Hearing on UCC Document Request

On June 18, 2018, Magistrate Judge Dein presided over a hearing regarding a request by the UCC on documents currently held by the Oversight Board and their independent investigator, Kobre & Kim.  AAFAF informed that it had handed over all of the GDB’s non-privileged documents to the court and that by Wednesday a privileged log would be made public barring any problem in signing the Non-Disclosure Agreement with the UCC.

Kobre & Kim stated that it had shared the term searches with the UCC used with Banco Santander, Banco Popular Puerto Rico and the GDB. All third parties have denied the investigator the permission to share the documents with the UCC. Hence, it has not shared with the UCC search terms or identity of document custodians.

Kobre & Kim said that it wants to deposit all documents in a room and then have any interested party petition to see them. Those who oppose this, will have the right to do so. The Board’s investigator will file his exit plan by July 3 but before doing so they will meet and consult with the UCC and the Retiree Committee, and reaffirmed the report will be complete by August 15.

The UCC explained that Kobre & Kim had only shared the documents it was provided. In the case of the GDB, certain search terms resulted in over 100,000 documents, but decided to have copies total slightly over 5,000 pages. Judge Dein said she did not want the UCC reviewing those documents given the volume. The UCC said the parties would work something out. The UCC also claimed that the GDB waived its privilege when it gave the Board’s investigator the documents.

Moreover, and interestingly, the UCC said that the stumbling block on the NDA was AAFAF’s claim that it wanted to retain those documents that could cause harm to elected officials.

At this time, AAFAF insisted that there were no documents that fell into that category but that it would be appropriate to have the fiscal agency prove its right to do so if the issue was raised. Judge Dein, quite correctly, said she was not going to rule on documents that did not exist.  She further noted she will reserve this right in the NDA if the documents do come up then she will give her ruling. AAFAF also raised the issue that many of the documents that were produced to the Board pursuant to PROMESA section 104(c) were documents pursuant to a particular federal law, which the UCC did not necessarily have access to, since the power of the Board to get the documents was broader than a subpoena.

The issue of AAFAF claiming a right to reserve documents that could cause harm to elected officials flies in the face of all of Puerto Rico’s case law regarding the public’s access to government documents. It behooves the mind to hear this and makes you wonder what AAFAF is hiding. Maybe AAFAF is protecting 3 board members – Caco Garcia, Jose Ramon Gonzalez and Jose Carrion – and Mr. Portela himself, all of which have tricky connections to the debt. I can’t see how, if AAFAF claims to do this, the Court would allow it. Guess we will have to wait and see.

As to the Board’s power under section 104(c)(2), which is the one applicable to the Government of Puerto Rico, it states:



Notwithstanding any other provision of law, the Oversight Board shall have the right to secure copies, whether written or electronic, of such records, documents, information, data, or metadata from the territorial government necessary to enable the Oversight Board to carry out its responsibilities under this Act. At the request of the Oversight Board, the Oversight Board shall be granted direct access to such information systems, records, documents, information, or data as will enable the Oversight Board to carry out its responsibilities under this Act. The head of the entity of the territorial government responsible shall provide the Oversight Board with such information and assistance (including granting the Oversight Board direct access to automated or other information systems) as the Oversight Board requires under this paragraph.

Does this mean that the Government of Puerto Rico could not invoke any privilege against the Board? Was any privilege invoked against the Board? Questions, questions. In fairness, AAFAF does have a point, depending on how these questions are answered. Again, we need to wait and see what happens.