Puerto Rico’s Controversial Ruling Board an ‘Entity That No One Can Control’

The U.S. Supreme Court is unwilling to confront or consider removing Puerto Rico’s ruling board put in place by Congress in a hearing on Tuesday. Part of the reason why the highest court in the country is unwilling is because it would “undermine” the United States’ rule in other territories, according to Deputy Solicitor General Jeffrey B. Wall.

Put in place by Congress in order to help the territory out of bankruptcy, the Financial Oversight and Management Board has faced backlash over the way the board members were appointed. But Wall told Justice Brett M. Kavanaugh that questioning the constitutional power of the board could have repercussions for dealings that the U.S. government has in other places, like Washington, D.C.

The challenge to the Financial Oversight and Management Board came from bondholders led by Aurelius Investment LLC and a public employees union, according to the Post. They are challenging how the board was set up by Congress in 2016. Seven members were chosen by former President Barack Obama and only one, the eighth, was chosen by the Puerto Rican government.

“It seems to me that your very argument that it’s independent is suggesting it can’t belong to the territory and that there’s a serious problem that the federal government is creating an entity that no one can control,” Justice Sonia Sotomayor, whose parents moved from Puerto Rico to New York before she was born, told Donald B. Verrilli Jr., solicitor general under Obama. “Neither Congress nor the president can remove this entity for anything but cause.”

Verrilli represents the oversight board in the case.

Wall told Kavanaugh that going through with the challenge to the Financial Oversight and Management Board would “threaten to undermine, indeed I think it would condemn in its entirety, home rule.”

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But the challengers to the board say that when the Financial Oversight and Management Board started working in Puerto Rico, they were acting outside of the Constitution and yet are officers of the United States and need Senate confirmation, which they do not yet have.

Read the full court transcript here.


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