WASHINGTON, D.C.
 – U.S. Senator Bob Menendez (D-N.J.), the highest-ranking Latino in Congress, today delivered opening remarks on his Puerto Rico Recovery Accuracy in Disclosures Act of 2021 (PRRADA) during a Senate Energy and Natural Resources Committee hearing. This bipartisan and bicameral piece of legislation would require consultants and other professionals advising the Fiscal Oversight Board in Puerto Rico to disclose potential conflicts of interests, ensuring that the people of Puerto Rico have access to the same transparency and disclosure practices required by law in U.S. mainland bankruptcy cases.
 
In 2016, Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), an effort to provide the people of Puerto Rico with a standardized bankruptcy process that would allow the island to restructure its debts, pay off creditors, maintain the provision of essential services to its people, and promote economic growth and development. However, the law failed to require bankruptcy advisers and consultants to disclose their conflicts of interests with creditors to whom Puerto Rico owes money. PRRADA would close this loophole in PROMESA that negatively impacts the American citizens who call Puerto Rico home.
 

 
“Puerto Rico has suffered natural disasters and economic devastation from Hurricanes Irma and Maria, and during the Trump administration, it is well documented that relief for Puerto Rico was improperly withheld, inadequate, and woefully insufficient. The American citizens who call the island home are enduring a debt restructuring process that is deeply unpopular because of the painful cuts that have been forced by the Oversight Board so that the island can pay its creditors,” said Sen. Menendez. “[…] At a baseline, shouldn’t we give the people of the island access to th[e] basic level of transparency about the consultants and advisers providing input on the restructuring process, which would be done in any similar proceeding? […] To me, this is a bill that pursues fairness and equity for the people of Puerto Rico […] I appreciate the Committee’s attention to the matter today, and I hope you will act swiftly to right this injustice.” 

The Senate version of the PRRADA is cosponsored by Sens. Marco Rubio (R-Fla.), Debbie Stabenow (D-Mich.), Mazie Hirono (D-Hawaii), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), and Roger Wicker (R-Miss.). The House version led by Congresswoman Nydia Velazquez (D-N.Y.-07) was passed unanimously by the House of Representatives earlier this year.

Below is a copy of Senator Menendez’s remarks as prepared for delivery:
Thank you Chairman Manchin, Ranking Member Barrasso, and members of the Committee for holding this hearing on the Puerto Rico Recovery Accuracy in Disclosures Act of 2021, or “PRRADA.”  As the lead sponsor of PRRADA, I appreciate the opportunity to speak to you today about the urgent need to enact this bipartisan and bicameral legislation.
 
I also wish to thank my colleague Congresswoman Velázquez for her tireless advocacy for the people of Puerto Rico and her leadership on this issue, along with Senators Rubio, Hirono, Wicker, Blumenthal, Wyden, and Stabenow for their co-sponsorship.
 
PRRADA is a straightforward bill; it would simply close a loophole in existing law to ensure that advisors and consultants to Puerto Rico’s Fiscal Oversight Board follow the same transparency and disclosure practices as would be required in any other U.S. bankruptcy case.
 
As my colleagues will recall, in 2016, Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act, or “PROMESA.”  PROMESA aimed to create a standardized bankruptcy process for Puerto Rico, to allow the island to restructure its debts while meeting its obligations to creditors and maintaining services for the people of the island.  PROMESA created the Financial Oversight and Management Board, or “La Junta” as it’s known by many on the island, which currently has sweeping authority over Puerto Rico’s debt restructuring and budget.
 
Unfortunately, PROMESA did not require the Oversight Board’s advisers and consultants to disclose conflicts of interests with creditors to whom Puerto Rico owes money.  By failing to hold these advisers and consultants to the same transparency standards required on the mainland, PROMESA created yet another unjust double standard for the people of Puerto Rico. 
 
I opposed PROMESA, because I believed it would not do enough to protect the people of Puerto Rico during the debt restructuring process.  And while I like to be right, this is certainly one area where I wish I had been wrong.  In many ways, the Oversight Board has made life on the island harder and less fair for so many Puerto Ricans.
 
The legislation the Committee is considering today would address one key issue created by PROMESA. 
 
It would simply hold the cadre of vendors and consultants who have profited as a result of the law to reasonable transparency standards.
 
PRRADA would require advisors and consultants working for the Oversight Board to disclose any potential conflicts of interest, and to comply with the same robust transparency practices that are required for those providing advice to bankruptcy cases on the U.S. mainland.
 
Puerto Rico has suffered natural disasters and economic devastation from Hurricanes Irma and Maria, and during the Trump administration, it is well documented that relief for Puerto Rico was improperly withheld, inadequate, and woefully insufficient.
 
The American citizens who call the island home are enduring a debt restructuring process that is deeply unpopular because of the painful cuts that have been forced by the Oversight Board so that the island can pay its creditors.
 
Think for a moment about the combined weight of these issues: natural disaster… economic devastation... inadequate relief when they needed it most.  
 
Now, colleagues, please understand in this context, how extraordinarily unfair it is that we have a system whereby the people of Puerto Rico are footing the bill for these consultants who aren’t even required to disclose their own conflicts of interest. 
 
The Weekly Journal recently reported that “Four years after Puerto Rico filed for bankruptcy under Title III of the federal Promesa law, over $830 million in attorneys’ fees have been paid and yet the island is far from putting an end to the more than $72 billion debt-restructuring process.”
 
At a baseline, shouldn’t we give the people of the island access to this basic level of transparency about the consultants and advisers providing input on the restructuring process, which would be done in any similar proceeding? 
 
To me, this is a bill that pursues fairness and equity for the people of Puerto Rico.  Let me note that even the member of the PROMESA board testifying today is supportive of the goals of our bill. 
 
Our colleagues in the House have passed this bill not once but twice, and both times unanimously.  I appreciate the Committee’s attention to the matter today, and I hope you will act swiftly to right this injustice. 
 
Thank you again for your consideration of this vital legislation.
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