An unconstitutional oversight board for Puerto Rico?

After months of endless hearings in Congress, agonizing negotiations and shuttle diplomacy back and forward to San Juan and Washington, Puerto Rico’s monumental default on its debt is here.

On Monday, Puerto Rico defaulted on the debt service payment of its Government Development Bank notes ($422.8 million), and in 8 weeks from now the island will in all certainty default on its constitutionally guaranteed General Obligation bonds ($779.9 million).

{mosads}In anticipation to this fiscal catastrophe, and its accompanying collateral damage for the average resident of Puerto Rico and pensioners in the mainland, the House’s Committee on Natural Resources under the leadership of Chairman Rob Bishop (R-UT) unveiled the “Puerto Rico Oversight, Management and Economic Stability Act” (PROMESA). Among other measures, PROMESA provides for the establishment of the Puerto Rico Financial Oversight and Management Board (the “Board”), consisting of members appointed by the president (without the advice and consent of the Senate), which would effectively eviscerate the constitutional powers of Puerto Rico’s political branches, duly elected by the Puerto Rican people in the exercise of their fundamental right to vote.    

PROMESA’s Board would be appointed pursuant to Congress’ plenary power under the U.S. Constitution’s Territory Clause (U.S. Const. Art. IV, Sec. 3). 

Even assuming, in arguendo, that the U.S. Supreme Court in Puerto Rico v. Sánchez Valle finds that Puerto Rico is not a “separate sovereign” for purposes of the Double Jeopardy Clause that does not necessarily answer the question of whether Congress’ plenary power over Puerto Rico is without limits.

As the Fuller Court found well over a century ago in the so-called “insular cases,” Congress has no authority under the Constitution to abrogate the fundamental rights of the inhabitants of the unincorporated territories. And Congress’ unilateral decapitation of Puerto Rico’s internal constitutional structure, without the consent of the Puerto Rican people, will no doubt tear to shreds the fundamental right to self-government of the 3.4 million U.S. citizens residing on the island.

Congressional action in this direction, arguably, infringes the due process protections of the people of Puerto Rico under the U.S. Constitution because in approving the Puerto Rico Constitution on March 3, 1952, “as a compact with the people of Puerto Rico,” Congress did confer on the people of the Commonwealth vested political rights with respect to their then new internal self-government arrangement. It is precisely for these reasons that the Oversight Board’s structural design does not seem to pass constitutional muster. 

It is well settled that the concept of “government by consent of the governed,” embodied in a republican form of government, constitutes a foundational principle of the American constitutional experiment. 

Not surprisingly, in transmitting the Puerto Rican Constitution to Congress, on April 22, 1952, President Truman announced, 

“Fully recognizing the principle of government by consent, [this] Act was adopted by the Congress of the United States “in the nature of a compact.” By its own terms, the Act could become effective only when accepted by the people of Puerto Rico in a referendum.”

President Truman’s declaration was simply mirroring the language the Framers had already used in the Declaration of Independence: “…Governments are instituted among Men, deriving their just powers from the consent of the governed.”; the Preamble to the U.S. Constitution, “(to) secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution”; and Lincoln’s Gettysburg address, “(that) government of the people, by the people, for the people shall not perish from the earth.”

While it is clear that in 1952 Congress did not devolve sovereignty to Puerto Rico, in the international sense, it seems reasonable to suggest that Congress did intend for this new instalment of internal self-government to remain unaltered unless both parties agreed to modify it on the basis of their mutual consent.

From a policy perspective, the debt restructuring mechanism included in the bill is a step in the right direction. This notwithstanding, it is now time to return to the drawing board in order to craft a consensual arrangement whereby the voice of the Puerto Rican people is finally heard.  

Rafael Cox Alomar is a professor of law at the David A. Clarke School of Law in Washington, D.C.