$4 Billion securities fraud in PREPA, will be paid by the people of Puerto Rico

An official report from the Puerto Rico legislature reveals that from 2009 till 2012, the Puerto Rico Electrical and Power Authority (PREPA) illegally borrowed $4 billion dollars in a Ponzi scheme that “benefitted the financial community” but left PREPA insolvent.

For this reason Puerto Ricans pay 300% more for their electricity, and a “Financial Control Board” will force them to pay for PREPA’s illegal and unpaid debt. You can view the entire 23-page report here:

http://www.caribbeannewsnow.com/docs/prepa_report.pdf

With shocking clarity, the 23-page report details how almost all of PREPA’s $4 billion was used to “refinance” existing debt, over and over again…but paying only the interest and very little of the underlying principal.

In underlined words on page 12, the report states that from 2009 to 2012 “only 18% of the debt was used to finance the Capital Improvement Plan, while the remainder was used to re-finance the existing debt, capitalize interest, and issue advanced notes to pay future interest.”

Page 15 states that the $4 billion was borrowed “to benefit the financial community that issued the debt…without any moneys having been invested in improvements to infrastructure, all to the detriment of the people of Puerto Rico.”

Page 18 identified all this as “a fraud scheme for which the federal agencies…and the Securities Exchange Commission could take action and/or pursue civil suits against these institutions.”

The “institutions” include the investment banks, hedge funds, asset managers and law firms that created these debt instruments. In effect, they created a classical “Ponzi scheme” in which new investors were continually recruited, in order to pay off the claims of prior investors.

The Ponzi scheme has now gone bust.

SOME SERIOUS QUESTIONS

Pages 21 and 22 of the report show that the legislature of Puerto Rico was referring this entire matter to the Justice Departments of the US and Puerto Rico, as well as the SEC.

The report was dated June 9, 2015, which creates some serious questions…

If the “entire matter” was referred to the Justice Department and the SEC, why was no one investigated?

Why was none of the money returned?

Why was no one sued, fined, or jailed?

Why were none of the investment banks, hedge funds or asset managers held responsible?

Why are the people of Puerto Rico…who pay 300% higher electricity rates and an 11.5% sales tax…being forced to pay for the “financial community’s” crimes?

Why is a Financial Control Board being sent down, to make sure that the people pay for it?

THE FINAL (AND VERY SAD) QUESTION

Why has the legislature of Puerto Rico not pursued this, for the past ten months?

After all…it was their report !

Did some of them receive “benefits,” along with the financial community?

 

For a history of the War Against All Puerto Ricans, read the book…

War Against All Puerto Ricans: Revolution and Terror in America’s ColonyBuy it Now

Si prefiere ver la página web en español por favor visite: http://www.guerracontratodoslospuertorriquenos.com

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Puerto Rico might CUT its minimum wage

Dozens of American cities and states believe the U.S. federal minimum wage of $7.25 is way too low. Not Puerto Rico. The island might actually slash wages.

Congress just drafted a bill to help Puerto Rico climb out of its severe economic crisis and $70 billion debt debacle. One of the many band-aids House Republicans is showing Puerto Rico is a minimum wage below the federal requirement of $7.25 an hour.

It would immediately make Puerto Ricans the cheapest labor in the country, although only workers under 25 would qualify for the lower wages.

The goal is to get more Puerto Ricans employed. One in every 10 people on the island wants a job but can’t find one. That’s far worse than just about anywhere else in the United States.

Lowering the wage could make Puerto Rico more competitive “among neighboring islands where lower-wage labor is readily available,” the House Committee on Natural Resources explained in a press release accompanying the bill.

Related: Puerto Rico has become ‘dead dog island’

There’s some justification for paying less on the island. Across America, the typical household earns $53,657 a year. In Puerto Rico, the typical family earns a mere $22,477 a year, according to Census. The salary people need to live a middle class life on the island is far lower than in other parts of the country.

float to puerto rico

The House Republican plan to fix Puerto Rico

Republican House Speaker Paul Ryan praised the bill. Ryan vowed that Congress would come up with a way to help the island by March 31 — and that Puerto Rico would not get a taxpayer bailout.

The House Republican plan to fix Puerto Rico has three key parts:

1. Puerto Rico gets a Financial Oversight Board — A 5-member board would be appointed by the president and function like a quasi-Wizard of Oz for the island. The board would be tasked with coming up with a financial plan to get the island out of its mess.

2. A “time out” on lawsuits — The bill grants Puerto Rico an 18-month respite from any lawsuits, including from creditors demanding payment. It’s meant to give some breathing room so the Oversight Board can do its work in peace.

3. A “last resort” that’s similar to bankruptcy — The bill stops short of giving Puerto Rico the ability to declare bankruptcy (or giving it so-called Chapter 9 bankruptcy rights that other U.S. municipalities have). But the bill says if the Oversight Board comes up with a plan and the creditors still demand more, then the Oversight Board can head to court. In short, it means there is a possibility that the island’s creditors could receive less than 100% of what they are owed.

Related: There’s a big sale on Puerto Rican homes

What’s next for Puerto Rico

Puerto Rico’s governor and the island’s many bondholders don’t get along. They agree on little, but both sides immediately blasted the House Republican plan.

Bondholders want some sort of control board. They want someone they can trust overseeing the island’s money after what they claim has been years of government mismanagement. But they don’t want to get less than 100% of their money back.

“No one wants to say it, but the Puerto Rican government is broken,” Joaquin Garcia de la Noceda told CNNMoney in February. He’s a locksmith in San Juan, who has lost over $100,000 on his investment in the island’s bonds.

Related: Puerto Rican bonds: A retiree’s nightmare

Governor Alejandro Garcia Padilla wants to be able to declare bankruptcy. He says the bondholders are vultures who are squeezing the island. He called the plan for an Oversight Board “dishonorable” and “degrading” to Puerto Rico.

People familiar with the bill say it’s only a first draft. There will be revisions. A hearing is set for April 13.

Puerto Rico politicians accused of receiving over $100 million in bribes…with the FBI and US Attorney’s office as part of the conspiracy

In an enormous web of corruption, the Puerto Rico Power and Electrical Authority (PREPA) has been charged with diverting $100 MILLION A YEAR from the people of Puerto Rico to a conspiracy ring of government officials. A lawsuit has named 20 defendants, charging all of them with receiving bribes and defrauding the entire island.

The most shocking allegation is that these defendants were not investigated…because the FBI and US Attorney’s office in Puerto Rico, are a part of the conspiracy. Here is the entire legal complaint:

https://www.hbsslaw.com/uploads/case_downloads/files/case_pdfs/PREPA/PREPA_Complaint.pdf

FBI announces ten arrests in Puerto Rico…but NOT of PREPA officials

THE FEDERAL COMPLAINT

A detailed analysis of this complaint, shows exactly how government officials and lab directors (including a lab director named Luis Fortuño) manipulated the oil purchasing process, in order to overcharge the people of Puerto Rico for $40 billion in illegally imported oil.

https://waragainstallpuertoricans.com/2016/02/22/federal-lawsuit-charges-that-puerto-rican-politicians-received-100-million-dollars-in-oil-company-bribesand-a-principal-conspirator-was-luis-fortune/

After the New York Times reported on this scandal, the Puerto Rico Senate scheduled some investigative hearings that were so explosive, that witnesses refused to testify.

http://www.nytimes.com/2016/02/16/business/dealbook/at-puerto-ricos-power-company-a-recipe-for-toxic-air-and-debt.html?smid=fb-share&_r=0

http://cb.pr/prepa-fuel-purchase-manager-walks-out-of-public-hearing/

Administrator of the PREPA Fuel Purchasing Office, Edwin Rodríguez,
and his attorney José Andreu Font, walk out of a Senate hearing

This unwillingness to testify is not surprising: with the government of Puerto Rico about to go bankrupt, and the arrival of a Financial Control Board within a few weeks, there is a strong possibility that several people will go to jail.

http://www.law360.com/articles/624542/prepa-took-kickbacks-from-fuel-oil-suppliers-suit-says

But the greatest shock is the recent report of “law enforcement professionals” – FBI agents, US Attorney personnel, and their families – who may have received payments to ensure that no investigations, indictments or arrests ever occurred.

http://www.caribbeannewsnow.com/topstory-Personal-conflicts-obstruct-FBI-investigation-into-Puerto-Rico-fraud-29906.html

Ten arrests at PRASA…but NO arrests at PREPA

The allegation of “protection payments” to exclude PREPA from government prosecutions, gains added credibility when it is compared to recent events at PRASA.

On December 3, 2015, the FBI arrested ten Puerto Rico government officials and businessmen. The arrestees include Anaudi Hernández Pérez, who is in charge of campaign finances for the Governor of Puerto Rico and for the Popular Democratic Party (PPD); a former vice president of the Puerto Rico Aqueduct and Sewer Authority (PRASA); the current head of PRASA purchasing; and the administrator of the Workforce Development Administration (WDA).

https://waragainstallpuertoricans.com/2015/12/04/fbi-arrests-10-in-puerto-rico-political-corruption-casehedge-funds-and-u-s-congress-prepare-to-celebrate/

The defendants were charged with extortion, money laundering, wire fraud, and federal program bribery at PRASA.

Yet with a twenty-year history of fraudulent oil purchasing, as proven sixteen years ago in a US federal court (Negrón v. Caleb Brett, 212 F.3rd 666, 2000) and documented two months ago in the New York Times, no one has been indicted, arrested or charged at PREPA.

http://scholar.google.com/scholar_case?case=15530411387113306421&hl=en&as_sdt=6&as_vis=1&oi=scholarr

http://www.nytimes.com/2016/02/16/business/dealbook/at-puerto-ricos-power-company-a-recipe-for-toxic-air-and-debt.html?_r=0

THE PEOPLE OF PUERTO RICO GET STUCK WITH THE BILL

Whatever the outcome of all this, one thing is certain: hustlers on Wall Street and thieves in the Commonwealth government, have been feasting on Puerto Rico for decades…and now when the bill comes due, these criminals want the people of Puerto Rico to pay it for them.

A powerful book by journalist Jay Fonseca, Banquete Total, discusses this tragedy in great detail.

Within a few months, more schools and hospitals will close. More people will lose their jobs and pensions. The banquet is over…and the politicians and money manipulators who feasted for decades, are the ones who should pay for it.

Not the people of Puerto Rico.

 

For a history of the War Against All Puerto Ricans, read the book…

War Against All Puerto Ricans: Revolution and Terror in America’s ColonyBuy it Now

Si prefiere ver la página web en español por favor visite: http://www.guerracontratodoslospuertorriquenos.com

Holyoke Council calls on President Obama to release Oscar López Rivera

oscar.march.jpgA march was held Tuesday on High Street in Holyoke — above in front of City Hall — in support of a resolution calling on President Barack Obama to release Oscar Lopez Rivera, a Puerto Rican national, from prison. He has served 34 years of a 75-year sentence. The City Council unanimously approved the resolution at City Hall after the march. (MIKE PLAISANCE / THE REPUBLICAN)

HOLYOKE — To the delight of a packed City Council Chambers, the council Tuesday approved a resolution urging President Barack Obama to grant unconditional release from federal prison of Oscar López Rivera.

Rivera is a Puerto Rican national who has served 34 years of a 75-year sentence for “seditious conspiracy” related to his participation in a a Puerto Rican nationalist group.

While nationally there has been debate about whether Rivera is a political prisoner or a terrorist, support was complete among the 13 councilors in attendance and most of the 18 speakers who made remarks in the public speak-out period.

“Let this man out of jail, please…You guys do it and I guarantee there’s going to be so many city councils in the United States following your lead,” said Jose O. Bou, owner of Salsarengue Restaurant & Seafood at 392 High St.

“Please let him out. He’s done his time. It’s time to let him out so he can enjoy his freedom as we enjoys ours,” Councilor at Large Joseph M. McGiverin said.

Led by Ward 2 Councilor Nelson R. Roman, who proposed the resolution, a march of more than 30 people was held in support before the City Council meeting from Salsarengue Restaurant to City Hall.

Roman said support is strong for the freedom of Lopez Rivera partly based on Holyoke’s population of 40,000 being about half Latino and many of those of Puerto Rican descent.

“That is the connection,” said Owen R. Broadhurst, of Northampton Street.

A Vietnam War veteran, Lopez Rivera has had the United Nations, labor groups and numerous levels of elected officials call for his release, Roman said.

“Be it therefore resolved, the city of Holyoke urges President Obama to exercise his Constitutional power to grant the immediate and unconditional release of Oscar Lopez Rivera,” Roman’s resolution reads.

Lopez Rivera has served 34 years of a 75-year sentence for “seditious conspiracy” related to his participation in the FALN, a Puerto Rican nationalist group that has used violence in its campaign for Puerto Rican independence from the United States, though Lopez Rivera has not been charged with participating in bombings or injuring anyone, according to news reports such as Encyclopædia Britannica, Mother Jones, a left-learning magazine, the New York Daily News and City Journal, a quarterly published by the Manhattan Institute, a conservative think tank.

Lopez Rivera is currently in the United States Penitentiary in Terre Haute, Indiana.

The City Council Development and Government Relations Committee voted 5-0 Monday to recommend the full council approve the Rivera resolution.

A story with additional detail about the City Council voting for the Oscar Lopez Rivera resolution will be published later this week.

Originally appeared on: http://www.masslive.com/news/index.ssf/2016/04/holyoke_council_calls_on_presi.html

In Shock to Wall Street & Washington, Puerto Rico Moves to Suspend Payments on $72B Public Debt

The Puerto Rican Senate and the House of Representatives have both passed an emergency declaration authorizing the governor to suspend payments on $72 billion in public debt—setting up a dramatic showdown between Puerto Rico and hedge funds amid the island’s historic debt crisis. The bill authorizes the Puerto Rican governor to “protect the health, security and public welfare … [by] using government funds first and foremost for public services.” The dramatic move comes one day after a group of hedge funds sued to freeze the assets of Puerto Rico’s Government Development Bank in efforts to stop the bank from spending money on the island that the hedge funds want to go toward upcoming debt payments.


TRANSCRIPT

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: The Puerto Rican Senate and the House of Representatives there have both passed an emergency declaration authorizing the governor suspend payments on $72 billion in public debt, setting up a dramatic showdown between Puerto Rico and hedge funds amidst the island’s historic debt crisis. The bill authorizes the Puerto Rican governor to, quote, “protect the health, security and public welfare … [by] using government funds first and foremost for public services.” The dramatic move comes one day after a group of hedge funds sued to freeze the assets of Puerto Rico’s Government Development Bank in efforts to stop the bank from spending money on the island that the hedge funds want to go toward upcoming debt payments.

Juan, you write about this in your column in the New York Daily News. Talk about the significance of what just took place last—what, this morning.

JUAN GONZÁLEZ: Right. Well, I had a column last night, and the final result was not clear yet, because on Tuesday morning, the Puerto Rico Senate, at 2:30 in the morning, approved a moratorium on debt, declared, in effect, an emergency, a public emergency, in Puerto Rico and authorized the governor, under the Constitution, to suspend all debt payments until January of next year. Then what happened, though, that it was an all-day debate in the lower house, the House of Representatives in Puerto Rico. The bond—the Puerto Rico bonds dropped to their lowest level on the markets in history. And the—and there was a huge press by lobbyists, financial industry lobbyists, to stop the House from voting. Then, around 1:00 a.m. this morning, by the barest of majorities—I think 26 votes, which was the bare majority needed—the governor managed to get through a similar bill in the House of Representatives—not exactly the same as the Senate bill. It doesn’t decree an immediate suspension of the payment, but authorizes the governor, on a case-by-case basis, to suspend any debt payment of either the government of Puerto Rico or the public authorities of Puerto Rico.

So, basically, it sets up a collision now between Wall Street, on the one hand, and also with Washington, because there are two things that really have spurred this. One was that on Monday a group of hedge funds went into court to try to basically freeze the assets of the Government Development Bank, because they’re afraid that the bank is using money that should be going to bondholders, to help the government pay its debts—I mean, sorry, pay its services, for public services.

And then, two is, last week, the Republicans in the House finally revealed their proposal for Puerto Rico, which in essence is a complete takeover of Puerto Rico. One former governor of Puerto Rico called this control board that the Republicans would set up a “Dictatorial and Colonial Board,” because it would allow the president to name five people to an oversight board in Puerto Rico, only one of whom has to be a resident of Puerto Rico. The other four could live in the United States, be residents of the United States. But more importantly, unlike the D.C. bill—because in ’95, when the government established a control board over the District of Columbia, the president named five members for the control board with—in consultation with the Congress. But the president basically got to name them—Bill Clinton. This time, the Republicans are proposing that President Obama would—four of the people named by President Obama would have to come from a list provided either by Speaker Ryan or by Senate Majority Leader Mitch McConnell. So four would be Republicans, and only one would be a Democrat. So it would be, in essence, a Republican takeover of Puerto Rico, and that board would have the right to—must approve all budgets, all laws that would be passed by the—

AMY GOODMAN: Sounds like the city manager laws in Michigan—

JUAN GONZÁLEZ: Yes, exactly like city manager laws.

AMY GOODMAN: —that led to the poisoning of the water supply of Flint.

JUAN GONZÁLEZ: They could also have to approve all contracts of over $1 million. They could create a sub-minimum wage for young people. They could privatize the electric company. Basically, a complete financial dictatorship over Puerto Rico. But the difference between the District of Columbia and these financial management boards is that 60 years ago the United States went to the United Nations and declared that Puerto Rico was no longer a colony, because it had self-government. And precisely, it said to the the United Nations that the president of the United States and the Congress no longer appoint any officials of the Puerto Rico government. This bill would do just the opposite: It would create the most powerful officials in the Puerto Rican government, that it would control the entire economy of the island. So, it’s a direct contravention of what the United States justified to the United Nations for removing Puerto Rico from the list of colonies.


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