Three-fifths of residents of central Florida of Puerto Rican origin accept that Puerto Rico’s current political status — territory, but sometimes misleadingly called “commonwealth” — cannot be improved, according to a recent professional poll.
The number is more than twice as many as want changes in the current status, the status course advocated by the territory’s “commonwealth” party which very narrowly won control of the insular government from the statehood party in 2012.
The 59% who recognized “[t]hat the Federal government has already said that fixing territorial status is impossible” was 31% greater than the 28% who wanted modifications made in a status that they acknowledge is a territory status.
The 59% also agreed in the scientific survey “that statehood is the best solution for Puerto Rico.”
The support for statehood was consistent with responses to other questions.
- 58% said that the territory should be made a State based on a plebiscite that the Commonwealth government held along with the elections in 2012. In that vote, 54% of Puerto Rican voters rejected territory status and 61.2% chose statehood among the possible alternatives that have significant support in Puerto Rico.
- Support for statehood in the poll grew to 64% when only alternatives to territory status were considered. A mere 18% chose nationhood in an association with the U.S. that either nation could end. The status was picked by 33.3% of Puerto Ricans in the 2012 insular plebiscite. Independence was favored by eight percent in the poll but by only 4.5% in Puerto Rico’s plebiscite.
- 81% would be proud if Puerto Rico became a State, 60% “strongly” and 21% “somewhat.” Only 15% would not be proud, nine percent strongly and six percent somewhat.
- 76% would welcome the Federal government providing for a vote in Puerto Rico on statehood: 53% would “strongly approve;” 23% would “somewhat approve;” and seven percent each would somewhat or strongly disapprove.
Puerto Rico’s statehood party last weekend resolved to seek the admission of the territory as a State of the U.S. based on the 2012 plebiscite.
Party members in the insular Senate this week proposed legislation for an election of U.S. senators and representatives, a method of seeking statehood pioneered by Tennessee and followed by other territories that became States.
Last year, party President Pedro Pierluisi, the Commonwealth’s representative to the Federal government, proposed a bill to enable Puerto Rico to be admitted as a State if Puerto Ricans vote for the status again. As the sole voice of the territory of 3.6 million people in the U.S. House of Representatives, he led 131 other members of the House in sponsoring the legislation. Three U.S. senators led by Martin Heinrich (D-NM) introduced a companion bill.
Puerto Rico Governor Alejandro Garcia Padilla and most of his “commonwealth” party members who control the territorial Legislative Assembly oppose a vote on statehood.
A few party leaders, however, do not. They include Garcia Padilla’s predecessor as party president, former insular House of Representatives Minority Leader Hector Ferrer, who has hinted that he may challenge Garcia for the governorship in 2016.
The “commonwealth” party leadership is united, though, in its refusal to accept the validity of the 2012 plebiscite. It supported the current territory status rejected in the plebiscite and failed in its effort to defeat statehood.
The “commonwealth” party’s refusal to accept the plebiscite’s results led to President Obama proposing and the Congress in January passing legislation for a plebiscite on status options that can resolve the question of the territory’s ultimate status and do not conflict with the Constitution, laws, and policies of the United States.
Puerto Rico’s Elections Commission would make a proposal for the options but the U.S. Department of Justice would have to find that the alternatives meet the requirements of the law. The Justice Department approval would make it awkward for a losing party to dispute the results.
The results of the poll are of national political importance. Florida is a State so closely divided between Democrats and Republicans that it can be a ‘swing’ State in presidential elections. It is so populous that it can also swing the elections one way or another. And voters of Puerto Rican origin are considered by news and political analysts to be the “swing vote” of this swing State.
A highly regarded national survey research company, Voter Consumer Research, conducted the poll. Although the firm only polls for Republicans when it does political surveys, it has been praised for the accuracy of its data by two of the most influential national political analysts not identified with a political party, Charlie Cook and Stuart Rothenberg.
Voter Consumer Research interviewed residents of Florida living in the ‘I-4 corridor,’ which runs from he Orlando area to Tampa, from August 20th to September 4th. Much of Florida’s population of Puerto Rican origin lives in this area. Ninety-two percent of those questioned were registered voters in the State.
The survey has a margin of error of plus or minus 4.9% — an amount that would hardly matter given the lopsided nature of the results.
A new Website, <a href="http://www.pr51st.com" rel="nofollow">www.pr51st.com</a>, released the poll.
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By Dow Jones Business News, October 10, 2014, 05:37:00 PM EDT
By Aaron Kuriloff
Puerto Rico on Friday sold $900 million of short-term notes bearing interest rates of about 7.75%, its first debt offering since the passage of a law paving the way for a possible restructuring of some of its agencies' obligations.
Among the lenders were J.P. Morgan Chase & Co., Bank of America Corp. and Morgan Stanley, according to a news release issued by the U.S. commonwealth.
The relatively high interest rate reflects concerns that Puerto Rico could run out of cash as its economy struggles. A widely watched index measuring economic activity in August fell to its lowest level in 20 years. In comparison, a bond backing bankrupt Detroit's development authority, which matures in July, traded in recent days at a yield of about 4.25%. Treasury bills maturing in June 2015 yield about 0.05%.
"This transaction will support the Commonwealth's ongoing liquidity as we continue to focus on guiding Puerto Rico on a path to fiscal health and stability," Treasury Secretary Melba Acosta said in the release.
The deal "means Puerto Rico will live another day," said Robert Donahue, managing director at the research firm Municipal Market Advisors. The sale "should allow the government to breathe easy until the end of the fiscal year. The banks will continue to have to monitor the cash burn at the central government level to ensure they can get repaid by next June."
Puerto Rico collects the bulk of its tax receipts in the fourth quarter of its fiscal year, which ends on June 30, Mr. Donahue said. The commonwealth often taps banks for debt financing that is backed by this anticipated tax revenue.
But its financial woes have complicated and raised the costs of what in past years has been a routine annual transaction. For example, these latest notes are subject to New York law, a new protection for the banks, said Shawn O'Leary, senior research analyst at Nuveen Investment Management LLC.
The high interest rate on the Puerto Rico notes shows "how thin the market for Puerto Rico paper is at this point," Mr. O'Leary said.
The sale marks the first time Puerto Rico has borrowed since passing a law in June that allowed some agencies such as the island's power, water and highway authorities to restructure their debts. Those three agencies have almost $20 billion in outstanding debt, according to analysts at Barclays. The law doesn't apply to Puerto Rico's general obligation or sales-tax bonds.
The notes sold Friday are guaranteed by the commonwealth and come due in June, with $700 million carrying an annualized interest rate of 7.75% and another $200 million structured as a revolving line of credit and bearing an interest rate of 7.55% over the London interbank offered rate, or Libor.
The island's Government Development Bank will use the $900 million to buy the same amount of tax- and revenue- anticipation notes from the commonwealth. The bank also will buy another $300 million in notes, as it has in prior years, bringing the total size of the deal to $1.2 billion, according to the release.
In total, Puerto Rico has about $73 billion of debt, which is widely held by mutual funds, hedge funds and individuals. The island needs to tap credit markets again to cover expenses, including more than $1.2 billion in debt service due this year, Mr. Donahue said.
By selling new bonds, Puerto Rico buys itself time to restart the economy, plug its budget deficit and restructure the Puerto Rico Electric Power Authority, which owes about $9 billion.
In March, Puerto Rico tapped public credit markets, borrowing $3.5 billion at an interest rate of 8%. That sale, which was seen as crucial to the new administration of Gov. Alejandro Garcia Padilla, came after major credit-rating firms downgraded Puerto Rico to junk status.
Write to Aaron Kuriloff at <a href="mailto:aaron.kuriloff@wsj.com">aaron.kuriloff@wsj.com</a>
(END) Dow Jones Newswires 10-10-141737ET Copyright (c) 2014 Dow Jones & Company, Inc.
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Alejandro Garcia Padilla, governor of Puerto Rico, is under attack by American Future Fund. (GDA via AP Images)
A politically active nonprofit that spent more than $25 million on ads to help Republicans in the 2012 elections has stepped into a messy dispute between the government of Puerto Rico and a bank that claims the commonwealth owes it money — not something that fits neatly with the group’s activities in previous election cycles.
Doral Financial Corp., which has had financial and regulatory woes in recent years, sued the Puerto Rican government in June for voiding a 2012 agreement to pay the company nearly $230 million. The money is due as a tax refund in connection with Doral overstating its earnings from 1998-2005, according to a lawyer for the firm.
In Doral Financial Corp. v. Commonwealth of Puerto Rico, the company demands reinstatement of the agreement, which was signed by the government under the previous governor, Luis Fortuno, a Republican. Administration officials under Democratic Gov. Alejandro Garcia Padilla, who took office in 2012, nullified the contract.
Taking Doral’s side, American Future Fund is sponsoring an ad that goes after Padilla with a sledgehammer and ran in Politico on Thursday and the Wall Street Journal today, Superimposed on a large photo of the governor are the words “Puerto Rico’s Culture of Corruption.” It goes on to accuse him of running the country in a way that resembles “the rogue governments” of Argentina and Venezuela; turning Puerto Rico into a major transit point in the drug trade; destroying the rights of creditors and pensioners with “an illegal bankruptcy law”; and “trumping up charges against a private bank,” among other misdeeds.
Why does AFF suddenly care about the interests of a bank in a U.S. commonwealth? And why now, since Padilla isn’t even up for re-election until 2016?
The timing question is easiest to answer: The bank’s lawsuit heads to court next week, on Sept. 17. As for motive, that’s less clear. Messages left on AFF’s phone asking whether it was being paid for its involvement on behalf of the bank went unanswered.
But why? A possible answer, Padilla’s allies suggest, is that Doral hired a top Republican lobbying and PR firm, DCI Group, to help make its case earlier this year. DCI is well-known in GOP circles and to AFF, which previously contracted with a fundraising firm run by a former top executive at DCI.
“The links between Doral and AFF have become clear to us,” said Luis Vega Ramos, a member of the Puerto Rico House of Representatives, who accused Doral and its surrogates of “trying to prevail through the dissemination of false information” about the commonwealth. Vega Ramos, who is leading a legislative investigation of the circumstances leading to the original agreement, noted that the previous Treasury Secretary went to work as an executive vice president for Doral shortly after the deal was struck. In addition, he said in an interview, Doral’s claims rest on tax filings later shown to be inaccurate, and if anything the company should have been given a tax credit of a much lesser amount, rather than a reimbursement.
Like many groups in the Koch network, Iowa-based AFF has been far less involved helping federal candidates in this election cycle than in previous years. And the Center to Protect Patient Rights, which doled out hundreds of millions of dollars to those groups, seems to have virtually vanished from the scene. American Commitment, also a Koch-linked group, has also pared back its spending on federal elections, but has been extremely active in fighting proposed FCC rules on net neutrality, which it calls a “full federal takeover” of the Internet.
Both AFF and CPPR were involved in a scheme to funnel funds into two California ballot issue campaigns in 2012; the California Fair Political Practices Commission uncovered the scheme, in which money was passed through several 501(c) groups that don’t have to disclose their donors, and said it was a form of “money laundering.”
AFF is not required to disclose the names of its donors. But IRS documents filed by it and other organizations showed that it received almost all its 2012 funding — 92 percent — from two groups that were hubs of the network of 501(c) organizations closely linked to the conservative billionaire Koch brothers: The Center to Protect Patient Rights provided $49.2 million of AFF’s $67.9 million in income that year, while Freedom Partners Chamber of Commerce gave another $13.6 million.
Whether DCI Group, Doral or anyone related to those companies is helping prop up AFF this year is unknown, and may remain that way. However, AFF has become involved in only three congressional races in the 2014 cycle — two House and one Senate. The group has also spent money to help a Republican candidate for governor in Nebraska.
