Red Alert: Ex-Officio Control Board Member Richard Ravitch Resigns from BAM Director Position Because of Conflict

As has been reported in the media, Governor Garcia Padilla has announced that Richard Ravitch will be his representative as “ex-officio” member of the control board.

This is a move baffling for several reasons, not least of which is Governor Garcia Padilla’s choice of a non-Puerto Rican to represent the Governor of Puerto Rico on the board. But the biggest problem, as I have noted on more than one occasion, are the deep and well documented conflicts of interest that Ravitch has through his role as an adviser to the Garcia Padilla Administration.

He also faced a significant conflict as a member of the board of directors of a bond insurance company, Build America Mutual, which stands to gain from the demise of their competitors that have insured Puerto Rican bonds. No doubt anticipating outcry over this conflict, Ravitch resigned from this board seat yesterday, but this does not ultimately change my opinion that he is a counterproductive board appointment.

Given Ravitch’s clear conflicts of interest, it is difficult to view this appointment as anything other than purposefully antagonistic to creditors.  It also reflects governor’s profound lack of seriousness in solving our crisis and returning the island to growth.