White House backing Puerto Rico’s oversight board: WSJ

WASHINGTON (Reuters) – The White House is preparing to ask the U.S. Senate to confirm the current members of Puerto Rico’s fiscal oversight board, the Wall Street Journal reported on Thursday, citing people familiar with the matter.

In a move that would disappoint critics of the island’s financial supervisors, the Journal said, the Trump administration had begun the process of putting the board’s seven voting members up for a Senate vote.

Matthias Rieker, the board’s strategic adviser, said the board had no comment on the report.

A Feb. 15 ruling by the 1st U.S. Circuit Court of Appeals found the board had been unconstitutionally appointed because its members are principal U.S. officers and should have been selected by the president “with the advice and consent of the Senate.”

The board, which was created under a 2016 federal law known as PROMESA, has yet to file an appeal of the ruling with the U.S. Supreme Court, Rieker said. The appeals court gave the president and Senate 90 days to constitutionally validate the appointments or reconstitute the board, which had been seeking to put that deadline on hold.

The lawsuit over the board members, which was filed by creditors of the U.S. commonwealth, including Aurelius Investment LLC and bond insurer Assured Guaranty Corp, also sought a dismissal of Puerto Rico’s Title III bankruptcy cases – a move the appeals court rejected.

Puerto Rico filed a form of bankruptcy in 2017 seeking to restructure about $120 billion of debt and pension obligations.

Reporting by Tim Ahmann in Washington and Karen Pierog in Chicago; Writing by Mohammad Zargham; Editing by Tom Brown and Peter Cooney

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source: reuters.com