Washington - The U.S. House will swiftly address the bill that Puerto Rican Democratic Representative Nydia Velázquez (New York) is promoting to prevent conflicts of interest in firms associated to Puerto Rico´s debt restructuring.
Although Congress committees are not complete yet, they will start generating legislation in a few weeks.
Velázquez bipartisan bill seeks to fill a gap in PROMESA. For Raúl Grijalva (Arizona), Chairman of the House Committee on Natural Resources, there is a loophole in the law that has to be closed up.
The bill is co-sponsored –like it was at the end of last session- by Grijalva and Republican spokesperson for the House Committee on Natural Resources Rob Bishop (Utah) along with Andy Biggs (Arizona) and Resident Commissioner in Washington Jenniffer González.
The bill seeks to extend to Puerto Rico´s debt restructuring the same disclosure requirements that apply to federal restructuring processes. The bill was introduced after reports on how McKinsey and Company –leading advisor to the Board that oversees the island´s finances- was holding bonds issued by Puerto Rico.
“The people of Puerto Rico can’t have faith that this oversight board is putting their interests first if consultants helping implement the restructuring could profit from how much debt service is available under the very fiscal plans they design,” Velázquez said. “At bare minimum, the same disclosure requirements that apply to an ordinary bankruptcy on the mainland should hold true for Puerto Rico,” she added.
The bill requires attorneys, accountants, consultants, and other professional persons employed by the Oversight Board to submit verified disclosures to the U.S. Trustee regarding of their connections with the debtor, creditors, or persons employed by the Oversight Board, prior to being compensated under PROMESA.
If disclosures are not properly submitted or the U.S. Trustee determines there is a conflict of interest, then the Court can order not to compensate the firm.