World enews: Federal control board supervising Puerto Rico’s finances has a new director

SAN JUAN, Puerto Rico — A federal control board that supervises Puerto Rico’s finances announced a new executive director on Thursday after its last one stepped down in April following a historic debt restructuring for the U.S. territory.

Robert Mujica, budget director for New York state, is expected to assume his new role in January. He previously served as chief of staff to the U.S. Senate majority leader and was secretary to the Senate finance committee.

“It’s exciting work, it’s fun work,” he said in a phone interview. “I wasn’t looking to leave here.”

But the board reached out to Mujica, who sought to return to an island where he spent summers as a child and whose parents and grandparents are from the north coastal town of Arecibo.

“It is an enormous challenge,” he said of the new job. “For me to be part of the solution is exciting.”

The U.S. Congress created the board in 2016, a year after Puerto Rico announced that it was unable to pay more than $70 billion of public debt accumulated through decades of mismanagement, corruption and excessive borrowing.

In 2017, Puerto Rico filed for the largest municipal bankruptcy in U.S. history. Nearly five years later, a federal judge in January approved a plan to slash the territory’s debt and allow the government to start repaying creditors. Much of the debt has been restructured, but the $9 billion held by Puerto Rico’s power company — the largest debt of any government agency — has yet to be resolved after mediation talks failed. Litigation has since resumed.

Mujica, who replaces Natalie Jaresko, will be in charge of a board that is overseeing the bankruptcy-like process and will remain in place until Puerto Rico’s government approves four consecutive balanced budgets.

David Skeel, the board’s chairman, said last year’s budget might qualify as balanced, but the board can’t confirm that until it receives the audited financials. So far, auditors are still reviewing Puerto Rico’s 2019 budget.

Mujica declined to say whether he agrees with all the board’s moves in recent years or comment on the actions of Puerto Rico’s governor, with some acrimonious disagreements between the two ending up in court. He also declined to share his priorities, saying he needs to first get up to speed on everything.

Overall, Mujica said his goal is to support fiscal responsibility, promote long-term stability and ensure that revenues are consistent with spending needs. He noted that economic development is important but said it’s unattainable if the island has an unstable budget or economy.

“It’s a lot easier to govern year-by-year, but when you do that, you’re not ready for the long term,” he said. “The common goal is to serve the people on the island. There may be differences at times on how to achieve that. My role is to try and bridge that and come to an agreement as often as possible.”

Mujica will join the board as a growing number of Puerto Ricans decry the austerity measures it has implemented amid demands for an economic development plan for an island still facing financial woes and struggling to recover from hurricanes that hit in recent years.

Critics also have noted that the ongoing bankruptcy process has cost Puerto Rico around $1 billion in consultants, lawyers and other expenses, and that the board’s director earns $625,000 a year.

Skeel said the board unanimously chose Mujica after a search firm interviewed several dozen candidates, about five or six of those were then interviewed by the board.

“I cannot overstate how excited I am about Robert coming on board,” he said. “He has the perfect background for what we have left” to do.