Mass. activists continue to demand PR debt relief
Federal judges have been presiding over Puerto Rico’s bankruptcy for the past year
As a federal bankruptcy court in Boston held a hearing to determine the future of Puerto Rico’s debt crisis, local grassroots organizations gathered outside the John Joseph Moakley Courthouse Monday to demand cancellation of the island’s debt and diversion of more U.S. government resources to further rebuild Puerto Rico.
The U.S territory declared bankruptcy in May 2017 after years of borrowing to fill deficits caused by population losses and a poor economy. When Hurricane Maria struck and devastated the island last September, wiping out the electrical grid system, Puerto Rico’s $73 billion debt only intensified.
According to 2017 reporting by CNN Money, investors have been buying Puerto Rican bonds over the last decade even as the island fell into a recession and lost much of its tax revenue due to residents leaving the island in search of employment.
Who owns the debt?
Because of its high-risk economy, Puerto Rico paid bond-holders high interest rates and the investors did not have to pay any federal, state or local taxes on the interest they earned.
Less than a quarter of the debt is owned by U.S. hedge funds while the rest is owned by individuals and mutual funds.
Many investors have long realized they will have to take the losses, although how many losses on each side continues to be debated in the court system.
Otoniel Figueroa-Duran, commercial division director for 32BJ SEIU New England, spoke to the Banner outside Moakley Courthouse. “Hurricane Maria caused close to $100 billion in damages. There’s no way Puerto Rico can pay back the debt while many families are without food or electricity,” he said.
In 2017, the federal government approved over $50 billion in disaster relief aid to Puerto Rico.
Figueroa-Duran addressed the small crowd outside the courthouse. “Most of the hearings have been happening in New York but today, they decided to come to Boston,” he said. “We are welcoming them in the federal court and we know that the judge is going to put the best interest of the people before the banks.”
State Rep. Jeffrey Sanchez, who is Puerto Rican and is chair of the Ways and Means Committee, talked about the impact of the crisis on Puerto Ricans who have moved to the mainland in droves, and how locally, Massachusetts has invested in receiving them.
“That storm affected so much that thousands left Puerto Rico to come here in the U.S. and here in Massachusetts. We welcome them with open arms,” he said. “The legislature committed the resources. Over $35 million has been committed to our schools, family resource centers and housing programs.”
Additionally he said, “With the help of 32BJ and so many others, we’ve raised $3.5 million in private donations to make sure we have boots on ground with community-based organizations to help folks get back on their feet. But the debt is so big, we need help. We’re asking for help.”
Damali Vidot, Chelsea at-large city councilor, attended Monday’s demonstration. She said that the issue boils down to corporate greed.
“The only debt we should be discussing is the debt owed to the people of Puerto Rico for years of colonialism. The investors should sacrifice their third yacht for the basic necessities of the people on the island who are in need of food, water and electricity,” she said.
Gillian Mason, co-director of the Massachusetts Jobs With Justice coalition group, said Puerto Rico’s debt crisis is part of a bigger system that was created by those who “rigged” it.
Mason said, “The crisis happening now is so typical of what’s happening throughout the country, except on steroids really, fuelled by the legacy of colonialism and racism that has huanted the people of Puerto Rico for years.”
“We’re here to speak out against the bankers who are demanding their share before the people of Puerto Rico have a chance to rebuild,” she said.
Puerto Rico’s federal financial oversight board, appointed in 2016 by the Obama administration, is in charge of leading negotiations with debt holders. However, the board has been controversial among Puerto Ricans for its lack of transparency and the fact that its members were not popularly elected.
Figueroa-Duran said that both the fiscal board and the U.S. federal government have been in a tug-of-war to decide how much debt will be paid, but “we don’t believe it’s possible we can pay it back.”