Madagascar Development

Dozens of FBI agents are seizing documents and electronic equipment at the city hall of a financially struggling town in northern Puerto Rico. The special agent in charge of the FBI's San Juan division said Tuesday that agents were serving a search warrant at the government offices in Toa Baja. Douglas Leff said the FBI would turn over potential evidence to the U.S. Attorney's Office. The reason for the search isn't clear. The FBI did not release further details. The Internal Revenue Service recently froze Toa Baja's accounts because of a $1.5 million debt and the city government temporarily shut down most operations. Mayor Jorge Ortiz said he is cooperating and declined further comment. FBI agents raid financially troubled town in Puerto Rico

The federal board overseeing Puerto Rico's financial restructuring on Friday set a target date of Jan. 31, 2017 to certify a fiscal turnaround plan for the U.S. territory, and heard from bondholders and industry leaders about the merits of a draft of the proposal. The board, created this year under the Puerto Rico rescue law known as PROMESA, is working on debt restructuring talks with holders of Puerto Rico's $70 billion in bonds in an effort to pull the struggling island out of a crisis marked by a 45 percent poverty rate and shrinking population. The bipartisan, seven-member board must approve the island’s annual budgets and certify a fiscal turnaround plan submitted by its governor, Alejandro Garcia Padilla. The governor presented a draft plan last month, forecasting a financing gap as high as $59 billion over 10 years. While the plan proposes some revenue-generating measures to close the gap, it relies heavily on cutting repayments to bondholders. Board Chairman Jo...

Puerto Rican first lady Wilma Pastrana Jimenez on Monday welcomed Beatriz Areizaga Garcia, the wife of the island's governor-elect, Ricardo Rossello, to La Fortaleza, the gubernatorial residence. Pastrana Jimenez had invited her successor as first lady to visit the first family's residential area and the main halls in Santa Catalina Palace. According to a statement released by the Governor's Office, the pair discussed raising their children in the executive mansion, which was designated a World Heritage Site by Unesco in 1983. The first lady explained the restoration work on the mansion carried out under the current administration not only in terms of preserving the historic site but also to increase the safety of residents, visitors and the enjoyment of La Fortaleza for all Puerto Ricans. The meeting also allowed the incoming first lady to chat with Gov. Alejandro Garcia Padilla and to visit the current first lady's office, from where in recent years she has he...

Puerto Rico’s cooperativa system—consisting of state-insured credit unions—faces huge financial losses and could collapse, costing low-income residents their life savings, the territory’s Governor, Alejandro Garcia Padilla told the federal oversight board overseeing Puerto Rico’s financial restructuring. In an Oct. 14 presentation to the oversight board, Padilla said that the cooperativas hold deposits for one-third of all island residents and have investment portfolios that are about 75% invested in commonwealth bonds. Puerto Rico faces a huge fiscal crisis and the island government has been unable to pay its debts. Earlier this year, Congress passed legislation creating the oversight board, which is charged with restructuring the government and its debt. The restructuring must protect the cooperativa system, Padilla said. Cooperativas are financial institutions insured by a territory government agency, the Corporation for the Supervision and Insurance of Cooperatives. There are...

Puerto Rico's economic activity index (EAI) for August fell 1 percent from a year earlier, the U.S. territory's fiscal agency reported on Tuesday. The Caribbean island's total EAI, an economic measurement correlated to gross national product, was 124.1 in August, the Puerto Rico Fiscal Agency and Financial Advisory Authority said in a monthly report. Puerto Rico is burdened with $70 billion in debt, a 45 percent poverty rate and a rapidly declining population as its residents, who are U.S. citizens, emigrate in droves to the mainland United States. Its finances are now under the oversight of a federally appointed board tasked with helping the island restructure debt and overhaul its economy. The EAI is based on four economic indicators: total nonfarm payroll employment, electric power generation, gasoline consumption and cement sales. Nonfarm payroll employment was down 0.3 percent from a year ago, the report said, but the other indicators rose. Power generati...

U.S. Supreme Court Justice Sonia Sotomayor addressed a standing room only audience of students and women entrepreneurs on Friday, encouraging them to own their mistakes, be unafraid to ask for help and be fearless in the pursuit of their dreams. In an Oprah-esque question and answer session at San Juan's Caribe Hilton hotel, the first Latina Supreme Court Justice hugged, kissed members of the audience and autographed copies of her best selling memoir,  My Beloved World, as she doled out advise on everything from how to navigate law school (learn to write well, befriend the smartest student on campus) to how to overcome fear and believe in yourself to achieve your goals. Sotomayor visited the island and hosted a conversation with local businesswomen as well as students. "When I am down and out I look back and so I can look forward and say I have more I can do," said Justice Sotomayor in a room buzzing with excitement. The justice, whose parents migrated from the isla...

When Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) early this summer, it took a critical first step in getting Puerto Rico’s economy back on track.   The law puts in place a process to address past fiscal issues, while also identifying reforms to improve Puerto Rico’s economic future.   Currently, the law’s Congressional Task Force on Economic Development is hearing from stakeholders representing a variety of interests to determine which reforms Congress should pursue. While we agree there must be a comprehensive approach to ensure a long-term, stable recovery in Puerto Rico, the conversation should start with the ailing healthcare sector. Despite Puerto Rico’s inequitable treatment under federal law, healthcare is a critically important segment of Puerto Rico’s economy, employing about 85,000 people across the island. It also represents fertile ground for employment and economic growth. Economists have projected that a ...

Puerto Rico's newly created federal oversight board set an Oct. 14 deadline for the island's governor to draft a fiscal turnaround plan on Friday, as its first public meeting was disrupted by angry protesters. The board asked Governor Alejandro Garcia Padilla to present a plan laying out his vision for stabilizing Puerto Rico, which is grappling with $70 billion in debt, a 45 percent poverty rate and a decade-long recession. The seven-member board, created under the Puerto Rico rescue law known as PROMESA, was appointed on Aug. 31 by President Barack Obama and legislators. It will have broad powers to manage Puerto Rico’s finances and facilitate debt restructuring talks with creditors. The board met for the first time on Friday in Manhattan, electing Jose Carrion III as chairman. Carrion, one of four native Puerto Ricans on the panel, is an insurance executive and past chairman of Puerto Rico's Workers Compensation Board. “We’re working as quickly as possible, and ...

Puerto Rico's governor turned over the reins of his government's finances to a federal control board and outlined what he considers priorities during a televised address Thursday to prepare the U.S. territory for a historic change. Gov. Alejandro Garcia Padilla said his administration had tried everything to ameliorate a decade-long  economic crisis  before accepting that the creation of a federal control board was necessary. "We should all be aware of the repercussions of this process that starts now," he said. "Like many of you, I didn't agree either with the excessive power granted to the board, and with some of the people named to it. But the truth is we had no alternative." Established by U.S. legislation enacted in June, the seven-member board is scheduled to have its first meeting Friday in New York. It is expected to choose its president as well as outline the first steps it will take to help restructure a portion of a nearly $70 billion p...

The Obama administration announced Wednesday (August 31) the members of the federal oversight board established by the Puerto Rico Oversight, Management and Economic Stability Act, aka  PROMESA . The seven members of this board are charged with mapping Puerto Rico’s path forward. As we wrote when  PROMESA  was passed, the establishment of this board has the potential to be the Act’s greatest strength. Four members of the board were on lists developed by the Republican leadership in Congress, two were on lists developed by the Democratic leadership in Congress and one was chosen by the President himself. The President selected six members from the legislative lists. The members chosen from the Republicans’ lists are as follows: Andrew G. Biggs, who is a resident scholar at the American Enterprise Institute ( AEI ), a non-partisan public policy think tank. Biggs, who in 2014 was named one of the 40 most influential people in the retirement world by Institutional In...

Puerto Rico’s revenue collections for the first month of the fiscal year came in above budgeted estimates, a positive start after receipts came in below the island’s projections last year. The commonwealth’s general fund revenue in July totaled $665.1 million, $7.4 million more than expected, with tax receipts on foreign manufacturers and business coming in better than anticipated, Treasury Secretary Juan Zaragoza said in a statement Monday. Revenue collections for July were $38.6 million more than a year earlier. July revenue from sales and use taxes totaled $209.5 million, with $119.7 million going to repay sales-tax bonds, called Cofinas by their Spanish acronym, and about $90 million going to the general fund, according to Zaragoza. Puerto Rico collected  $9.7 billion  of general-fund revenue in fiscal 2016, $117 million below budgeted estimates, as individual and corporate tax receipts lagged projections. Michelle Kaske Puerto Rico’s July Revenue Comes in $7.4 ...

One of the oddities about Puerto Rico is that it falls under the jurisdiction of the New York Federal Reserve. And this week, the New York Fed, which flagged some of Puerto Rico's debt problems back in 2012, has begun publishing a series of blog posts about what's ailing the  debt-laden commonwealth  -- and what the island needs to do to get its economy back on its feet. The New York Fed kicked off its Liberty Street Economics blogs by declaring that "ultimately, achieving fiscal sustainability depends greatly on reinvigorating economic growth, which has been unsatisfactory in Puerto Rico in the past decade." It said that stronger growth would boost tax revenues, providing more room to reduce the deficit while maintaining essential public services, and gradually bend the debt-to-GDP trajectory in a more favorable direction." Still to come: How to do that. For now, members of Congress and many creditors of Puerto Rico are calling for curbs on government spend...

Puerto Ricans have been hit with another increase in electric bills as the U.S. territory's power company struggles to stay afloat. The heavily indebted Electric Power Authority says the increase implemented on Monday will generate some $94 million this fiscal year. Clients on average will see a $6 monthly increase in bills, which already average twice those on the U.S. mainland and have been blamed for suppressing economic development. Puerto Rico also has seen an increase in blackouts blamed on outdated infrastructure that the cash-strapped company has struggled to replace. Puerto Rico hit with new power bill increase amid crisis

Uber’s prolonged land war in China is over: Uber’s China unit will merge with competitor Didi Chuxing, ending a fierce multi-billion-dollar battle for the largest ridesharing market in the world. As part of the deal, Uber and its Chinese investors will reportedly receive 20% of the merged company, newly valued at $35 billion. Meanwhile, Didi will invest $1 billion in Uber at a $68 billion valuation. The deal ends months of speculation as to whether the two companies might come to deal or continue to bleed each other dry.  Bloomberg  first reported the news and sources confirmed the details to FORBES. Both Uber and Didi have shown a remarkable ability to raise capital. Uber recently raised $3.5 billion from Saudi Arabia’s sovereign wealth fund, capping off a  $5.5 billion round , while Didi announced a  $7.3 billion round , including debt and a surprise  $1 billion investment from American computing giant  Apple . Both companies were...

QUEBRADILLAS, P.R. — Far from the bustle of the capital, San Juan, in places where time walks slowly, jobs are scarce and colonial history dates to the era of pirates, some of Puerto Rico’s most powerful figures — municipal mayors — spend their days obliging, cajoling and demanding. Townspeople line up at their doors to plead for help: Abuela died, and no one can pay her funeral expenses. Can you help? Yes. The wood in my house is rotting. Can you help? Yes. The town needs another baseball field. Can you help? Yes. My cousin needs a job — can you hire her? Let me see what I can do. It is a ritual as familiar to the 78 mayors who oversee Puerto Rico’s 78 large and small  municipios , or municipalities — a few no bigger than several square miles — as the nighttime trill of the coquí frogs and the relief of summer downpours. But with Puerto Rico carrying $72 billion in debt after decades of borrowing and overspending , and an independent, federally appointed  control boa...