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Puerto Rico Recovery Accuracy in Disclosures Act of 2020

Floor Speech

Date: Dec. 8, 2020
Location: Washington, DC


Mr. Speaker, in 2016, Puerto Rico faced serious and increasing financial pressure brought on by significant debt and related obligations.

In response to that financial crisis, Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act of 2016.

This 2016 law set up a bankruptcy mechanism for Puerto Rico to address its obligations.

Like other existing bankruptcy laws, the 2016 law enables bankruptcy professionals, such as lawyers and consultants, to apply for payment for their services subject to court approval.

But the 2016 law lacked certain disclosure requirements for professionals, even though these requirements apply to professionals in any other bankruptcy case.

That gap in the law created the potential for unaddressed conflicts of interest for professionals involved in Puerto Rico's bankruptcy process.

To address this concern, H.R. 683 establishes disclosure requirements for accountants, lawyers, and other bankruptcy professionals working on matters related to Puerto Rico's bankruptcy.

The additional disclosure requirements in H.R. 683 increase the likelihood that any conflicts of interest will be caught and timely addressed before compensation decisions are made.

Taken as a whole, this added level of transparency will benefit important interests, such as those of the creditors and taxpayers and ultimately of Puerto Rico itself.

Mr. Speaker, I encourage my colleagues to support this bill, and I reserve the balance of my time.

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Mr. ARMSTRONG. Mr. Speaker, I rise in support of H.R. 683, the Puerto Rico Recovery Accuracy in Disclosures Act.

Representative Velazquez and myself have proposed this initiative since the last Congress, and I am thankful that on this occasion we have been able to count on the original cosponsorship of Chairman Grijalva and Ranking Member Bishop, as well as many other cosponsors, both Republicans and Democrats.

This bill is an important component in ensuring that the restructuring process under PROMESA looks out for Puerto Rico's best interests.

This legislation requires any counsel and professional personnel that the Financial Oversight and Management Board may hire to work on a title III case for the restructuring of Puerto Rico's debt, to submit verified disclosures of their connections with the debtor, creditors, or persons employed by the board prior to being compensated.

This provision will impose on the decisions about the hiring of personnel for the restructuring the same requirements as are imposed on such personnel under the existing bankruptcy rules.

Our intention is not to exclude anyone's expertise and knowledge of Puerto Rico's fiscal transactions from being resources in the restructuring process. But I think it is essential that any such connection be clear and known, so that such persons' qualifications and the role they are going to play can be better evaluated. And that has happened in the past. So I think the result of this legislation will clarify that and will not allow that to happen again. Conflicts of interest or the appearance of conflicts of interest can be best avoided if there is accountability and transparency.

This bill would require that such personnel must disclose in detail their participation and involvement with any entity involved in the issuance of Puerto Rico debt and in any claims involving Puerto Rico's debt, informing the identity of each.

Anyone who is serving on the board or working to inform its decisions--and I may say the President today announced three more new members to the Oversight Board, so I think the time of approving this bill is just accurate--or representing it before the title III court, must have the trust of all parties that they are committed to defending the interests of the people of Puerto Rico to the best of their ability in accordance with the law and justice.

A lack of transparency in these personnel decisions creates a lack of confidence and distrust. Learning that someone used to be involved in the businesses of one of the parties in the case only after they are named and working on that case does not create an assurance of their commitment to the best interests of Puerto Rico or the managing of their debt.

That is the reason everyone's ultimate goal must be to reach out and reach the day that we no longer need the provisions of PROMESA or the Fiscal Oversight Board in Puerto Rico, and we can dedicate ourselves to rebuild and grow our economy.

Until that happens, we must demand that the instruments created by PROMESA be accountable and transparent in their processes. Nothing less should be acceptable, and that is the reason I call upon my colleagues to pass H.R. 683.

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Mr. ARMSTRONG. Mr. Speaker, I couldn't have said it any better, and I yield back the balance of my time.

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