President Trump fired five of the eight members of Puerto Rico’s Financial Oversight Management Board, which oversees the U.S. territory’s budget plan. The island has been trying to find its way to fiscal solvency after struggling with its debt for years.
Mr. Trump dismissed the board’s chairman Arthur J. Gonzalez, Cameron McKenzie, Betty A. Rosa, Juan A. Sabater, and Luis A. Ubiñas, leaving only two board members in place, in addition to one appointed by the Puerto Rican governor, CBS News confirmed, according to a White House official. This was first reported by Breitbart.
Four of the fired members were appointed by Democratic presidents, while the fifth, Betty A. Rosa, was nominated by Mr. Trump during his first term and later renominated by President Biden.
One of the remaining board members was nominated by President Barack Obama and reappointed by Mr. Trump, while the other was nominated by Mr. Trump and later renominated by Biden.
Seven members are appointed by the president — six of whom are selected from lists provided by the majority and minority congressional leaders, and one is chosen at the president’s discretion — and one ex officio member picked by the governor of Puerto Rico, who serves on the board but has no voting rights.
A White House official said the board has been “run inefficiently and ineffectively by its governing members for far too long, and it’s time to restore common sense leadership.”
The financial oversight board was created by Congress in the last year of the Obama administration by the Puerto Rico Oversight, Management, and Economic Stability Act, known as PROMESA. It was established to help Puerto Rico address its fiscal crisis and prioritize and expedite badly needed infrastructure projects for the Island.
The oversight board said in a statement it was informed by the White House that the president had terminated the five members and that it would “continue to work to fulfill the mandate of PROMESA and in the interest of the people of Puerto Rico.”
Though PROMESA was enacted in 2016, Puerto Rico’s Electric Power Authority’s debt has yet to be negotiated, as bondholders continue to fight for billions that’s due to them.
File: The Puerto Rico Electric Authority (Prepa) Palo Seco Power Plant during Tropical Storm Ernesto in Toa Baja, Puerto Rico, on Wednesday, Aug. 14, 2024. / Credit: Xavier Garcia/Bloomberg via Getty Images
Amid the ongoing legal battle over how much Puerto Rico’s Electric Power Authority owes its bondholders, Democrats in Congress have also been weighing in. At a hearing in July about the financial board’s performance, Democratic Rep. Nydia Velazquez of New York slammed bondholder Golden Tree Asset Management, which is considered the main objector to the Financial Oversight Management Board’s proposal to cut the principal payment on PREPA bonds from $8.5 billion to $2.6 billion.
“They took advantage of a distressed government to buy cheap debt, and now they demand the maximum payment. This isn’t longer the story of PREPA’s bankruptcy. It’s a story of Golden Tree versus the people of Puerto Rico,” Velazquez said.
“Calls to eliminate the board now, simply because of its spending on consultants and its refusal to agree to the PREPA bondholders’ overreaching demands are premature,” Jared Huffman, Ranking Member of the House Natural Resources Committee.
According to Puerto Rico’s national newspaper El Nuevo Dia, the island’s Republican governor, Jenniffer González-Colón, previously said that the financial oversight board needs to leave “immediately.”
González-Colón said in a statement she “will work alongside whoever will be part of the new board, once President Trump makes the announcement.”
A day after the hearing, right-wing activist Laura Loomer wrote on X that President Trump had the power to fire members of the board and “replace it with a new board.”
“The failure of lawyers and consultants to resolve the bankruptcy of Puerto Rico has left the people of Puerto Rico without power, or a path forward,” Loomer said.
According to the text of PROMESA, “the President may remove any member of the Oversight Board only for cause.”
The White House official told CBS News no decisions about the replacement of the five members have been made yet.
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