City lawyers, consultants cash in on Puerto Rico’s bankruptcy

New York lawyers, consultants and publicists stand to rake in more than $100 million in fees as Puerto Rico struggles to stay afloat.

The commonwealth’s $72 billion debt crisis has been a boon for well-connected companies like MillCo Advisors, a financial-restructuring firm, which stands to gain as much as $52.4 million. Jim Millstein, who heads MillCo, is a former official of the US Treasury Department.

Puerto Rico also has contracts with Manhattan law firms Cleary Gottlieb and Proskauer Rose that max out at $37 million and $6.6 million, respectively, according to government records and contracts reviewed by The Post.

Another Manhattan law firm, Kirkland & Ellis, is nickel-and-diming ­Puerto Rico, charging for catering and 16 cents per page for photocopying, according to its contract, which shows it stands to make up to $4.6 million.

Despite all the high-powered help, Puerto Rico defaulted on debt payments this month, the second time it has done so, and US Treasury Secretary Jack Lew this month said the commonwealth was “in the midst of an economic collapse.”

Puerto Rican Gov. Alejandro Garcia Padilla has said he will pay municipal workers over the commonwealth’s own constitutional obligation to pay its debt.

“The fact that the Puerto Rican debt crisis resulted from years of over-spending, political cronyism and outright corruption goes a long way to explain why Puerto Rico’s political leaders have poured many millions of dollars into a small group of politically connected legal, lobbying and consulting firms,” said Ken Boehm, chairman of the National Legal and Policy Center, a Virginia watchdog.

SKDKnickerbocker, the powerful Manhattan communications and public-affairs firm, was retained by Puerto Rico to handle public relations and marketing at a cost of up to $3.4 million, including $500,000 for advertising.

Influential lobbyist Jennifer Cunningham is the point person in six of the seven Knickerbocker contracts with Puerto Rico, records show. Cunningham, pal to Gov. Cuomo and former wife of Attorney General Eric Schneiderman, is a former honcho with SEIU Local 1199, the giant health-care-workers union based in Manhattan.

Some of Puerto Rico’s contracts with Knickerbocker, like with other firms, were amended and the payment caps increased. The contract ­totals were confirmed by Puerto Rico’s Office of the Comptroller.

Yet Knickerbocker VP Barbara Morgan, speaking also for MillCo, Cleary Gottlieb and the Puerto Rican government, insisted to The Post that the contract figures listed on the comptroller’s Web site were inaccurate.

“The documents referenced do not reflect the payments made to these firms; they only represent the potential costs of the contracts,” said Morgan, former spokeswoman for Rep. Anthony Weiner’s mayoral race.

Morgan issued a statement defending the hiring of the consultants. On Jan. 16, she said the statement came from Puerto Rico Secretary of State Víctor Suárez; and on Jan. 22, she attributed the same statement, with four words changed, to Grace Santana, chief of staff to the governor.

The other firms refused to comment or refused to discuss payments.

The commonwealth has been suffering from a sagging economy after a tax break expired and is facing massive debt.



City lawyers, consultants cash in on Puerto Rico’s bankruptcy

SKDKnickerbocker VP Barbara Morgan


By Isabel Vincent and Melissa Klein

City lawyers, consultants cash in on Puerto Rico’s bankruptcy

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