The real reasons Congress cannot solve the Puerto Rico financial crisis

Published on May 18, 2016    By Richard Lawless

There are a number of very good reasons that Congress cannot reach agreement on a Puerto Rico solution:

1. There is growing evidence that many of the bond losses in Puerto Rico were due to criminal fraud.

2. There is growing evidence that Treasury Department officials may have participated in the bond fraud.

3. The “crisis” may have been manufactured in large part by the administration.

4. It is becoming evident that the real victims of the Puerto Rico crisis are America’s senior citizens throughout the 50 states.

5. In an election year, politicians don’t want to get caught throwing their constituents under the bus to protect those responsible on Wall Street.

Richard Lawless is a former senior banker who has specialized in evaluating and granting debt for over 25 years. He has a Master’s Degree in Finance from the University of San Diego and Bachelor’s Degree from Pepperdine University. He sits on a number of Corporate Boards and actively writes for a number of finance publications.

Over the past few months, the Puerto Rico Senate has held special committee hearings involving the financial collapse of their largest utility company (PREPA). Sworn testimony indicated that the utility, the ratings companies and Wall Street’s biggest banks knew the utility was bankrupt as early as 2010.

However, for the right fees, a good credit rating could be purchased and these unpayable bonds could be sold to unsuspecting investors as safe retirement income.

The Senate turned over all the evidence to the FBI last week. There are strong indications this alleged criminal conspiracy is not limited to just the $10 billion in utility bonds. The SEC has been auditing the utility and will be out with their findings in 15-45 days.

Treasury Secretary Jack Lew was the chief operating officer of Citibank from 2006-2008 and was one of the first banks to sell these bonds. His unconfirmed assistants Antonio Weiss (counsel) and Stephen Campbell (counsel) then resold these junk bonds before joining Secretary Lew at the Treasury Department. 

Rumors in Washington, supported by the activities of key Capitol Hill personnel, suggest that Rahm Emanuel (Chicago mayor) saw the pending Puerto Rico financial crisis as a way to pass legislation that would allow cities like Chicago to default on their unpayable bond debt.

Chuck Schumer, Elizabeth Warren, Harry Reid, Nancy Pelosi, Richard Blumenthal and Treasury Secretary Lew got together to make sure that legislation originates in Puerto Rico.

It was decided that the treasury secretary would lead the effort. Treasury employees recommended Puerto Rico start missing payments to create a crisis so this legislation could rapidly be passed through Congress. They would float stories with the press about a humanitarian crisis in Puerto Rico if they get resistance in Congress and, although Puerto Rico has more cash on hand than they have had in decades, Puerto Rico would withhold basic services to help support this “crisis mentality”. The non-payment of the bond debt has left the island with a load of cash.

Puerto Rico issued approximately $70 billion dollars in bond debt. Island residents absorbed approximately 20% of that debt, leaving the remaining $56 billion dollars to be purchased by American investors throughout the 50 states. As this “crisis” progressed, many of the retired Americans that bought these bonds to supplement their income sold the bonds at a 50% loss. Many still hold the bonds.

All this information has been shared with our 435 congressman and 100 senators. In addition, reports were filed with the congressional and senatorial finance, judiciary and ethics committees. The FBI and SEC have also been making reports to Congress.

Unfortunately, Congress will not turn on their Wall Street benefactors. Even if this is all proven to be true, much like the 2007-2008 CMBS/CDO financial crisis that lost trillions, no one will be held accountable.

http://www.caribbeannewsnow.com/headline-Commentary:-The-real-reasons-Congress-cannot-solve-the-Puerto-Rico-financial-crisis-30434.html

Lea Sobre AGaPoCrisis y las 20 Razones No Quiere Resolverla – https://estado51prusa.com/?p=62205
Lea Sobre la Junta de Control Fiscal – https://estado51prusa.com/?s=Junta+Control+Fiscal&x=13&y=4