Thursday, March 10, 2016
Puerto Rico Is Asking Congress To Run Out The Statute of Limitations
Puerto Rico is asking Congress to run out the statute of limitations on
fraud claims against them, and Congress is listening!
In a story about government corruption and fiscal misstatement our Con-
gress may insert themselves on the side of the defendant to prevent any
legal recourse by the victims.
It’s hard to believe but it is true. Between 2008 and 2013, Puerto Rico’s
public utility, PREPA issued billions of dollars in municipal bonds know-
ing they could not be repaid. In a June 2015 series of committee meetings
Puerto Rico Legislators heard testimony from many government represen-
tatives of PREPA and Ernst and Young their accounting firm. In the testi-
mony the auditors and executives of PREPA admitted that the company was
technically bankrupt when these bonds were issued and repayment was un-
likely. The Legislative Report HR 1049 concluded that what PREPA did may
have constituted a criminal act and the report recommended a copy of these
findings be sent to the SEC and FBI.
These billions in in bonds are primarily owned by retired Americans who de-
pended on their income to support themselves.
For the first time in history, the United States Government is considering rea-
ching out to protect a government owned utility from any civil litigation by
passing a law that temporarily prohibits anyone from suing Puerto Rico to re-
over their damages. This new law would postpone litigation just long enough
to run out the clock on the statute of limitations for fraud.
Not surprisingly, Treasury Secretary Jack Lew is promoting that Congress pass
this temporary moratorium. You see Jack Lew was the COO of Citibank from
2006-2008 when many of these bonds were marketed by Citibank.
It appears the fox is in charge of the hen house in Washington. Please contact
your Congressman and Senators to let them know how you feel about this.
Richard Lawless is CEO of Commercial Solar Power in Temecula, CA. The opinions expressed in the
preceding commentary are solely his own and do not necessarily reflect the views of The Puerto Rico
Monitor or its advertisers.