[Congressional Record Volume 160, Number 111 (Wednesday, July 16, 2014)]
[Extensions of Remarks]
[Page E1172]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 2015

                                 ______
                                 

                               speech of

                          HON. DENNIS A. ROSS

                               of florida

                    in the house of representatives

                         Monday, July 14, 2014

        The House in Committee of the Whole House on the state of 
     the Union had under consideration the bill (H.R. 5016) making 
     appropriations for financial services and general government 
     for the fiscal year ending September 30, 2015, and for other 
     purposes:

  Mr. ROSS. Mr. Chair, I rise today in relation to language in H.R. 
5016 addressing Puerto Rico's financial management.
  I applaud the effort to work in tandem with the Commonwealth of 
Puerto Rico--an island composed of U.S. citizens--to provide lasting 
improvements to their financial structure and day-to-day management.
  I am concerned, however, that the taxpayer funds provided to assist 
Puerto Rico could potentially be spent in vain. I believe that stronger 
language holding the government of Puerto Rico to basic economic and 
democratic standards is essential to providing productive assistance.
  Two ongoing issues backed by the government of Puerto Rico give me 
pause.
  One was recently outlined by Mary O'Grady in the Wall Street Journal.
  In reference to the current financial woes and the enactment of a new 
bankruptcy law in Puerto Rico--O'Grady said, and I quote, ``so far 
Puerto Rico's political class seems more inclined to stick it to 
creditors and keep on keeping on,'' instead of getting their books 
straight.
  The bankruptcy bill--shepherded and signed into law by Puerto Rican 
Governor Alejandro Garcia Padilla--allows the restructuring of more 
than 19 billion dollars of debt by the government owned electricity, 
water, and highway monopolies.
  The constitutionality of this law has also been widely called into 
question.
  This is not the approach you want from a Government facing a 
potential default, especially one whose debt is `widely held by mutual 
funds and individuals'.
  It is important that any technical assistance provided by the U.S. 
Government is predicated on a strong foundation for the rule of law. 
Investors nationwide will suffer if Puerto Rico's political class does 
not stalwartly uphold the rule of law.
  This is a serious and timely matter. At the end of June--Moody's 
Analytics reported that Puerto Rico's probability of default within the 
year is higher than that of Argentina, Venezuela, and Ukraine.
  These concerns regarding the political class have already played out 
through the government's lack of respect for its contractual 
obligations.
  For example, after seven years of agreements between the government 
of Puerto Rico and a private institution--the Doral Financial 
Corporation--the government is now refusing to uphold its end of the 
contractual obligations. Puerto Rico's Government has announced a 
unilateral decision to annul the contract that required the Government 
to pay over $200 million in tax refunds to Doral.
  This example demonstrates a true lack of regard for the rule of law.
  As the U.S. Congress considers providing technical assistance to the 
Government of Puerto Rico due to the deteriorating economic and fiscal 
situation--certain assurances must be established to ensure that U.S. 
taxpayer dollars are spent on achievable, reliable, and long-lasting 
objectives.
  In conclusion, I believe that assurances should be made by the 
government of Puerto Rico to uphold all contractual obligations and 
respect for creditor rights in order to receive U.S. Treasury technical 
assistance.
  Moreover, if such assurances are made, I express my support for the 
collaboration between the U.S. Treasury and Puerto Rico to improve 
Puerto Rico's financial management.

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