Campaign for clarity

Crowdfunding effort to audit Puerto Rico debt

Story and photos by Gregg McQueen

The clarity will come from the citizens.

So explain organizers of a new crowdfunding campaign launched to conduct an independent, citizen-led audit of Puerto Rico’s $72 billion public debt.

Citizen Front for a Debt Audit (Frente Ciudadano por la Auditoría de la Deuda in Spanish) unveiled a U.S. website [www.auditoriaya.org] on Thursday to raise money to investigate factors leading to the debt, which advocates said weakened the island’s healthcare and infrastructure, contributing to thousands of deaths following Hurricane Maria and hampering recovery efforts.

“We want to find the truth, not repeat the same mistakes and to hold those responsible for the crisis accountable,” said Eduardo Figarella of Citizen Front for a Debt Audit at a June 7 press conference to announce the campaign.

Advocates argued that much of the debt, possibly as much as $30 billion, is illegal because it was compiled through the issuance of questionable bonds meant to cover the island’s debt service. Failure of the bonds led to the degradation of healthcare services, slashing of pensions, school closures and other measures.

Former City Council Speaker Melissa Mark-Viverito, who now serves as a senior advisor for advocacy group Power 4 Puerto Rico, said it was important to conduct a thorough review, independent of the island’s government, to uncover the true nature of the debt and eliminate any portion of it deemed to be unjust.

“The effort to create a citizen-led process is key,” she said.

The Audit Now campaign, first launched in Puerto Rico on May 16, hoped to raise at least $500,000 to start the audit with a focus on bond insurance, said Campaign Coordinator Eva Prados. Its website is now available in English and requests donations of $20. An audit is expected to take from six months to a year.

Prados said the Puerto Rican government has pledged to cooperate in the audit, which would be conducted by Citizen Front legal experts. She noted that her group has petitioned the Puerto Rico Fiscal Agency and Financial Advisory Authority to receive necessary documents.

“The Governor has given his word that he will give all the necessary information,” Prados said. “[He] said he welcomed any citizen audit.”

“It’s basically a challenge to the governor,” Mark-Viverito added. “He has said publicly that if they can raise the money to do this audit, that he would support it. So let’s put it to the test.”

Mark-Viverito said she will march with Citizen Front in the Puerto Rican Day Parade to help raise awareness for the Audit Now campaign.

Author Naomi Klein, who has written about the use of debt as a political weapon in books such as The Shock Doctrine, remarked that “debt has been used to both attack democracy and impose economic policies that enrich elites at the expense of the people.”

Klein has also written The Battle for Paradise, which explores how the country is being newly challenged in the wake of Hurricane María to come together for a “just” recovery and sustainability in the wake of what she has identified as disaster capitalism.

Royalties from the sale of the book, which was published in English and Spanish, will go to JunteGente, a network of organizations working for Puerto Rico’s recovery.

Klein said that austerity measures brought on by debt weakened the island well before Hurricane Maria, and suggested the government deliberately levied harmful policies to keep greater control.

“When you have debt being used as a pretense to impose policies that they want to impose anyway to attack the gains made by working people, to roll back those gains, it has nothing to do with repaying the debt,” Klein said.

Juan Cartagena, President and General Counsel of LatinoJusticePRLDEF, acknowledged it could be a struggle from a legal perspective to demonstrate that the debt was issued unjustly, but said he hoped the parties involved were willing to demonstrate transparency.

“Nobody wants to talk about the illegality of this debt, because the ripple effects of any finding of illegally issued debt are significant,” Cartagena. “There’s potential criminal actions. There’s potential liability for all the lawyers who said to these people who bought these bonds, ‘here, go ahead and buy them, they’re safe.’ It’s the same reason hedge funds dipped into this market knowing Puerto Rico was insolvent.”

“There are a lot of questions regarding the financial institutions’ responsibly here, so the results of this audit will tell us the truth,” said Prados.

For more information or to donate, go to www.auditoriaya.org.