Puerto Rico board sets Oct. 14 date for draft turnaround plan

[October 01, 2016]  By Nick Brown

NEW YORK (Reuters) - Puerto Rico's newly created federal oversight board set an Oct. 14 deadline for the island's governor to draft a fiscal turnaround plan on Friday, as its first public meeting was disrupted by angry protesters.

The board asked Governor Alejandro Garcia Padilla to present a plan laying out his vision for stabilizing Puerto Rico, which is grappling with $70 billion in debt, a 45 percent poverty rate and a decade-long recession.

The seven-member board, created under the Puerto Rico rescue law known as PROMESA, was appointed on Aug. 31 by President Barack Obama and legislators. It will have broad powers to manage Puerto Rico’s finances and facilitate debt restructuring talks with creditors.

The board met for the first time on Friday in Manhattan, electing Jose Carrion III as chairman. Carrion, one of four native Puerto Ricans on the panel, is an insurance executive and past chairman of Puerto Rico's Workers Compensation Board.

“We’re working as quickly as possible, and we’re establishing the procedures as transparently as possible,” Carrion told reporters after the meeting, which lasted less than 30 minutes.

It is unclear what impact Garcia Padilla’s fiscal turnaround plan will have. The unpopular governor is not seeking a second term in the Nov. 8 election, and the front-runner for his seat, a member of an opposition party, has different views on how to right Puerto Rico's ship, including by shrinking government and avoiding the debt defaults Garcia Padilla has initiated over the last year.

Garcia Padilla, in a statement late on Friday, called Carrion's leadership of the board a positive step.

"In this process, we will try to make the Board understand that, for the recovery to be real, it must deal with the fiscal aspects, while protecting the economic ones," Garcia Padilla said.

Puerto Rico's Governor Alejandro Garcia Padilla addresses the audience at the capitol building in San Juan, in this February 29, 2016 file photo. REUTERS/Alvin Baez/Files

Protesters inside the auditorium interrupted the meeting, shouting profanities and likening the board to a form of “slavery.”

"Shame on all of you,” yelled one protester before being thrown out. “Stop pillaging Puerto Rico.”

The board on Friday also voted to include most major Puerto Rican entities as “covered entities” under its oversight, including Puerto Rico itself, its public pension systems, its highway, water and electric authorities and sales tax authority COFINA.

The board voted to request financial information from Garcia Padilla including weekly cash flow reports, monthly reports on revenues and tax collection efforts and monthly payroll reports.

(Reporting by Nick Brown in New York; Editing by Daniel Bases and Tom Brown)

[© 2016 Thomson Reuters. All rights reserved.]

Copyright 2016 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.