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Velázquez Leads Four Members of Congress in Filing Amicus Brief in Case Against Puerto Rico’s Fiscal Control Board

Velázquez Leads Four Members of Congress in Filing Amicus Brief in Case Against Puerto Rico’s Fiscal Control Board
November 2, 2021
Press Release

Washington, D.C.— Congresswoman Nydia Velazquez (D-NY), Congresswoman Alexandria Ocasio-Cortez (D-NY), Congressman Raul Grijalva (D-AZ and Chair of the House Natural Resources Committee), Congressman Jesus “Chuy” Garcia (D-Ill. and vice chair of the House Natural Resources Committee), and Congressman Ritchie Torres (D-NY) have filed an amicus brief siding with plaintiff Liga de Ciudades, a Puerto Rican non-profit organization, in a lawsuit against the Financial Oversight and Management Board. They are warning in federal court of the dire fiscal consequences for the elderly, women, teenagers, and citizens below the poverty level if municipal budgets are further slashed as part of the island’s debt restructuring.

In the amici, the Congresspeople assert that municipalities in Puerto Rico, which have borne the brunt of austerity measures, “are the first line of service and support to communities and constituents in Puerto Rico.” They go on to emphasize that they have all “witnessed, from their Districts, the impoverishing effect the Financial Oversight and Management Board has had on Puerto Rican Municipalities and their communities. The burden of the Oversight Board is especially great for amici curiae constituents who have migrated to their Districts because of the austerity measures imposed on their Municipalities of origin.”

“The Board’s jurisdiction should be limited to the central government and its government instrumentalities. Thus, the financial threat the Board poses to the Municipalities should not be allowed to continue”, the Congresspeople said, particularly when no Puerto Rico Municipality has ever defaulted its obligations with bondholders.

The lawsuit filed by Liga de Ciudades essentially seeks to prevent the Board from retroactively taking money away from Municipalities, as they have in fact done, further compounding the Municipalities’ frailty. Cristina Miranda-Palacios, Founding Executive Director of the League of Puerto Rican Cities stated: “We welcome with great enthusiasm the five Congresspeople joining our lawsuit.  It confirms that our lawsuit is on solid ground.  It also confirms that the fiscal control board continues to overstep its role, without any consideration to the rule of the law that created it or to the needs, realities and wants of our communities.”

The Congresspeople highlighted that, due to the austerity measures imposed by the Oversight Board, 43 Municipalities in Puerto Rico are at the brink of insolvency in the most disenfranchised regions of the Island.

“These 43 Municipalities provide services to a third of the population of Puerto Rico who, absent a unit of local government close to their communities, will be deprived of the primary care provided by these entities. The demographics of constituents that will be impacted by this nefarious situation should be a cause for alarm to all, and include the following: one in five will be children 17 years of age or younger, more than half will be women, 51% are below the poverty level,  four out of five do not have a bachelor’s degree, 16% have some type of functional diversity, only two out of five (40%) operate within the labor force, and the average annual salary is less than $18,000”, the Congresspeople said in the amici, filed by the law firm ECIJA-SBGB in San Juan, Puerto Rico.

“Municipalities cannot bear the burden of the Oversight Board’s unilateral austerity measures one more day”, the amici brief concludes.

The full brief is online here