Sept 25 (Reuters) - A Puerto Rico working group, composed of top government officials, plans to officially file legislation to create a financial control board in about two weeks, said Victor Suarez, the governor’s chief of staff.
The financial control board, a key recommendation from a fiscal and economic growth plan released in September, would have oversight over most government entities.
There is a draft of the legislation “already, although there are legal (analyses) and other issues still pending,” Suarez said after a meeting with lawmakers late Thursday, during which the group presented an overview of the legislation.
“We are talking of about two weeks to present it,” Suarez said. “We expect to begin formal negotiations with creditors in October, and we should be presenting the legislation at the beginning of October.”
Puerto Rico, which has a total of $72 billion in debt, is gearing up for debt restructuring talks. Debt negotiations may begin while the bill moves through the legislative process, said Melba Acosta, president of the Government Development Bank.
Acosta had said earlier that she expected to begin debt restructuring talks in mid-October. Puerto Rico is seeking a single, comprehensive exchange transaction.
The control board would have five members who would serve for staggered four-year terms, according to the fiscal and economic growth plan.
“There are some names that have been mentioned, but no determination as to who would be the members has been made,” Suarez said. “The governor will be naming the members, and the Senate would confirm them, although the latter aspect is still under discussion.”
The members must have at least 15 years of experience in the financial world or related areas, and cannot have been public employees during the last five years, said Puerto Rico Justice Secretary Cesar Miranda, a member of the working group.
“There could be recommendations from the federal government,” Miranda said. “Creditors should be at least allowed to consent that the members being appointed are people with integrity.”
Puerto Rico Governor Alejandro Garcia Padilla shocked investors in June when he said the island’s debt was unpayable, and the U.S. commonwealth in August skipped most of the payment on a bond. (Reporting by a contributor in San Juan; writing by Jessica DiNapoli; Editing by Christian Plumb)