Yesterday, the Oversight Board asked the court to dismiss the lawsuit filed by Governor Ricardo Rosselló Nevares, because the Governor seeks to "challenge" the process of certification of the fiscal plan and the budget planned by the federal entity, although this is prohibited by PROMESA.
Immediately, the Executive Director of the Fiscal Agency and Financial Advisory Authority (FAFAA), Gerardo Portela Franco, said that his lawyers will examine the motion to dismiss and will be prepared to argue their position at the July 25 hearing.
By claiming that the lawsuit filed by Rosselló Nevares lacks merit, the Board assured that with his actions the Governor tries to "undo the isolation" of political pressures that Congress provided to that entity, as well as to "obstruct" the mandate given to the federal entity.
In a 40-page claim, the Board detailed the fiscal plan certification process, after Hurricane Maria, and told the court that it tried to reconcile differences on multiple occasions. But that due to the lack of an agreement, the Board asked the court to reaffirm the "solemn" duties of the entity regarding the certification and implementation of the fiscal plan and budget.
This week, Judge Laura Taylor Swain ordered Judge Judith Dein to address the controversy.
Rosselló contradicts himself
According to the motion to dismiss, Rosselló Nevares intends to challenge the actions of the Board in court when, before the approval of PROMESA, it was common to establish rules or procedures for the disbursement of funds established by the Legislature when approving the budget.
Furthermore, according to the Board, Rosselló cannot now question the scope of the fiscal plan and budget, since in other litigation under Title III, the government has proposed that once the fiscal plan and the budget are certified by the Board, they are indisputable.
However, according to Rosselló Nevares, the Board uses the process of certification to "micromanage" the government, which constitutes a usurpation of his powers as an elected official of the island.
"Notwithstanding that PROMESA entrusts to the Oversight Board in its “sole discretion” the two greatest policy instruments there are – the fiscal plan and budget – and expressly empowers the Oversight Board to formulate them and certify them with the fiscal plan being “deemed approved” by the Governor and the budget being “deemed approved” by the Governor and Legislature, the Governor contends “PROMESA preserves to the
Government the political and governmental power to make policy decisions," says the Board´s motion.
The “provision the Governor finds objectionable is and can only be a “recommendation” under
PROMESA (section) 205,” adds the document that even states that any law that allocates money from the budget for any purpose is included within the federal law and the power given to the Board to adopt and certify budgets.
While the Board seeks dismiss Rosselló Nevares' lawsuit, the US government has requested Swain, for the second time, to maintain the constitutionality of PROMESA.
Federal Justice defends PROMESA
Yesterday, in a motion, Assistant Attorney General Thomas G. Ward and special attorney of the federal Department of Justice, Jean Lin, told Swain that two recent Supreme Court decisions have no tangency points with the case of Puerto Rico and the federal PROMESA Act, as alleged by the Aurelius Management Investment Fund earlier in the week.
Aurelius, that seeks to dismiss the government's Title III request, sent Swain a copy of two opinions from the US Federal Supreme Court because, according to the investment firm, they validate their arguments against PROMESA.
For Aurelius, the actions of the Board are void, since the members of that entity were appointed by the President of the United States without the consent of the Senate, as required by the Constitution of the United States.
Aurelius sent Swain the US Supreme Court rulings in Lucia v. SEC and Ortiz v. United States. Both rulings occurred on June 21 and 22.
In the case of Lucia v. Sec, the Supreme Court decided that an official that was in a higher position at SEC should have been appointed, based on the appointments clause established in the US Constitution.
In Ortiz case, the Supreme Court determined that they have jurisdiction to review the decisions of the Armed Forces Court of Appeals, and concluded that the appointment clause in the US Constitution does not prevent a military judge from acting as a lower-ranking official in one court and main officer in another.
"These determinations directly impact several of the constitutional issues that have been brought in the objection and motion to dismiss of Title III that Aurelius has submitted," said the investment fund.
But, according to the federal Department of Justice, Aurelius' interpretation of both decisions is wrong, since such decisions only reaffirm that the appointment clause of the US Constitution does not apply to members of the Board.
For the federal justice, a finding that the appointment clause applies to territorial officials would not only be a blow to this historic practice, but would also challenge the current governance structures of the territories and the District of Columbia that have been in place for decades. It was added that, since the territories are subject to Congress plenary powers, the "complex" distribution of the powers of government provided by the US Constitution does not apply.
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