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How Many Financial Control Board Members Does It Take To Turn on a Light Bulb in Puerto Rico?

Failures of the power grid are common in Puerto Rico, but the blackout on June 12 left 350,000 homes and businesses in the San Juan area in the dark, according to the New York Times on June 23. The semi-privatized electric utility is usually not very quick with repairs, but always ready with excuses of too much rain, wind, heat (and one time they even blamed cats).

Over the years the public utility, the Puerto Rico Electric Power Authority (PREPA) has been used as a dumping ground for bad debt, but in 2017 the island of Puerto Rico was declared bankrupt and the non-elected “Financial Control Board” was put in charge of all financial issues. (Wall Street bankers viewed public debt from Puerto Rico as the most lucrative debt, because there were no federal, state, or local taxes, and they wined and dined local leaders to agree to ever increasing debt levels.) Driven by their monetarist instincts, the Control Board wanted to fully privatize the public electric utility, but the utility’s debt created legal complications. Instead, the Control Board put the utility under the control of what some locals call a three-headed monster.

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