The Jubilee Blog

Puerto Rico Board Meets on Anniversary of Debt Legislation; Board Rejects Power Company Debt Deal

By Abby Wilhelm

 

Puerto Rico's oversight board is holding its eighth public meeting in San Juan at the Sheraton Hotel Convention Center. In executive session on Tuesday, the board rejected a debt restructuring deal between bond holders and‎ Puerto Rico's power company known as PREPA.

“The PREPA deal was a bad deal and the board was right to reject it,” noted Eric LeCompte, Executive Director of Jubilee USA. LeCompte testified to Congress and the oversight board on the ‎island's debt crisis. "Puerto Rico needs significant debt relief and the PREPA deal fell short of a serious debt haircut."

The PREPA restructuring now likely moves to the Title III bankruptcy process. The process was created by Puerto Rico debt crisis legislation.

“The Title III bankruptcy process is important because it can deal with all of Puerto Rico's debt. All of the island's debt should be restructured in this one comprehensive process that can deeply cut the debt,”‎ said LeCompte.

This week, Judge Laura Taylor Swain continued the Title III bankruptcy proceedings and earlier this month appointed a team of federal judges to act as mediators in the bankruptcy process. The team will meet with representatives of Puerto Rico and its creditors for the first time on July 12.

“Puerto Rico's debt has a human cost. Nearly 60% of kids on the island live in poverty,”‎ noted LeCompte who serves on United Nations debt expert groups. "Congress made a promise to reduce child poverty on the island and the debt needs to be restructured in ways that will lift kids out of poverty."

The oversight board meets on the one year anniversary of President Obama signing a law that created the board and established a Congressional task force to make recommendations to reduce child poverty. The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) established the Title III bankruptcy process and protections for Puerto Rico from debt lawsuits.

 

Legislation Combats Shell Company Corruption

By Abby Wilhelm

Representatives Carolyn Maloney (D-NY) and Peter King (R-NY) heralded the House introduction of the Corporate Transparency Act at a press conference at the House Triangle. The bill aims to prevent shell companies from hiding corrupt and criminal activity. ‎

“Dictators use financial secrecy to steal money from their people and human traffickers use shell companies," said Eric LeCompte Executive Director of the religious development group Jubilee USA. "We need Congressional action that protects vulnerable communities from being exploited through financial secrecy."

The legislation requires US corporations to disclose in a private registry that is available to law enforcement, the names of the owners who benefit from a business.

"The leadership of Representatives Maloney and King is critical as we work to promote a more transparent financial system,”‎ noted LeCompte. 

 

Jubilee Submits NAFTA Renegotiating Recommendations

By Abby Wilhelm

Monday was the deadline to send recommendations on NAFTA renegotiation objectives to the US Trade Representative, Robert Lighthizer. Jubilee USA's Eric LeCompte and Jennifer Hojaiban sent a letter urging that trade negotiations ‎promote development, fair dispute arbitration and protections for vulnerable people.

The full letter is pasted below and linked here 

June 12, 2017

Robert E. Lighthizer
United States Trade Representative
600 17th Street NW
Washington, DC 20508

Dear Mr. Lighthizer,

We write to you today on behalf of more than 650 national and local faith communities across our country. As the United States begins renegotiating the North American Free Trade Agreement (NAFTA), Jubilee USA urges that our negotiating objectives protect vulnerable communities, reduce poverty and promote inclusive economic growth.

Trade agreements can be powerful tools in reducing global poverty and hunger. Agreements should promote economic growth and development; include only dispute mechanisms that are fair and participatory; and protect access to medicines for the poor. Specifically, Jubilee USA encourages the following:

 • Create Fair and Democratic Dispute Mechanisms:
Investor-State Dispute Settlement (ISDS) mechanisms allow companies to sue countries over disputes related to trade agreements. In Chapter 11 NAFTA, an investor of one NAFTA party can sue any party country before an arbitration tribunal. NAFTA's Chapter 11 creates a problematic method to resolve disputes by creating a process that can undermine domestic laws with substantial impact on the residents of each country. Predatory financial firms are known to use the tribunals to sue countries in economic distress to collect on debts purchased on the secondary market. We are also concerned about the use of ISDS tribunals to discourage governments from acting for the public welfare on a range of issues including the environment, labor and health.

Recommendation:
If NAFTA's Chapter 11 remains in a renegotiated agreement, Jubilee USA supports creating a new dispute mechanism that is transparent, accountable and includes equal respect for human and labor rights, creation care and promotion of the public good. This would include a thorough review and reframing of the causes of action to ensure these panels respect and defend not only the property rights of investors but the right of all peoples to work and live in clean, safe and secure environments. The status quo, with enforceable rules for property rights and flexible guidelines for other important human rights, is incompatible with equitable development. Moreover, sovereign debt should be exempted from ISDS authority.

 • Protect Access to Medicines:
Jubilee USA is deeply concerned about trade policies that would raise the cost of life-saving medicine for poor communities. Our debt relief victories won billions of dollars for health care around the world. Trade deals that make it harder for communities to access affordable generic medications undermine those victories.

Recommendation:
Jubilee USA opposes provisions that delay the availability of price-lowering generic competition for pharmaceuticals, including requirements for secondary patents, data obligations that grant additional monopoly protection to pharmaceutical companies, mandatory patent term extensions, and requiring new forms of intellectual property enforcement.

• Promote Economic Growth and Development:
NAFTA increased trade among the United States, Canada and Mexico, but it did not expand fair economic growth, particularly for Mexico, the only developing nation in the agreement. Including sustainable development goals in trade agreements can increase broad participation in economic decision-making.

Recommendation:
Jubilee USA supports considering the implications of trade provisions in NAFTA and other trade agreements on developing countries and supports building the capacity of developing countries to be able to fully benefit from the availability of increased trade.

We are eager to continue to work with you to ensure that all trade agreements and economic policies benefit all people, particularly the most vulnerable. On behalf of our national religious coalition, we express our gratitude for your public service. We hold you and all who work with you in our prayers.

Sincerely,

Eric LeCompte
Executive Director

Jennifer Hojaiban
Deputy Director

House Financial Choice Act Repeals Responsible Lending and Anti-Corruption Measures

The House passed the Financial Choice Act repealing multiple‎ measures enacted by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. 

“This legislation erodes protections that are meant to prevent future financial crisis. It also encourages high-risk speculative investment, a cause of financial crisis,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA. “This act removes oversight of payday lending and too big to fail banks."

‎The legislation that passed the House weakens the regulatory power of the Consumer Financial Protection Bureau (CFPB) over big banks and payday lending.

Another section of Dodd-Frank repealed by the legislation is Section 1504 or the "Cardin-Lugar" measure. Section 1504 requires reporting by oil, gas and mining companies of payments they make to governments in countries where they operate. Earlier in the year, Congress voted to delay implementation of Section 1504.‎

“I'm deeply concerned by attacks on transparency measures that protect vulnerable populations both at home and abroad,” noted LeCompte who serves on United Nations expert groups that focus on responsible finance. “While it's unlikely this legislation will pass the Senate, the Senate must reject any measure that fuels predatory lending, corruption and speculative risky investment.‎"

House Passes Financial Choice Act

The House of Representatives passed the Financial Choice Act and repealed ‎several measures enacted by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. In passing the Financial Choice Act, the House rolled back requirements for oil, gas and mining companies to disclose information on payments they make to government where they operate. 

Eric LeCompte, Executive Director of the religious development group Jubilee USA, releases the following statement: 

“This legislation attacks protections for poor people around the world and consumers in the United States.

"‎I'm concerned about the rollback of transparency measures in the Financial Choice Act. This legislation weakens protections for those who take out pay day loans. This legislation prevents people in the developing world from knowing if someone is bribing their government."

 

Global Treaty Closes Corporate Tax Avoidance Loopholes

76 countries and jurisdictions committed to closing corporate tax loopholes at the Organization for Economic Cooperation and Development (OECD) in Paris. The agreement builds on efforts from the OECD-G20 Base Erosion and Profit Shifting (BEPS) action plan.

Eric LeCompte, Executive Director of the religious development group Jubilee USA, releases the following statement:

“The agreement is a critical step forward for transparency and tackling corporate tax avoidance.

“The tax pact acknowledges that we are dealing with a problem that transcends borders and we need solutions that can cross borders.
‎
"Early on, the United States was a leader in moving forward this process to tackle tax avoidance. Unfortunately the US didn't sign the agreement. We encourage the United States to rejoin this agreement and support other efforts that promote financial transparency."