Following up on my Antonio Weiss post, Pedro Pierluisi is another name that most observers of the Puerto Rico debt situation over the last couple of years will be familiar with and, like Weiss, many will probably be surprised to hear that Pierluisi is actively lobbying for a role with the board either as an appointee or as the board’s executive director.
Pierluisi is, of course, the outgoing resident commissioner who ran unsuccessfully for his party’s nomination for governor earlier this year. After his own Chapter 9 legislation failed in the House last year, Pierluisi became, along with Governor Garcia Padilla and Weiss, one of the most visible proponents of the PROMESA legislation over the last several months – testifying in multiple hearings, and acting as a key player behind the scenes during the drafting process.
Prior to political life, Pierluisi practiced for 24 years as an attorney, serving as Attorney General of Puerto Rico from 1993-1996, in between stints in the private sector. Given his role in advancing PROMESA, which saw him fight fiercely with some stakeholders, while forming alliances with others, a role on the board, as a consultant to the board, or as executive director seems misguided.
Further, many Puerto Ricans who oppose the board hold Pierluisi responsible for its strength and, regardless of whether those people are correct, his involvement in any capacity would be nothing but divisive on the island.
Even more problematic is his wife’s work as a financial advisor to Wall Street companies, some of which hold PR bonds. This, of course, is a major conflict that should rule Pierluisi out immediately from any involvement in the board.
Additionally, as far as a board seat is concerned, I am of the view that Pierluisi is not even eligible, and that his appointment would be a clear violation of PROMESA, which holds that current and former territorial elected officials are barred from participating. This is intended to make sure that the board is entirely non-political at a local level, which is a key component of the board’s mission. Some have argued that, because Pierluisi served in Congress, he may not be considered a “territorial” official. But that is mere semantics – Pierluisi served the people of PR, was elected by PR voters, and is a member of a PR political party. Whether or not you subscribe to this loophole, it is clear that his appointment would be a violation of the spirit of this rule. In my view, having missed out on the governorship, this is just Pierluisi looking to continue his rule over PR from another avenue.
Verdict:
Red Flag – Pedro Pierluisi has major conflicts of interest through his wife’s financial advisory work that should rule him out from any involvement with the board. His involvement in any capacity would be hugely divisive in Puerto Rico and his role in the politics leading up to the board’s creation would raise questions over his independence. Further, his appointment would undermine the apolitical nature of the board and is a clear violation of PROMESA, as he is a former territorial elected official.
