Examples of Puerto Rican unprofessionalism – making it hard to do business in Puerto Rico, wasting time, not listing store hours, locations correctly. For ease of doing business, Puerto Rico ranks 64th vs the mainland USA at 8th

Puerto Rico ranks 64th in the world in ease of doing business, while the 50 states rank 8th.  New Zealand ranks #1 as the best.   While the education system in Puerto Rico is notoriously bad in the public schools from K-12, it only takes common sense to know that you should list your store hours on both your website and storefront, to make it easier for consumers.  This page will be used to highlight examples of typical Puerto Rican unprofessionalism.  By shining a light on this issue, we hope to motivate Puerto Rican organizations to improve, to do better.  A well-managed operation and culture would list store hours for all locations to make it easy to do business, not difficult.  A well-managed operation and culture would list the address number prominently on the front of the building.  Puerto Rico had a marketing slogan, “Puerto Rico does it better.”  Does what better?  Let’s see how long the featured organizations take to fix the problems after we highlight them!



In the last 13 years, Puerto Rico’s ranking has become far worse, from 22 in 2006 to 64 in 2019.

Jurisdiction 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006
 United States 
8 6 8 7 7 4 4 4 5 4 3 3 3 3 3
 Puerto Rico 
64 64 55 57 47 40 41 43 47 35 35 28 19 22

Here is a list of the top 10 in the world.  What do these 10 countries have in common?

Classification Jurisdiction 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006
Very Easy  New Zealand 1 1 1 2 2 3 3 3 3 2 2 2 2 1
Very Easy  Singapore 2 2 2 1 1 1 1 1 1 1 1 1 1 2
Very Easy  Denmark 3 3 3 3 4 5 5 5 6 6 5 5 7 8
Very Easy  Hong Kong 4 5 4 5 3 2 2 2 2 3 4 4 5 7
Very Easy  South Korea 5 4 5 4 5 7 8 8 16 19 23 30 23 27
Very Easy  Georgia 6 9 16 24 15 8 9 16 12 11 15 18 37 100
Very Easy  Norway 7 8 6 9 6 9 6 6 8 10 10 11 9 5
Very Easy  United States 8 6 8 7 7 4 4 4 5 4 3 3 3 3
Very Easy  United Kingdom 9 7 7 6 8 10 7 7 4 5 6 6 6 9
Very Easy  Macedonia 10 11 10 12 30 25 23 22 38 32 71 75 92 81

What can you do to help the world become a better place?  When a store doesn’t list the hours on their storefront and on their website, complain while at the store to the manager.  When viewing the website and it doesn’t have hours listed, call the store to complain, send an email to complain!  Use your voice to educate the uneducated, the unprofessional.

The best, most professionally managed entities list all store locations, store hours, and a visual map, making it easy for customers to shop with them.  A store location map is especially useful in PR since the addressing system uses an antiquated, backward system with kilometer markings instead of the easier to use numerical system like 123 Main St as found in the states.  Furthermore, most buildings neglect to prominently display an address number on their building like they do in the states, to see if the numbers are getting smaller or larger as you go down the road, to know if you are getting close or farther away.

Know other Puerto Rican businesses or organizations with unprofessional business practices who should be featured here?  Let us know in the comments below.

Holsum Bakery Outlet stores.  2-10-19 They list the stores, but neglect to list the hours when they are open.

http://www.holsumpr.com/en/corporativo/distributionholsum bakery bread outlet store locations


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Jersey Shore Woman Shot in the Face While Vacationing in Puerto Rico – Shooter not yet caught

Good journalism helps to shine a light on problems so they get more attention, and thus get more focus and resources to be fixed.  Being shot in the face can’t be good for tourism in PR.  Problems such as violent crime, carjackings, corruption, excessive potholes in the roads, government inefficiency, being known as the welfare island, and bad customer service skills (not calling back, not emailing back) need to be improved in order for Puerto Rico to be successful.

If the Puerto Rican government doesn’t get a handle on these things, PR could become more like Cancun or Acapulco Mexico where the violent crime became so bad that tourists stopped visiting.


Jersey Shore Woman Shot in the Face While Vacationing in Puerto Rico

No arrests have been made and police continue to question people about the incident.


What to Know

  • Angelis Molina, 20, was shot in the face while with a group of people in San Juan, Puerto Rico.

  • Molina, who most recently lived in Ventnor, New Jersey, was taken to the hospital where she remains in critical condition.

  • No arrests have been made and police continue to investigate.

A Jersey Shore woman is fighting for her life after she was shot in the face while vacationing in Puerto Rico.

Angelis Molina, 20, recently lived in Ventnor, New Jersey, and worked as a waitress in Atlantic City. She traveled to Puerto Rico in mid-January and decided to stay there longer than expected after coming across a modeling opportunity.

“She found a job and she said, ‘I just want to stay here for a few months please, just to experience it a little more,’” Angelis’ mother, Michelle Molina, said. “And I tried to tell her, ‘It’s not what you think it is there. It’s dangerous.’”

On Thursday, Angelis Molina was inside an apartment with a group of people in San Juan when she was shot in the face by an unidentified gunman. She was taken to the hospital where she remains in critical condition.

“I feel like a part of me has died,” Michelle Molina said. “But I’m trying to keep faith that she’s going to be okay.”

No arrests have been made and police continue to question people about the incident. They say one man has provided varying accounts.

Angelis Molina’s father flew to Puerto Rico over the weekend and is staying with his daughter at the hospital. Meanwhile, Michelle Molina continues to pray for a miracle.

“I’m trying to put everything in God’s hands,” Michelle Molina said. “Just hope He pulls her through.”



Mother waits as Ventnor woman recovers from shooting in Puerto Rico

Angelis Molina
Angelis Molina, 20, of Ventnor, remains in critical condition after being shot in the face during her stay in San Juan, Puerto Rico.

While Angelis Molina’s father waits in a Puerto Rican hospital for her to recover from a critical gunshot wound, her mother, Michelle Molina, sends voicemails from her home in Mays Landing so he can play them for her.

Angelis Molina, a Ventnor resident who was working as a waitress in Atlantic City, had gone to San Juan, Puerto Rico, for the first time to celebrate her 20th birthday Jan. 21 with a friend. After deciding to extend her stay, she was shot in the face Jan. 31.

She is recovering from her most recent surgery, which removed one of her eyes, her mother said.

On Friday evening, Michelle Molina said she got word that her daughter’s swelling was going down.

“What a blessing,” she said.

The bullet, she said, had entered her daughter’s mouth and exited her cheek.

“It’s a tough situation as a mother because I warned her. I really did,” Michelle said. “I just did not feel good about it.”

Despite her apprehensions about Angelis’ travels, Michelle said her daughter was having a great time on her trip.

“She got down there and was having so much fun. She met these people and felt like, ‘Well, now I’m having the time of my life, I just want to stay a little bit more, even if it’s just for a few months,” Michelle said.

Her mother said Angelis had attended a festival, met new people and was even approached for restaurant and modeling jobs. But Michelle is now concerned about the kind of people her daughter encountered.

“She ended up in just not a good group of people in that time, but being young and innocent like she is, she sees the good in people. She doesn’t judge people. She put a little more faith in them than she should,” she said.

One of those new friends, Renán Colón Pujadas, gave a version of events — that the shooting took place in the course of a robbery — to police last Friday that has since been ruled out due to contradictory versions, according to PrimeraHora, which also reported that Pujadas had a history of giving false information to police in cases of theft and robbery.

Molina’s mother said she had reservations about Angelis’ new acquaintance after being sent photos of him.

“I did not know who this kid was at all, but from what she told me he was a good guy. Not someone at all that would have hurt her,” Michelle Molina said. “What he really is as a person is not good either. His whole persona is not good.

One thing her daughter said stuck out to Molina: “He is showing me the time of my life.”

The details surrounding what happened Jan. 31 are under investigation by the Puerto Rico Police Department, the department confirmed Tuesday through an interpreter.

“There’s been so many different accounts from the people that were involved that the police are trying to put their finger on what exactly is the truth,” Michelle said.

Angelis’ father, who works as a driver for UPS, flew down Sunday and plans to stay there as long as he can.

While she continues to wait on more information from police and medical professionals, Michelle said she is overwhelmed by community support. A group of girls who went to high school with Angelis created a GoFundMe page to help pay for medical bills Michelle Molina said she hasn’t even had the time to think about. As of Thursday, $1,590 had been raised toward a $5,000 goal.

She said this is characteristic of the kind of effect her daughter has had on others.

“You have no idea just how many people love you,” she tells her daughter in her voicemail messages. “The outpouring is amazing.”

Contact: 609-272-7239 aauble@pressofac.com Twitter @AublePressofAC

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Democratic Socialist Alexandria Ocasio-Cortez, with a Puerto Rican mother, trained under Socialist Bernie Sanders, wants to bring more Socialism to the United States and Puerto Rico. Why is that horrible? Hear it from Venezuelans who suffered from Democratic Socialism when implemented in their country.



VIDEO: Venezuelan socialism victims send message to American socialists
  • Campus Reform’s Cabot Phillips attended a protest with victims of Venezuelan socialism.
  • Attendees seemed to overwhelmingly agree on one thing: Don’t do it.

This month, the eyes of the world have been on Venezuela, where millions have protested in opposition of the socialist leader Nicolas Maduro.

At this week’s State of the Union address, President Donald Trump offered a stinging critique of Maduro, as well as a warning to those wanting socialism in the United States, saying, “Tonight, we renew our resolve that America will never be a socialist country.”

“people are eating from trash cans in the streets, so how has socialism helped?”

As Campus Reform has repeatedly reported, the popularity of socialism has been on the rise, especially among college students.

According to Gallup, the majority of Democrats view socialism more favorably than Capitalism.

Wanting to know if the people who support socialism had ever heard from people who’ve suffered under it, Campus Reform‘s Cabot Phillips headed to a Venezuelan Freedom rally in Washington, D.C.

It soon became abundantly clear that the Venezuelans in attendance were horrified by the idea of bringing socialism to the United States.

Asking them, “What is your message to those who want socialism here,” the attendees were in agreement: don’t do it.

“You do not ever want anything close to socialism,” one attendee said, while another added, “people are eating from trash cans in the streets, so how has socialism helped?”

Another attendee, whose family is still in Venezuela, said, “No Venezuelan can like socialism, because we’ve seen it put in place very well.”

What else did they have to say? Watch the full video:

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Who’s Afraid of Socialism?

It’s never a good system to punish the hard-working, the responsible, those who save money for the future, while rewarding the lazy, the irresponsible, and those who fail to save for the future.  Doing so discourages the better behavior while encouraging the worse behavior.   Puerto Rico already has far too much Socialism, with approximately 1/3 of all workers employed in PR government, the highest percent of people on welfare compared to all 50 states.  Be sure to read more to educate yourself by clicking on the topics on the right side of this page.

Welcome to Right Nation readers.



Lawmakers attend President Donald Trump’s State of the Union address at the U.S. Capitol in Washington, D.C., Feb. 5.Photo: mandel ngan/Agence France-Presse/Getty Images

Now that Donald Trump has criticized the “new calls to adopt socialism in this country,” Democrats and the media are already protesting that the socialist label doesn’t apply to them. But what are they afraid of—the label or their own ideas? The biggest political story of 2019 is that Democrats are embracing policies that include government control of ever-larger chunks of the private American economy.

Merriam-Webster defines socialism as “any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”

The U.S. may not be Venezuela, but consider the Democratic agenda that is emerging from Congress and the party’s presidential contenders. You decide if the proposals meet the definition of socialism.

Medicare for All. Bernie Sanders’ plan, which has been endorsed by 16 other Senators, would replace all private health insurance in the U.S. with a federally administered single-payer health-care program. Government would decide what care to deliver, which drugs to pay for, and how much to pay doctors and hospitals. Private insurance would be banned.

As Senator Kamala Harris put it recently on CNN, “the idea is that everyone gets access to medical care, and you don’t have to go through the process of going through an insurance company, having them give you approval, going through the paperwork, all of the delay that may require. Who of us has not had that situation, where you’ve got to wait for approval, and the doctor says, well, I don’t know if your insurance company is going to cover this? Let’s eliminate all of that. Let’s move on.”

If replacing private insurance with government control isn’t socialism, what is?

The Green New Deal. This idea, endorsed by 40 House Democrats and several Democratic presidential candidates, would require that the U.S. be carbon neutral within 10 years. Non-carbon sources provide only 11% of U.S. energy today, so this would mean a complete remake of American electric power, transportation and manufacturing.

Oh, and as imagined by Rep. Alexandria Ocasio-Cortez, all of this would be planned by a Select Committee For a Green New Deal. Soviet five-year plans were more modest.

A guaranteed government job for all. To assist in this 10-year transformation of society, the Green New Deal’s authors would “provide all members of our society, across all regions and all communities, the opportunity, training and education to be a full and equal participant in the transition, including through a job guarantee program to assure a living wage job to every person who wants one.”

This is no longer a fringe idea. The Center for American Progress, Barack Obama’s think tank, supports a government job for everyone “to counter the effects of reduced bargaining power, technical change, globalization,” and presidential candidate Kirsten Gillibrand tweeted her support for it as an alternative to tax reform.

A new system for corporate control. Senator Elizabeth Warren wants a new federal charter for businesses with more than $1 billion in annual revenue that would make companies answer to more than shareholders. Employees would elect 40% of directors, who would be obliged to consider “benefits” beyond returns to the owners. This radical redesign of corporate governance would give politicians and their interest groups new influence over private business decisions and assets.

Vastly higher taxes. These ideas would require much more government revenue, and Democrats are eagerly proposing ways to raise it. Mr. Sanders wants to raise the top death tax rate to 77%. Ms. Ocasio-Cortez wants a new 70% tax rate on high incomes, which is supported by the Democratic intelligentsia. The House Ways and Means Committee is working on a plan to raise the payroll tax to 14.8% from 12.4% on incomes above $400,000.

Never to be outdone on the left, Ms. Warren wants a new 2% “wealth tax” on assets above $50 million and 3% above $1 billion, including assets held abroad. France recently junked its wealth tax because it was so counterproductive, and such a tax has never been levied in America. This is government confiscation merely because someone has earned or saved more money than someone else. Socialism?

These are merely the most prominent proposals. There are many others, such as Ms. Warren’s plan to set up a government-owned generic drug maker that would inevitably put private companies out of business because its cost of capital would be zero.

Some readers might think this is all so extreme it could never happen. But presidential candidates don’t propose ideas they think will hurt them politically. The leftward lurch of Democratic voters, especially the young, means the party could nominate the most left-wing presidential candidate in U.S. history. If other Democratic candidates oppose any or all of this, we’d like to hear them.

The American public deserves to have a debate about all this, lest it sleepwalk into a socialist future it doesn’t want. Credit to Mr. Trump for teeing it up.

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The violence that undoes Puerto Rico


Opinion / Editorial

The violence that undoes the Country

Published: Wednesday, January 9, 2019

As reported, sixteen murders occurred in Puerto Rico between January 1 and January 6, 2019. This is more than 2 deaths a day in the first days of this year that begins with a violence that never ceases. These new deaths have been the sequel to a violent end of the year, in which there were incidents that challenge the imagination, such as the police agent who took dozens of hostages at the headquarters of a cooperative.

We had already closed 2018 with 23 women murdered by their partners. There were actually 25, because the two cases that have not yet been officially clarified have all the traces of gender violence that persists as a continuous threat against the life and physical integrity of our women.

The shootings between rival bargains of drug traffickers – which have become “our daily bread” – rose to another level with the occurrence of King’s Day in Isla Verde. In broad daylight, a man was seized with automatic weapons whose intense thumping was captured in homemade videos that became viral and alarmed the country. The Police shone by its absence in the culminating moments of the event that made clear how strong is the grip of narcoviolence in Puerto Rico, and how scarce the protection measures available to prevent innocent citizens from becoming victims of the crossfire among criminals, more and more daring and brazen in their fight for the conquest of the street.

Equally moving, for the sinister, is the press report that accounts for the alarming increase in deaths from overdoses among intravenous drug users, whose cause is attributed to the sale of drugs adulterated with powerful synthetic substances that can cause death snapshot.

In his article in this edition of CLARIDAD, comrade Manuel de J. González analyzes the causes behind some of these events, which frames the deep crisis in all the orders that our society is going through, and denounces the conditions that provoke them, as well as as the attitude of alienation and apathy of the authorities in charge of running the country.

Certainly, there is a huge gap in the police response to the events of violence that plague us. On the one hand, they are mobilized in exaggerated numbers, such as the agents of the Shock Force whenever the State wants to repress the citizens who protest against the abuses of the Government or the Fiscal Control Board. On the other, there is the pathetic image of a decimated, demobilized, poorly paid police , whose pensions and other benefits hang by a thread, in whose hosts there are serious problems of mental health and sexist violence, and a lack of personnel resources and physical that border on negligence. What better condition can there be for criminals to feel free to commit their misdeeds than a Police whose rate of clarification of crimes is a measly 12%!

This contrasts abysmally with the millionaire figures paid by our people in escorts for government officials and in public and private protection by the members of the Fiscal Control Board.

Meanwhile, in the Bureau of Forensic Sciences there is no place for more corpses. Nor are there sufficient personnel or equipment to carry out autopsies or tests of any kind, including toxicological ones. Another carte blanche for drug merchants and other criminals who, feeling safe, occupy our streets and live for their respect. This is a serious situation that should raise the following question: How do the governments of Puerto Rico and the United States, and the Fiscal Control Board, plan to advance a country that unravels in violence?


La violencia que deshace al País

Publicado: miércoles, 9 de enero de 2019

Según ha sido informado, dieciséis asesinatos ocurrieron en Puerto Rico entre el 1 y el 6 de enero de 2019. Esto es más de 2 muertos al día en los primeros días de este año que comienza abatido por una violencia que no cesa. Estas nuevas muertes han sido la secuela de un fin de año también violento, en el cual se registraron incidentes que desafían la imaginación, como el del agente de la Policía que tomó decenas de rehenes en la sede de una cooperativa.

Ya habíamos cerrado el 2018 con 23 mujeres asesinadas por sus parejas. Realmente fueron 25, porque los dos casos que aún no se han esclarecido oficialmente tienen todos los trazos de la violencia de género que persiste como una amenaza continua contra la vida e integridad física de nuestras mujeres.

Las balaceras entre gangas rivales de narcotraficantes- que se han convertido en “el pan nuestro de cada día”- se elevaron a otro nivel con la ocurrida el Día de Reyes en Isla Verde. A plena luz del día, se cosió a tiros a un hombre con armas automáticas cuyo intenso tableteo fue capturado en vídeos caseros que se tornaron virales y alarmaron al País. La Policía brilló por su ausencia en los momentos culminantes del suceso que hizo patente cuán fuerte es el agarre de la narcoviolencia en Puerto Rico, y cuán escasas las medidas de protección disponibles para evitar que ciudadanos inocentes se conviertan en víctimas del fuego cruzado entre maleantes, cada vez más atrevidos y desfachatados en su lucha por la conquista de la calle.

Igualmente conmovedor, por lo siniestro, es el reportaje de prensa que da cuenta del aumento alarmante en las muertes por sobredosis entre los usuarios de drogas intravenosas, cuya causa se le atribuye a la venta de drogas adulteradas con potentes sustancias sintéticas que pueden causar una muerte instantánea.

En su artículo en esta edición de CLARIDAD, el compañero Manuel de J. González analiza las causas tras algunos de estos sucesos, los cuales enmarca en la profunda crisis en todos los órdenes que atraviesa nuestra sociedad, y denuncia las condiciones que las provocan, así como la actitud de enajenación y desidia de las autoridades a cargo de dirigir el País.

Ciertamente, hay un desfase enorme en la respuesta policíaca ante los sucesos de violencia que nos asolan. De un lado, se les moviliza en números exagerados, como por ejemplo a los agentes de la Fuerza de Choque siempre que el Estado quiere reprimir a los ciudadanos y ciudadanas que protestan contra los atropellos del Gobierno o de la Junta de Control Fiscal. Del otro, surge la imagen patética de una Policía diezmada, desmovilizada, mal remunerada, cuyas pensiones y otros beneficios penden de un hilo, en cuyas huestes hay graves problemas de salud mental y de violencia machista, y con una falta de recursos de personal y físicos que rayan en la negligencia. ¡Qué mejor condición puede existir para que los criminales se sientan libres de cometer sus fechorías que una Policía cuya tasa de esclarecimiento de delitos es de un mísero 12%!

Esto contrasta abismalmente con las cifras millonarias que paga nuestro pueblo en escoltas para funcionarios gubernamentales y en protección pública y privada los miembros de la Junta de Control Fiscal.

Mientras, en el Negociado de Ciencias Forenses ya no hay lugar para más cadáveres. Tampoco hay personal ni equipos suficientes para realizar autopsias ni pruebas de ningún tipo, incluyendo las toxicológicas. Otra carta blanca para los mercaderes de drogas y demás criminales que, sintiéndose a salvo, ocupan nuestras calles y campean por su respeto. Esta es una situación grave que debe provocar la siguiente pregunta: ¿De qué manera los gobiernos de Puerto Rico y Estados Unidos, y la Junta de Control Fiscal, proyectan adelantar un país que se deshace en violencia?

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Corruption and conflict of interest in Puerto Rico can be reduced with transparency

Why should high-priced consultant McKinsey be allowed to profit in the millions on inside information with a conflict of interest?

Transparency of Puerto Rico Bankruptcy Is the Aim of a New Bill

Puerto Rico’s bankruptcy case is one of the largest in United States history, with billions of dollars in bond debt and unfunded pensions to restructure, and mind-bending legal complexities.CreditRicardo Arduengo/Associated Press

House lawmakers concerned about the possibility of self-dealing and other hidden conflicts of interest in Puerto Rico’s $123 billion bankruptcy introduced a measure on Wednesday intended to strengthen reporting requirements, after one of the case’s most influential consultants was shown to have an undisclosed stake in Puerto Rico’s debt.

Representatives put the bipartisan measure forward after The New York Times reported that the consultant, McKinsey & Company, had bought millions of dollars’ worth of Puerto Rican bonds at a deep discount and had not disclosed that investment. That puts the consulting firm, which is advising a federal oversight board as it leads the island through fiscal reforms and a debt restructuring, in a position to profit from the plans that it is helping to design.

“The people of Puerto Rico can’t have faith that this oversight board is putting their interests first if consultants helping implement the restructuring could profit from how much debt service is available under the very fiscal plans they design,” said Representative Nydia M. Velázquez, the New York Democrat who is the lead sponsor of the bill.

Other sponsors include Representative Rob Bishop, the Utah Republican who is chairman of the House Natural Resources Committee; Representative Raúl M. Grijalva, the Arizona Democrat who is expected to become chairman next year; and Jenniffer González-Colón, the Republican who represents Puerto Rico as a nonvoting member. The House Natural Resources Committee has jurisdiction over United States territories and drafted the bankruptcy-like law that governs Puerto Rico’s restructuring proceedings, but it left out the disclosure provisions customarily found in bankruptcy statutes.

Representative Andy Biggs, an Arizona Republican and member of the House Judiciary Committee, is also co-sponsoring the bill. The Judiciary Committee has jurisdiction over the courts, including bankruptcy courts. Mr. Biggs said that as now written, Puerto Rico’s restructuring law left unclear what was supposed to happen if an adviser did appear to have a conflict of interest.

An examination of court records associated with Puerto Rico’s case shows that a hedge fund owned by McKinsey has invested in a type of bond backed by the territory’s sales tax. Until this year, those bonds were available at a deep discount because of their nonpayment risk, but the federal oversight board announced an unexpectedly favorable repayment plan for those bonds, causing the prices to rebound. If all goes according to plan, McKinsey’s hedge fund will more than double its money.

McKinsey has said it obeyed all necessary disclosure requirements. A spokesman for the company said on Wednesday that its investment division, MIO Partners, manages money for the firm’s partners, former partners and employees and operates separately from its consulting activities.

“McKinsey consultants cannot direct MIO investments and do not have knowledge of MIO third-party managers or specific investments,” he said. “Information regarding specific investments held by MIO is not shared with McKinsey & Company.” He added that Puerto Rico’s oversight board had begun an independent review of the situation.

Jenniffer González-Colón, the Republican who represents Puerto Rico as a nonvoting House member, with the island’s governor, Ricardo Rosselló, left, in June in Washington.CreditCarolyn Kaster/Associated Press

In any bankruptcy, the money available to repay debts is limited, so if one type of creditor gets more, the others will generally get less. When the bankrupt party is a government, it also means less money for public services. In Puerto Rico’s case, much of the money that pays for those services already comes from taxpayers in the 50 states.

The cost is bound to be steep: Puerto Rico’s bankruptcy case is one of the largest in United States history, with billions of dollars in bond debt and unfunded pensions to restructure, and mind-bending legal complexities. McKinsey will have earned $69 million as of the end of December, according to court filings and the terms of its contracts with the federal oversight board.

The firm’s conduct has been challenged in other bankruptcies, as well. In November, the Justice Department asked a bankruptcy judge in Virginia to reopen the case of a coal company, Alpha Natural Resources, and force McKinsey to return the roughly $20 million it was paid because McKinsey had concealed an investment stake. A hearing to discuss the matter has been scheduled for January.

And a bankruptcy judge in Houston, David R. Jones, this week ordered limited discovery in the bankruptcy of Westmoreland Coal, where McKinsey’s role representing the company is also being challenged.

McKinsey has said it did nothing wrong in either case.

In October, congressional aides met with the chairman of Puerto Rico’s federal oversight board, José B. Carrión III, and expressed concern over McKinsey’s undisclosed investments. Mr. Carrión said the board was confident that McKinsey’s advice was not tainted, but the aides said there was at the very least an appearance of impropriety. They warned that they were working on a legislative fix.

The United States Bankruptcy Code requires the experts who work on bankruptcies to have undivided loyalties, which is intended to uphold public confidence in a system where large amounts of money constantly change hands. All professionals working on a case are required to make sworn disclosures of any investments and business activities that connect them with the other parties. Being connected does not automatically disqualify the professional, but it must be disclosed; the penalties for hidden conflicts can be severe.

As a United States territory, Puerto Rico was not eligible for bankruptcy. Congress had to enact a new law, called Promesa, to give the island a legal framework for its restructuring.

The new bill would require all professionals to make the usual sworn disclosures — not just McKinsey, but also other experts working for Puerto Rico’s oversight board, including Citigroup, Ernst & Young and Proskauer Rose.

It would also give the Justice Department’s bankruptcy watchdog, the Office of the United States Trustee, an explicit mandate to investigate possible conflicts of interest and empower the federal judge handling Puerto Rico’s case to block the payment of an adviser’s fees if a conflict is found.

A version of this article appears in print on , on Page B8 of the New York edition with the headline: House Seeks Clarity on Puerto Rico’s Bankruptcy.
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Puerto Ricans Face ‘Sacrifice Everywhere’ on an Insolvent Island



Puerto Ricans Face ‘Sacrifice Everywhere’ on an Insolvent Island


Workers at the Río Piedras terminal in San Juan, Puerto Rico, face waning business. Transportation businesses have been hurt by the economic crisis as drivers have to wait hours to fill a trip for their routes. Credit Erika P. Rodriguez for The New York Times

SAN JUAN, Puerto Rico — Angel González, a retired schoolteacher facing a 10 percent cut to his pension, is beginning to wonder whether his three-person household will have to cut back to one cellphone and take turns using it.

Santiago Domenech, a general contractor with $2 million of his savings tied up in bonds Puerto Rico just defaulted on, once had 450 employees. Now he has eight. His father-in-law, Alfredo Torres, owns Puerto Rico’s oldest bookstore, but it has been going downhill for two years.

“The government is bankrupt,” said Bernardo Rivera, 75, a private bus driver who sometimes earns only $40 all day. “Everyone is bankrupt. There is nothing left. People who do not have jobs do not take the bus to work.”

These are some of the voices of Puerto Rico’s business owners, retirees and public servants who are caught in the middle — they would say the bottom — of the largest local government insolvency in United States history. Faced with a $123 billion debt it cannot pay, Puerto Rico filed for a kind of bankruptcy protection on Wednesday, a move that sent shivers down the spines of everyone from bond holders fearful of staggering losses to street sweepers and public employees whose already meager paychecks are likely to dwindle.

Only eight passengers were recorded in one day on a board at the terminal. Credit Erika P. Rodriguez for The New York Times

Just days after a May Day strike sent tens of thousands of people to the streets in a protest that turned violent, people gathered at work, in parks and their homes in never-ending debates over the uncertainties. At the Río Piedras terminal where Mr. Rivera works, the drivers and cleaning crews huddled to gripe about waning business and pensions, as well as ever-rising fees and water and electricity bills.

Although the move on Wednesday was hardly a surprise, it left a sense of gloom and anxiety here, as civil servants question whether their pensions will ever be paid and private companies suffer the consequences of the brutal domino effect that results when taxes rise, salaries drop and the middle class takes off on a mass exodus for Florida.

“I’m going to stay here, even if I make only $1,” Mr. Rivera said.

The government plans sweeping austerity measures in the coming months that will hit teachers especially hard. On Friday, Puerto Rico’s education secretary announced a proposal to close 184 schools. Teachers may see their hours trimmed by two days a month.

So while the government seeks protection from lawsuits from the hedge funds and other financial firms that invested in Puerto Rico’s risky debt, residents of this United States territory are taking the squeeze. Fines for parking and other traffic violations have doubled. Dozens of government agencies are on the chopping block, while perks like the annual Christmas bonus and pay for unused sick time make for wistful memories.

On an island where household electric bills often reach hundreds of dollars, residents are worried that their future has been placed in the hands of strangers — an oversight board and a federal judge — who may or may not feel much empathy for American citizens whose per capita income is about $15,000 but who pay $6.25 for a gallon of milk and have an 11.5 percent sales tax.

“At some point I will have to decide whether I live in a house, or with medical insurance,” said Mr. González, 55, a retired electronics teacher. “And the food?” he said, letting the thought trail off.

His pension is about $1,900 a month, of which $556 goes to pay his family’s medical plan.


The Dr. Martin G. Brumbaugh elementary school in Puerta de Tierra, San Juan, will be one of many schools closed as part of austerity measures. Credit Erika P. Rodriguez for The New York Times

Gov. Ricardo A. Rosselló, who took office in January, acknowledged that low-income people without access to health care and parents with children in public schools would be the most vulnerable in the months ahead.

“There has to be sacrifice everywhere,” he said in an interview. “We have been very clear about what that sacrifice is.”

His measures were deliberately spread out, so they do not hit any one group unfairly hard, he said. Although most residents believe Mr. Rosselló had no choice but to seek some sort of protection from the flurry of lawsuits that had already begun, others have criticized him for breaking a campaign promise. He is in the awkward position of being the son of one of the long line of former governors who brought Puerto Rico to its fiscal knees by borrowing and borrowing to balance budgets and to finance a bloated bureaucracy ripe with political patronage.

The last two administrations cut tens of thousands of positions from public payrolls, and now Mr. Rosselló has vowed to make “strategic cuts” that do not cause layoffs but put the government in a position to better negotiate with its creditors. Among the ideas is to cut government pensions by 10 percent, which will hurt retired police officers and teachers most, because they do not receive Social Security benefits.

Creditors were unimpressed, Mr. Rosselló said.

“They don’t think that fiscal plan is appropriate; they think they should get more money and that the people of Puerto Rico should get less,” he said. “Of course, my position is I am completely against that, and I will protect the people of Puerto Rico over anything.”

When he took office, Mr. Rosselló said his first task was to determine “how deep the rabbit hole went.” He expected a $3 billion deficit, and instead found a deficit of $7.5 billion.

“What was happening in Puerto Rico is the definition of a Ponzi scheme,” he said.

Roberto Pagán, vice president of the Puerto Rico chapter of the Service Employees International Union, said he expected that up to 400,000 people would lose health plans because they will not be able to afford it. Public services like filing a child abuse complaint will probably go unattended.

“In this fiscal plan, we see proposals that are very optimistic and hardly realistic,” Mr. Pagán said.

A closed furniture store in Río Piedras, San Juan. Credit Erika P. Rodriguez for The New York Times

Mr. Domenech, 50, the general contractor, who lives in Aguadilla in western Puerto Rico, said he had no idea where people like him stood in the new Puerto Rican reality. With the government owing huge sums to credit unions and companies like Microsoft, hedge funds and gasoline suppliers, where do his unpaid bills fit in?

Not only are his savings tied up in Puerto Rico’s bonds, but his contracting business also went under, he said, largely because the government did not pay the invoices on an airport renovation project that dragged on and went over budget.

“They left me with no money,” Mr. Domenech said. “I feel frustrated and helpless.”

He has thought about moving to Canada.

His father-in-law, Mr. Torres, 63, owns Librería La Tertulia, the island’s oldest book store, which depends on the disposable income of students and professors at the University of Puerto Rico’s campus in Río Piedras. But students protesting severe budget cuts have been on strike for over a month, and the store’s profits dipped up to 70 percent this semester, Mr. Torres said.

“It’s not just me,” he said. “It’s the pharmacy, it’s the grocery store.”

He said that it would be easy for him to blame the slow foot traffic on the student strike but that he looks at the deteriorating urban core around him and blames decades of neglect that pushed more people to suburban shopping malls and still others off the island altogether. The boarded storefronts at Paseo de Diego, a nearby pedestrian mall, underscore his point.

“A lot of this is perception, but it’s real,” he said. “Go walk around the plaza.”

Data from the Bureau of Labor Statistics shows that Puerto Rico’s work force dropped by about 300,000 in the past decade, said Carlos J. Saavedra-Gutiérrez, the labor secretary here.

“This is a new chapter,” he said, as he rattled off labor changes he hopes will stimulate the economy and create “a stopgap to the exodus.”

Many of those left behind do not have the money to leave. Jesús González, 53, has spent 30 years sweeping the streets of San Juan, but with the cuts coming to pensions, he estimates that he will have to stay on the job until he is at least 70.

Michael Portes and Agustin Portes worked on rebuilding the wall of a monument in front of the Capitol building in San Juan on Saturday. Puerto Rico’s work force has dropped by about 300,000 in the past decade. Credit Erika P. Rodriguez for The New York Times

“The fiscal board making all the decisions is going to take it all from us,” he said. “They have to.”

Both of Iris D. Matos’s grown children moved to the mainland in search of work. She and her husband, both retired electric company employees, are bracing for a $500 monthly cut in their pensions, even as their grandchildren depend on them for basic necessities.

“There isn’t a single sector that hasn’t been hit: The older people are worried about their retirements, the parents have had their hours cut, and the young people are on strike at the university, and the kids are about to see their schools closed,” Ms. Matos, 64, said. “They are spreading the pain, but to only one class of people: us.”

A version of this article appears in print on May 7, 2017, on Page A1 of the New York edition with the headline: Fiscal Fears Grip Puerto Ricans Facing ‘Sacrifice Everywhere’.



Puerto Rico Must Not Waste Its Second Chance

Restructuring debt is just the first painful step on the road to recovery.

by Michael R. Bloomberg @MikeBloombergMore stories by Michael R. Bloomberg

‎May‎ ‎9‎, ‎2017‎ ‎5‎:‎00‎ ‎AM

Hope on the horizon?

Photographer: Christopher Gregory/Bloomberg

For too long, Puerto Rico has been trapped in political and economic limbo. Politicians have been afraid to make tough decisions. Voters have been reluctant to face reality. Investors have been unwilling to compromise.

Now there is an opportunity to break the logjam. Drastic as it seems, Puerto Rico’s decision to seek the biggest debt restructuring of any U.S. state or local government is wise. It offers the best hope for economic recovery and an orderly resolution of the territory’s more than $70 billion in debt.

Yet this arduous bankruptcy-like process is only the first step, and by no means the hardest. Far-reaching economic reforms and conditional federal support will be essential as well.

The commonwealth’s economy has shrunk by 14 percent over the last decade. Unemployment is more than double the national rate, the number of people with jobs has fallen over the last decade by nearly one-quarter, and labor-force participation stands at just 40 percent. More than 40 percent of the population lives in poverty and is on Medicaid. With $50 billion in unfunded obligations, its pension funds are about to go bust. As if all that weren’t enough, the island is grappling with Zika, a public health emergency.

Many Puerto Ricans have fled to the mainland, reducing the island’s population by some 10 percent over the last decade. When offshore bondholders — most of the island’s debt is held outside the commonwealth — ask Puerto Rico’s government to devote more money to servicing debt, they are asking for more pain to be inflicted on those who remain.

The 10-year fiscal plan recently certified by a federal oversight board imposes cuts on government payrolls, subsidies, healthcare spending and pensions. To be sure, many of these are overdue. For instance, over the past decade Puerto Rico has lost students but gained teachers. The island has fewer prisoners, but no fewer jails.

Yet the plan’s forecasts, which by law could not assume additional federal support, still expect no resumption of growth until 2022. That’s a hard blow to both Puerto Ricans and bondholders.

Washington is in a position to offer more help. It could bring Puerto Rico’s Medicaid funding to parity with the states, which would also stem the exodus of doctors. Extending a federally supported Earned Income Tax Credit would get more Puerto Ricans into the workforce, as would allowing Puerto Ricans to claim the Child Tax Credit on the same terms as mainlanders. Allowing Puerto Rico to set its own (lower) minimum wage would get more young workers into the formal economy. A waiver from the Jones Act, which forces Puerto Rico to use expensive American ships for mainland commerce, would lower costs for food and energy.

Most important is what Puerto Rico needs to do. The list is long and by now familiar — everything from collecting honest statistics and introducing effective financial controls to lifting the regulatory burden from business. (The World Bank ranks the U.S. eighth in the world for ease of doing business; Puerto Rico is 55th.)

The oversight board needs to use its influence and powers to make sure the commonwealth follows through, flyspecking subsequent annual budgets for proof of implementation. Congress, which has established a task force for promoting economic growth on the island, should promise additional support when the island delivers on economic reform, but not before.

A comprehensive debt restructuring won’t work by itself. Sustainable debts plus a measure of additional federal support won’t be enough, either: Puerto Rico’s recovery will depend first and foremost on the dedication of its leaders and people to making the most of their second chance.


Posted in culture and cycle of dependency, economic crisis, Puerto Rico economic crisis, Puerto Rico necessary improvements | Tagged , , , , , , , , | Leave a comment
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