Puerto Rico News

Photo - Daily Sun/Miguel Ríos: The José de la Torre airport located at the former Roosevelt Roads base in Ceiba.

February 10, 2010: House Economic Development and Planning Committee Chairman José Chico charged Tuesday that at least $16 million in funds that were supposed to go to economically help communities affected by the closing of the now defunct U.S. Naval Base in Roosevelt Roads, did not reach their stated destination.

Chico made his remarks following testimony given to his committee Tuesday — that around $16 million that were supposed to help communities around Roosevelt Roads remain unaccounted for. The funds were earmarked during the Sila Calderón administration.

Carlos Rodríguez Rivera, executive director of the Northeastern Consortium, said that in fiscal year 2003-04, the consortium received $3 million in Rapid Response Funds from the government that were supposed to go to help displaced base workers. The consortium, which was headed at the time by current New Progressive Party Rep. Carlos Johnny Méndez, was supposed to use the entire amount by June 30, 2004 but only managed to use $1.8 million and was forced to return the rest to the Occupational Development and Human Resources Council. The whereabouts of the rest of the money is not known.

[Open link for full story from Daily Sun.]

SAN JUAN, Puerto Rico - Triple-S Management Corp., Puerto Rico's largest managed-care company, reported on Tuesday that its profit grew in the fourth quarter as membership grew in its health plans and it recorded some one-time items.

Photo - Daily Sun/Mauricio Pascual: Economist Sergio Marxuach of the Center for the New Economy

Tax cuts for everyone, as promised by Gov. Fortuño, appear to be a political no-brainer — but the question remains how the government will keep operating, even as inefficiently as some critics say, once the revenues are lowered.

Economists and others point out that in these tough economic times, if you cut taxes, you had better come up with other ways to raise revenue for the government to keep offering services.

“When the economy is in a recession, cutting taxes is a problem,” said Sergio Marxuach of the island’s Center for the New Economy. “Obviously, you have to come up with new methods of getting additional revenues … If you’re going to lower rates, you’re going to have to expand the tax base, possibly be eliminating deductions and credits.”

Jon Shure, a senior fellow at the Center on Budget and Policy Priorities, a left-of-center D.C. think tank, notes that revenues of states are plummeting as never before. If Puerto Rico’s fiscal problems can be compared to those in the states, then: “This is not the time to reduce any revenue stream. This is the time to increase them to meet growing public needs,” Shure said.

Reducing taxes in the current recession, “is like cutting off your legs so you can run faster,” Shure said.

He added: “I can’t see any scenario for any of the 35 states with fiscal problems and Puerto Rico where reducing taxes will help them out fiscally or meet the needs of their people.”

[Open link for full report.]

SAN JUAN, Puerto Rico - Lenders have assumed ownership of a stalled luxury resort in Anguilla that has the tiny tourism-dependent island's only golf course and was codeveloped by a U.S. media mogul, officials said Monday.

The Fortuño administration has harped consistently that it needs the private sector to help Puerto Rico get its economy rolling, and if it can attract investors on a global scale, so much the better. But are big investors being heard when they come knocking on Puerto Rico’s business door?

No, according to a case that has come to the attention of the Daily Sun.

It turns out the deadline for a large U.S. company is up this week for a proposed jet facility on the island. Yet, there is no feedback in sight regarding whether the government is at all interested in the proposal.

The corporation thinks this procrastination could mean Puerto Rico will be losing $6 billion in investments and that some 2,000 related jobs will go down the chute.

The encroaching deadline means that the firm, RGIV Limited, might be forced to choose another location in the Caribbean or the U.S. When fully established, the facility could employ some 2,000 aerospace-related workers with higher than average entry-level salaries — possibly in the $35,000-$45,000 range, according to the corporate proposal.

RGIV Limited, based in Houston, Texas, proposes to place the jet facility in the contiguous United States, Puerto Rico, the U.S. Virgin Islands or another Caribbean country seriously willing to become a true strategic partner by putting real money into real a manufacturing industry, thus creating real opportunities and driving real economic growth.

The goal is for the Federal Aviation Administration to have direct authority over the manufacturing and flight certification processes related to the aircraft being delivered, with the first test flights of the new series of the jets being carried out not later than January 2012 — or approximately 24 months from funding — a deadline that is now threatened by delays in achieving formal negotiations with Puerto Rico leaders.

The key step now is for Gov. Fortuño to become actively involved and engaged in the process before another opportunity passes Puerto Rico by, the firm has stated.

RGIV Limited is also saying the corporation has been approached by other potential sites and must come to a decision soon.

At present, the company has decided its planes will be flying in 2012 from the Caribbean, provided the funding and contractual terms are established in a timely fashion.

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I have always embraced the concept that God is Love and Compassion for all his creations. On February 1, 2010, I submitted to the Puerto Rico Daily Sun the following Perspective: "A connection between the drinking doctors and our homphobic leaders?" It was published yesterday, February 7, 2010, in the Daily Sun's VOICES section. In today's New York Times, February 8, there is an outstanding commentary: " Have Faith in Love - By ERIC LAX - The New York Times - Every bit of Christian teaching can be summed up in three words: God is love. That is the simple truth that teaches tolerance of same-sex unions." This commentary is in agreement with my idea of "God Is Love." The visual of two in love behind the heart appeared with the NYT's commentary. Excerpts from the NYT commentary is posted as Comment #1 in this this thread's topic forum for comments. -- Upfront Yankee - Robert McCarroll

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A connection between the drinking doctors and our homophobic leaders? - VOICES / Puerto Rico Daily Sun - 08/02/10

Is there a connection between the drinking doctors and our homophobic leaders?

Individuals commenting on the videos criticized the doctors, while others urged the public to stop shattering Puerto Rico’s image.”Everyone needs to wind down and relax after work.... Focus on the positive,” one person said. -- Quoted from: “P.R. doctor’s scandal spawn You Tube mock videos” (Daily Sun - Feb 1).

How could any doctor or other medical professional be among these suffering Haitians and want to party? Worse yet, find “having fun” in this terrible human tragedy? Does this same kind of mentality make it possible for some Puerto Rican leaders to say that gay Steven, who was stabbed, decapitated, cut up into pieces and burned, deserved what he got?

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SAN JUAN, Puerto Rico, Feb. 2 -- /PRNewswire/ -- FROM: Jaime Lopez-Diaz Statement Regarding Vieques February 2, 2010 In light of the recent CNN news piece regarding the Puerto Rican island of Vieques, the Puerto Rico Tourism Company wishes to respond to any concerns about visiting the island.

Visual: Front page today's Puerto Rico Daily Sun

Former Gov. Sila Calderón denounced as a “tragedy” on Saturday Gov. Fortuño’s proposal to repeal the law creating the Special Communities Office and transfer its responsibilities to an advocacy office.

“The proposed repealing of Law 1 of 2001, which creates the Special Communities Program, is a tragedy that should make the people of Puerto Rico indignant,” Calderón said.

“In hiding, in haste, without consulting those affected, and under the excuse of the restructuring of the executive branch, they are erasing with a single stroke what has been one of the biggest achievements of the poor in our country,” said the former governor, who considers the $1 billion program the key initiative of her administration.

Calderón said the concept of an advocate office is contrary to that of the special communities, which provides for the empowerment of those in greater need in Puerto Rico.

More than 45 percent of Puerto Ricans live under the federal poverty level, according to official statistics.

“Almost half of our population is protected by this law [Law 1],” the former Popular Democratic Party governor, as she called for community leaders to express their opposition to the repealing the program through individual and group actions.

Calderón noted that the purpose of the special communities’ project is to eliminate the “culture of dependency” that affects not only those who suffer it, but Puerto Rico as a whole.

“It seeks to get the residents in disadvantaged communities to stand up and take their own responsibility,” Calderón said.

[Open link for full report and related story.]

Details of Jorge Steven Lopez Mercado's alleged cocaine use and prostitution have emerged during the preliminary hearing of the man who allegedly decapitated and dismembered him last November.

Photo - Daily Sun/César Silva: Veterans Advocate Jorge L. Mas Marrero

The Citizen's Ombudsman, the Veterans' Advocate and the Advocate for the Physically Disabled objected Friday to the La Fortaleza measure that would consolidate the advocacy offices, contending that it will water down services to the people, strip them of their independence to supervise the actions of agencies, and put at risk federal funds.

"We know the government is seeking savings in operations but it should not be in detriment to sectors of society that have been traditionally victimized. The state has the obligation of ensuring they get the best service," Veterans Advocate Jorge L. Mas Marrero said.

The proposed measure will create the Advocacy Offices Administration which will serve as support to the different offices, some of which will be transformed into other entities.

Government Committee Chairman Carlos Méndez said the bill will be substantially changed, transferring all of the advocacy offices to the legislative branch and eliminating the Advocacy Offices Administrator that would be created by the bill.

"We do not want any hybrid thing...We can be together but separate," he said.

The Citizen Ombudsman is part of the legislative branch but the proposal would transfer it to the control of the executive branch. Critics say this is a conflict of interest since the entity is suppose to oversee or monitor the actions of agencies.

"Any fusion, integration, restructuring, or combination of our agency with any other or any alteration to our administrative processes could result in a violation of the non-interference clause and our obligation to provide services with the result that we will lose up to two million in federal funds," said José Raul Ocasio, the Ombudsman for the Physically Disabled.

[Open link for full report.]

Photo: As Democrats, Pedro Pierluisi, Luis Fortuño and Kenneth McClintock sang in harmony as a trio FDR's "Happy Day Are Here Again."

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Fortuño and Pierluisi hope that a House victory will provide momentum for them to start lobbying the Senate to support the Puerto Rico Democracy Act on political status. Pierluisi aims to find ten veteran senators — six Democrats and four Republicans, particularly those with large Puerto Rican constituencies — to co-sponsor the bill.

Sen. John Thune, R-S.D., the chairman of the Senate Republican Policy Committee, and Sen. John Cornyn, R-Texas, the chairman of the National Republican Senatorial Committee, both said they were familiar with Republican Fortuño from his four years in the House of Representatives. But even though the two senators have been actively involved in GOP outreach to Hispanics, they stopped short of saying where they would come down on the Puerto Rico Democracy Act and were even unsure about how to talk about it.

I hope the "Party of No" will not also play its political games even with the urgent need for Puerto Rico to have self-determination about it political status. Don't these elephants have any shame?

I had a dream the other night that Republican Luis Fortuño resigned from the Republican Party and became a proud "Yes" Democrat. He went to Washington and gave both the Republicans and the Democrat Blue Dog Coalition hell -- in Harry S Truman style -- for how they mistreated Puerto Rico.

Immediately, the White House and the United States Congress listened to Fortuño and included Puerto Rico fully in the national Health Care Reform program. Washington political leaders started immediately treating all Puerto Ricans residing on the Enchanted Island as first class citizens. Washington decided to put Puerto Rico on a fast track for self determination. Immediately, off-shore companies found reasons to feel safe in investing long term in Puerto Rico. Secretary of State McClintock had to increase his staff to assist the flood of investors on the island. The Secretary of State was delighted and kept calling the Governor Fortuño to let him know that another blue-chip company is investing in Puerto Rico.

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Friday, February 5, 2010 at 4:27 p.m. MARGARITA ISLAND, Venezuela - Leones del Escogido of the Dominican Republic lost their first game in the Caribbean Series, falling 7-3 to Puerto Rico's Los Indios de Mayaguez on Friday.

Photo: Puerto Rico Gov. Luis Fortuno announced the call-up of National Guard soldiers to help fight crime.

(CNN) -- About 1,000 National Guard soldiers will report for duty Saturday in Puerto Rico, activated by the governor this week to help fight a drug-fueled crime tsunami that has flooded the Caribbean island.

The military personnel will repair police cruisers and join local authorities on patrols in the most crime-ridden areas of Puerto Rico, mainly in poor parts of the commonwealth's largest cities. One soldier will accompany a police officer on each patrol, said the National Guard chief, Maj. Gen. Antonio Vicens.

"The problem that exists now is that the police are short of personnel," Vicens said. "What we are going to do solely is to help them. First, we are going to help them with mechanics, provide them with more than 100 mechanics so that their fleet of patrol cars can go out on the street. Once we have that, we are going to have joint preventive patrols.

"You won't see military vehicles on the street. What you'll see are police patrols on the street."

The soldiers will be deployed in San Juan, the territory's capital, and the cities of Carolina, Bayamon and Ponce.

In a separate development, Fortuno announced Tuesday that U.S. Attorney Rosa Emilia Rodriguez Velez had reached an agreement with the U.S. Justice Department and the Puerto Rican Police Department for the federal agency to have jurisdiction over a series of major crimes. Puerto Rico is an unincorporated territory of the United States and more stringent federal U.S. laws can apply.

"To those who commit carjackings," Fortuno said, "to those who provoke shootouts on our roads ... to sexual offenders who rob our children of our innocence, our message is clear: We're going to impose on them the full weight of the federal law. We're going to look for them, and we're going to bring them to justice."

[Open link for full CNN.com report.]

Published by Matthias Jaime on February 5, 2010 10:00 AM | Permalink | Comments (0) THE CAPTAIN WAS HERE: On Thursday, ProPublica published a fantastic story about the role lobbying is taking in the world of rum and tax breaks. The article focuses on alcohol producer Diageo, known for its popular labels Dom Pérignon and Captain Morgan, who is at a center of a fight between Puerto Rico and the Virgin Islands. According to ProPublica, the two principalities rely heavily on revenues from taxing alcohol produced off the continental United States. But recently, the Virgin Islands has been able to lure Diageo over to its borders by offering very generous tax incentives. Needless to say, Puerto Rico, which received approximately $400 million from taxing Diageo alone, is fighting hard to prohibit the move. What is most striking about this story though is the overwhelming reliance all the actors in this story have on federal lobbying. Our analysis of their lobbying efforts show that Puerto Rico has spent over $1 million in 2009 and the Virgin Islands has spent nearly the same amount. In the end, ProPublica speculates Diageo's move will continue despite Puerto Rico's protests. Who knew there could be such a contentious debate where rum and island paradises are involved?

[Open this link and the sub-link to ProPublica. In an earlier posting, there is mentioned by Upfront Yankee about a suspicion that the Puerto Rico government and/or the New Progress Party planted this posting as an objective, unbias news report. Upfront Yankee could be completely wrong to suspect this. See earlier Topix posting.]

Photo-AP/Cliff Owen: Senate Finance Committee Chairman Sen. Max Baucus, D-Mont.

WASHINGTON: U.S. Virgin Islands Gov. John J. deJongh told Senate Finance Committee leaders Thursday that the Congressional Research Service has dealt a “serious blow” to Puerto Rico’s arguments in the battle of the two territories over rum and taxes.

In a letter to Finance Chairman Max Baucus, D-Mont., and ranking member Charles Grassley, R-Ind., DeJongh said the report, issued on Jan. 20, “refutes misinformation promoted by Puerto Rican officials and validates the USVI’s economic development agreements with rum makers Diageo and Fortune Brands.”

He pointed out that the CRS found that according to the law’s original intent, the USVI can use its rum cover-over revenue as its local legislature deems appropriate, and that a bill proposed by Resident Commissioner Pedro Pierluisi “would limit both territories’ autonomous power to allocate cover-over funds for economic development purposes.”

The USVI governor also asserted that excise taxes returned to the territories on rum sold in the states under the program are paid by the rum producers, not by American taxpayers.

In its report, the CRS was critical of Pierluisi’s bill that would limit to 10 per cent the subsidies that the U.S. Virgin Islands, as well as Puerto Rico, could give rum producers from federal taxes on rum sold in the states.

The CRS said the resident commissioner’s attempt to limit the subsidies “could be seen as inconsistent with the intent of the [rum] cover-over as expressed in the legislation…Congress explicitly stated that the government receiving the covered-over revenue was charged with its disposition, not the U.S. Congress.”

[Open link for full and related stories in Daily Sun.]

A friend of mine in P.R. sent me the following fun facts about his country. Pretty intersting read about the small Island Walmart in Carolina, Puerto Rico broke the selling records of all Walmart stores .

Photo - Daily Sun/Humberto Trías: During his State of the Commonwealth address on Monday, Gov. Fortuño said his administration had managed to "put the house in order" during the last year, sparing the island's credit rating, among other things.

Puerto Rico Daily Sun/Feb. 3: Stateside analysts from Morgan Stanley Smith Barney are not buying Gov. Fortuño’s claim the Puerto Rico government “has put its house in order” and are warning their investors to stay away from all Puerto Rican investments.

Regardless of whether the island keeps its current credit rating — one step above junk — The Economist magazine and some international financiers are predicting a surging crisis in U.S. and European bond markets that also would make it harder for Puerto Rico to access funds to finance public works.

In a November 2009 investors’ report, Morgan Stanley Smith Barney LLV analysts strongly suggested “avoiding the obvious risk in Puerto Rican financial assets at this time, and focusing on other tax-exempt alternatives with considerably less risk elsewhere. The Estate Tax consequences of this recommendation for Puerto Rico-born and resident investors can be corrected inexpensively with adequate tax planning.”

“The total outstanding debt of the Commonwealth of Puerto Rico is approximately $47 billion while the current fiscal deficit allegedly exceeds $3.2 billion. In my opinion, the ‘drama’ of the recent job cuts by the current administration obscures the risk of a larger calamity. The recent elimination of 22,500 governmental jobs is a palliative to a complicated situation, i.e., the financing of the current account deficit with long-term debt in an economy that is hemorrhaging jobs in all economic sectors and doesn’t produce much of anything nor exploit its natural resources effectively,” the Morgan Stanley Smith Barney report states. “It is likely that the cumulative impact of these job losses on an already diminished tax base will ultimately arrest the otherwise laudable efforts of the current administration to reverse the downward spiral of the Puerto Rican economy.”

The savings from the job cuts after subtracting the tax income lost on those salaries is a “paltry $305 million or 9.5 percent of the current deficit...

[Open link for full report.]

Photos: Delegate Donna Christensen - Gov. John de Jongh, Jr. - U.S. Virgin Islands

A bill in Congress to cap the portion of rum cover-over revenues spent to subsidize the industry "could be seen as inconsistent with the intent of the cover-over," according to a recent congressional study.

The study, performed by the Congressional Research Service (CRS), Congress's in-house research arm, also said the bill would severely limit both territories' ability to finance economic development projects with rum cover-over revenues. At the same time, the CRS study's final conclusion bears cause for concern about the future of the rum cover-over program.

The bill, submitted by Puerto Rican Commissioner Pedro Pierluisi, would prevent the U.S. Virgin Islands from using more than 10 percent of the cover-over funds to directly support the industry. It would divert the territory's cover-over money to Puerto Rico if more than 10 percent is directed to the industry.

Delegate Donna Christensen and Gov. John deJongh Jr. both heralded the study as vindication of the territory's agreements with Diageo to build a Captain Morgan rum distillery on St. Croix, and as a blow to the restrictive bill.

The bill “undermines the intent of the Congress when they designed the program for the territories,” Christensen said in a statement. “As the report clearly states, Congress did not outline specific uses for cover-over revenue, but it recommends that it be used to stimulate and increase business activity.”

[Open link for full story.]

Puerto Rico's governor is activating the National Guard to battle crime in the U.S. territory.

Photo/Daily Sun/Humberto Trías: Gov. Fortuño greets House Speaker Jennifer Gonazález and Senate President Thomas Rivera Schatz upon arriving at the Capitol Monday.

The Commonwealth’s top priority this year will be increasing island residents’ economic and physical security, with a special focus on improving the finances and quality of life of the island’s overwrought middle-class, Gov. Fortuño said during his State of the Commonwealth address Monday evening.

Without revealing details, Fortuño promised to pass across-the-board tax cuts to corporations and individuals, as well as a law for a referendum to reduce the number of lawmakers by year’s end in compliance with his campaign promise for Legislative reform.

Other promises included passing legislation to provide health care to the some 400,000 island residents who do not qualify for the government’s health reform, but who cannot afford a private health plan, regardless of whether Puerto Rico is included in the U.S. health reform program; and cutting down corruption at the Education Department that prevents the lion’s share of the agency’s $3 billion-plus budget from reaching public classrooms.

“I want to reward work, while so many times in the past governments have punished those who are productive,” Fortuño said. “You of the middle class deserve to keep more of that check you earn with your own sweat. You deserve for us to reduce taxes and I guarantee that I am going to do it!”

Fortuño’s list of priorities continues to include spurring economic growth and saving jobs, the governor said, while referring to the past year’s successes — saving Puerto Rico’s credit in the face of a $3.2 billion deficit, launching a $500 million Creole economic stimulus plan, passing new permitting and closing laws, legislation to foster tourism and Public Private Partnerships, among others.

“We all — New Progressive Party and Popular Democratic Party members — must be proud of these achievements…We saved the good name and credit of Puerto Rico — which literally means we saved the homes, savings and jobs of hundreds of thousands of Puerto Ricans,” Fortuño said.

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