“Honorable Judge Laura Swain,
I am writing to you because I need your help. My wife and I own Puerto Rican bonds and no interest on the bonds is being paid to us in this moment. We need that money to live. I am 90 years old and my wife is 88. We live thanks to the Social Security. We do not go to Las Vegas, we do not go on vacations. We just live peacefully in our home. We do not ask for too much, only for you to help us collecting our interests on the Puerto Rican bonds.
I paid for those bonds in good faith. Without trust and good faith in their obligations to pay the interest, how will they (Puerto Ricans) be able to borrow more money that they need for their projects?
I love Puerto Rico. My family is full of Puerto Ricans descendents and some of them own Puerto Rican bonds. We are not rich in any way. Any help you may give us will be appreciated.
Thank you, your honor”.
That is Albert S. Ferrandi´s letter, one of the eight that have been written by citizens and entities to the Federal District Judge Swain -who is in charge of the Puerto Rico Title III cases-, with the expectation that the jurist will receive their claims and consider their proposals to solve the biggest and most complex government bankruptcy case in the US history.
This week, the Federal Court acknowledged receipt of the letters to Swain by including them in the case file that the Board initiated on May 3rd. The Board then requested the protection of Title III of the PROMESA federal law for the central government.
The communications received by Swain –some of them handwritten and others written by computer- have different dates, between May 23rd and June 30th, according to the notification of the Court. It remains unknown whether Swain answered the letters or not.
In addition to Ferrandi, Heraclio A. Amadeo Lopategui, a 79 year-old retired engineer; the authorized public accountant Eduardo A. Nin; the small entrepreneur Jerome E. Firsty, who describes himself as an 82 year-old war veteran that has lived in Puerto Rico for 55 years, and Carlos Sumpter have also written.
Swain has also received letters from the financial advisor Lila Marantz, who recommended the purchase of the Puerto Rican bonds to her clients in Hawaii and the Interim Dean of Academic Affairs in the University of Puerto Rico in Aguadilla, Evelyn E. González García who handed a resolution requesting the educational institution to be considered an essential service and to be part of the Title III cases. Last but not least is Felipe A. Morales Nieves, president of the Mayargüez Pro West Development Movement (MMPDO, Spanish acronym).
The letters sent to Swain offer a view on how the Puerto Rico fiscal crisis has affected people both within and outside the Island and the citizens expectations on the Federal Judicial Branch to be able to solve what the Puerto Rican government, the US Congress and the White House could not.
One of the letters, for instance, asks to examine the existence of conflicts of interest in the Board. Another one claims that the public debt must be audited and a third one pleads that the federal government is responsible of the crisis. The senders also raise issues that have not be argued so far, like the possibility of the federal government being obliged to pay the Puerto Rican debt and the need to adopt a mechanism for the so-called “vulture funds” to stop making profit at the expense of the individuals who lend money to Puerto Rico losses.
A little bit of everything
“Wall Street vertical power upon our balance system between the branches of the government is causing premature death in Puerto Rico. Premature death does not belong to God”, says the short letter from Sumpter, written on a sheet of paper with a page footer from El San Juan Hotel.
A research done by El Nuevo Día in the Corporation Record of the Department of State revealed that, in 2010, a corporation was registered under the name Sumpter Ministry in Cabo Rojo, with the purpose of helping “the third sector through the teaching of the Christian Gospel”.
On his part, Firsty, an 82 year-old veteran, made himself known to the Judge by telling that it is possible that she may know one of his childhood school mates from the Bronx, now a Judge, Alvin K. Helerstein. The man, who attached another two letters to his own, introduces himself as a small businessman and claims to have interacted with Governor Ricardo Rosselló Nevares while he was exercising in the gym of the Caribe Hilton Hotel. According to the man, he gave a letter to the Governor with proposals, but he still has not received an answer.
Concern in Hawaii
“My clients are retirees, individuals and, usually, middle class investors. None of us are operators or owners of hedge (vulture) funds”, wrote Marantz. According to the record of the Financial Industry Regulatory Authority (FINRA), Marantz has been offering investment advice for 28 years, without facing any complaints from her clients.
The financial advisor, who is a member of the firm Stifel, Nicolaus & Co. in Hawaii, told Swain that, if they allowed Puerto Rico to violate the debt payment, it would be the US Government’s duty to honor that obligation, since it has “a responsibility” with the Puerto Rican territory.
“While deciding the fiscal result of Puerto Rico, take into account that Puerto Rico offered these bonds as the main and first debt”, wrote Marantz, alluding to the general obligations of Puerto Rico, and then she closed the letter by saying “aloha”.
Conflicts of interest
Meanwhile, Amadeo Lopategui, who thinks the triple contributive exemption of the Island must be revised, wrote to Swain in order to extend her a copy of the “Pirates of the Caribbean” report. The Hedge Clippers organization analysis imputes the Santander Group and the directors José R. González and Carlos M. García of being part of a scheme that enriched the institution, since it operated the Government bonds emission with usurious rates while ruining Puerto Rico. González and García have rejected the accusations of the entity.
According to Amadeo Lopategui, the lack of regulations by the Securities and Exchange Commission (SEC) turned Puerto Rico into the “prey” of an “unstoppable greed” from the investors.
“If cutbacks are needed, and I agree that they probably are, the loan balance to be paid must be distributed based on its original investments”, said Nin.
To Nin it would not be “fair” to pay gains to “vulture” investors, who purchased the debt of the Island with huge discounts, at the expense of the loss of individuals who bought the bonds according to the initial value.
In his letter, the accountant explained Swain that if a speculative fund bought its investment with a discount and receives a cut to the main one, it would still earn money. While individuals who paid the initial value of the bond, would suffer loss.
“All I ask for is for the fairest solution to be taken into account and to consider the positions of individual creditors when you evaluate your proposal”, said Nin, who has Pensions Liability bonds and Sales Tax Financing Corporation (COFINA) bonds.
Time to audit
In the meantime, the leader of the Mayargüez Pro West Development Movement (MMPDO, Spanish acronym), an organization that groups around 21 professional and nonprofit entities in the west zone of the Island, wrote to Swain to offer her a different perspective of Puerto Rico than the one provided by “the powerful elite in San Juan”.
According to Morales Nieves, because of the decisions of the ones living in the metropolitan area, specifically in Guaynabo, “where “Guaynabitos” live”, Porta del Sol is the only region of the Island without highways or an economic plan, and it has no access to a nearby trauma hospital.
“From our point of view, the reason to audit the debt is to quantify the amount that each region has contributed to that debt, especially in infrastructure projects”, wrote Morales Nieves, alluding to the Puerto Rican Coliseo, the Convention Center, the dams and the urban train.
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