Natural Resources Committee Chairman Rob Bishop isn’t happy about the attacks — and he wants to drag CFIF's senior vice president of legal and public affairs, Timothy Lee, into Wednesday’s hearing on the Puerto Rico bill. | AP Photo Republicans writing Puerto Rico fix face attack ads

Republican lawmakers trying to hammer out a deal to avert Puerto Rico's looming debt crisis are bristling about attack ads being aired in their home districts by a conservative group that doesn’t disclose its donors.

The Center for Individual Freedom has spent close to $2 million trying to scare off the authors of a plan to restructure the island territory's debt ahead of a bill-writing session Wednesday and Thursday. The ads, which slam the deal as a bailout, support the position of hedge funds that stand to lose billions if Congress allows Puerto Rico to restructure its general obligation debt.


Those hedge funds declined to comment or didn’t respond to requests. The Center for Individual Freedom also did not respond.

Still, lawmakers and lobbyists are buzzing with speculation about the aggressive tactic. And backers of the congressional fix say they’re concerned the assault on members' conservative credentials could peel off support. Several of the House’s more vocal conservative iconoclasts sit on the Natural Resources panel, which has been assigned to write the bill because it has jurisdiction over territories. After a hearing Wednesday, some of those members said they wouldn't support the measure.

Speaker Paul Ryan has expressed his support for the latest draft of the panel’s bill, which would create an oversight board that could step in to restructure debt if the commonwealth’s negotiations with creditors break down. Lawmakers said Ryan is planning to bring the bill to the floor next week after a meeting of the entire Republican caucus Friday.

Lawmakers are racing to come up with a solution that will allow Puerto Rico to stave off default on its $73 billion in debt before payments are due in the coming weeks. The Puerto Rican government last week enacted a payment moratorium that will likely ensure a default on $400 million due May 1 if Congress doesn’t act. The government on Monday proposed a new restructuring of its debt to bondholders, offering a modest raise in the amount it would pay per year on the majority of its outstanding debt.

Natural Resources Committee Chairman Rob Bishop, a Utah Republican, told reporters today that Puerto Rico has become the number one issue in his district due to CFIF's ads.

"Who'd have thought the most pressing issue in the First District of Utah would be Puerto Rico?" Bishop said. "The commercials they're running against me have been helpful... Number one, they're over the top, and number two, they have given my phone number out there." Bishop said that's allowed his office to effectively explain the issue to constituents.

CFIF doesn't reveal its donors but has received grants from conservative groups American Action Network and Crossroads GPS, according to disclosures from those organizations.

CFIF dropped $900,000 on airtime on CNN, MSNBC and CNBC, plus more than $500,000 on D.C.-area broadcast and cable, and $86,000 on radio spots in Bishop's district, as well as those of fellow committee members Doug Lamborn (R-Colo.), Raul Labrador (R-Idaho) and Cresent Hardy (R-Nev.), according to data compiled for POLITICO by The Tracking Firm. The ads call the bill a bailout tantamount to allowing Puerto Rico to declare Chapter 9 bankruptcy that would also open the door for states to follow suit — which proponents say is untrue. The spots urge viewers and listeners to contact their representatives.

The campaign takes the same position as hedge funds such as Aurelius Capital Management, Monarch Capital Group, Stone Lion Capital Partners, Davidson Kempner and Fundamental Advisors.

Monarch, Aurelius, Fundamental and Davidson Kempner declined to comment. The others didn't respond to requests for comment.

More ads came from a group calling itself Main Street Bondholders, created by the 60 Plus Association, billed as a conservative alternative to AARP. The New York Times reported that 60 Plus was recruited by DCI Group, a Republican firm specializing in grassroots lobbying, known to critics as "AstroTurfing."

DCI also hired former Rep. Connie Mack to lobby on behalf of Puerto Rico bondholders, whom he declined to name when contacted by POLITICO.

Gerry Scimeca, a spokesman for 60 Plus, said it has "thousands of active donors who fund our projects" and declined to elaborate. DCI Vice President Craig Stevens didn't answer requests for comment.

Holders of sales tax bonds, who are warring with holders of general obligation bonds over the bill, slammed the ads.

“The Main Street Bondholders group, which claims to represent retail investors despite widely reported ties to hedge funds, is misrepresenting itself to Congress and now miscasting Territories Clause legislation as Chapter 9,” Susheel Kirpalani, a lawyer at Quinn Emanuel representing a group of investors in sales tax bonds, said through a spokesperson.

Even some investment funds that hold general-obligation debt signaled frustration with the ads. OppenheimerFunds, though a major stakeholder, distanced itself from the campaign. "OppenheimerFunds has maintained a constructive tone," spokeswoman Kimberly Weinrick said.

Alejandro Garcia Padilla, the governor of Puerto Rico, weighed in on the controversy himself on Tuesday.

“I'm wishing those ads do not affect the minds and will of the congressmen and women that need to deal with this," he said on a conference call with reporters.