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Puerto Rico Governor Set to Quit After Protests, Papers Say

Puerto Rico Governor Ricardo Rossello is poised to resign after two weeks of protests drew tens of thousands to the streets of San Juan, according to two of the island’s largest newspapers. His departure would plunge the bankrupt island deeper into uncertainty as it struggles to revive a recession-scarred economy and rebuild from 2017’s devastating Hurricane Maria.
The decision reported by El Nuevo Dia and Vocero would be an abrupt about-face for an embattled governor who vowed to remain in office despite a furor set off by the disclosure of scandalous text messages. It would complicate Puerto Rico’s fitful recovery from the storm and its ability to cut crippling debts in the record-setting collapse that’s cast a shadow over the U.S. territory for the past two years. Justice Secretary Wanda Vazquez would be next in the line of succession, as there is no confirmed secretary of state.
Efforts to reach the governor and officials of his New Progressive Party were unsuccessful early Wednesday.
The outcry was set off by a massive leak of chats among Rossello and his aides in which they disparaged his opponents in profane, sexist language and appeared callous to the struggles of ordinary Puerto Ricans. That came on the heels of the arrest of two of his former top aides and four others on federal charges of theft, money laundering and wire fraud. The officials were charged with steering contracts to favored companies, which reinforced protesters feelings that the government is rife with patronage and corruption.
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Ricardo Rossello
Over the past week, Rossello became increasingly unable to govern as tens of thousands of protesters flooded San Juan’s colonial quarter for evening protests, where they chanted, banged drums and vented at a chief executive depicted as a prisoner, mobster or goat on their placards. On Sunday, they celebrated a partial victory when Rossello stepped down as head of his New Progressive Party and said he wouldn’t seek a second four-year term in the 2020 election.
That failed to contain the outrage, and Rossello was further weakened by the resignation of key staff members. Since the disclosure almost two weeks ago of the text messages, the administration has lost its investment officer, press secretary and two fiscal agency heads -- one of whom lasted just five days. The governor’s chief of staff quit Tuesday night.
The parade of departures muddled the constitutional line of succession. It also threatened to strengthen the hand of a congressionally mandated fiscal oversight board that wields sweeping power to impose austerity measures and which represents the commonwealth in its bankruptcy. Two courts were set to hold hearings in the case Wednesday.
While Rossello has clashed with the board over the budget, such conflicts only underscored Puerto Ricans’ feelings of powerlessness and contempt for politicians whose profligacy drove the territory into ruin. On Tuesday, the board said in a statement that the street protests reflect “a justified crisis of confidence in government institutions.”
“The responsibility to restore integrity and efficiency to government lies with the elected officials,” it said. “Elected officials and government employees must understand and accept that their job is to serve the people of Puerto Rico, not insiders, special interests or their own political careers.”
The hundreds of text messages between Rossello and his aides triggered fury that contrite statements couldn’t dampen. In one, the governor’s former chief financial adviser joked about dead bodies piling up in morgues after Hurricane Maria, the storm that crippled the power system for weeks.
The broader anger stemmed from years of mismanagement, corruption and cutbacks, including the closing of hundreds of schools, as well as the halting recovery from the hurricane. The bankruptcy has left much of the power over the island’s recovery in the hands of the federal court, where the oversight board is planning to soon file a plan for cutting the debt. Retired government workers are also in limbo, uncertain about how their pension checks will be cut because Puerto Rico’s retirement system has run out of cash.

Graft Parade

The stage was set by a series of corruption allegations. The lurid texts were released days after the U.S. Justice Department announced the indictments of Rossello’s former education secretary and health insurance administration director. Rossello’s Treasury Secretary Raul Maldonado was fired last month after disclosing in a radio interview a federal investigation into influence peddling, issuance of fake licenses, destruction of documents and accessing privileged taxpayer records.
Prices on most Puerto Rico securities have held steady even amid the political turmoil as investors have grown accustomed to defaults, bankruptcies and destruction. General obligations with an 8 percent coupon and maturing in 2035 traded Tuesday at an average price of about 53 cents on the dollar, little changed from where they were before the indictments and leaked chats, according to data compiled by Bloomberg.
But the crisis has affected investment as Puerto Rico’s ability to woo business people “has definitely been impaired,” said Jose Ledesma-Fuentes, president and board chairman of Puerto Rico’s Chamber of Commerce.
“We have a lot of very key and crucial vacancies that need to get filled immediately,” he said.

Disappearing Officials

Rossello’s departure was preceded by that of his chief of staff, Ricardo Llerandi, who resigned Tuesday night. Press secretary Denisse Perez quit, as did the island’s secretary of state, Luis Rivera Marin. Chief investment officer Gerardo Portela said Sunday he would leave. Christian Sobrino, the head of the Fiscal Agency and Financial Advisory Authority who participated in the offensive chats, resigned this month. His successor, Jose Santiago Ramos, submitted his resignation Friday after a week. He’ll be off the job Aug. 16.
“There isn’t an adult running the day-to-day government,” said Rafael “Tatito” Hernandez, minority leader in Puerto Rico’s House of Representatives.
Union officials who represent rank-and-file commonwealth employees said the pandemonium at the top of the administration filters down. Workers are trying to stay the course.
“If you don’t have somebody in charge, things don’t run,” said Wilkin Lopez del Valle, a retired Education Department employee who is an official of the United Auto Workers. The group represents 6,000 public and private workers in Puerto Rico.
Workers fear the fallout, said Edmee Castellar, director of the Public Employees Union of Puerto Rico, which represents 11,000 workers and retirees at nine agencies.
“At any moment we will be affected by the government decisions that are still pending,” she said. "The governor is not communicating with anyone, and we don’t know who will be appointed in those positions."
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