UN stamp of approval.  Slippery slope we've been sliding on.

I'd say we all got some more bad before we're gonna get to move on to the good Rey.  But the way you are thinking is dead on the money.  So to speak. 

Well I probably need a college degree in law in order to be governor, so maybe I should start going to the university, LOL. Yes I need a good cabinet with fresh ideas, so come on down!

Once I am in the island I believe I will look into becoming active in the island politics, but not sure how yet. But at least I plan to have my voice heard, I don't think neither of the 3 parties would like what I have to say, as all 3 suck and I plan to let them know.