Zaragoza to ask Board to put Treasury in receivership

Zaragoza to ask Board to put Treasury in receivership

Puerto Rico Treasury Secretary Juan Zaragoza.
Treasury Secretary Juan Zaragoza will ask the Financial Oversight and Management Board for Puerto Rico to place the agency he heads under receivership, to prevent anyone — including himself — from signing off on significant material transactions that could affect the government’s coffers. The no-holds-barred government official said Wednesday that, as it stands, it is “too easy for millions to be given away to special interests through negotiations or by signing papers.” “I’m convinced that the Board will be good for Treasury. We believe the Board should place Treasury under receivership because, we may be able to do a lot to improve our condition, but Treasury is the weakest link,” he said. He said without the Board’s tight supervision, Treasury officials — both present and future — could negotiate so-called “closing agreements” with parties to wipe away millions in owed taxes. One of the most notorious closing agreements was reached in 2012, under which the government was called to refund the now defunct Doral Bank for tax over-payments estimated at about $230 million. Under the current administration, the credit was invalidated and the case went to court, where the bank eventually lost its bid to uphold that benefit. “That would have cost the same as the rebate we gave our elderly taxpayers a few years back. You leave people unsupervised and they can erase as much as $1 billion from the books,” he said, adding, “the Board has to have the malice to see that in the wrong hands, Treasury could bring the island down.” If the Board goes along with the request, Treasury would join a list of six other agencies placed “under watch” last week, namely the Government Development Bank, the Highways and Transportation Authority, the Puerto Rico Electric Power Authority, the Puerto Rico Aqueduct and Sewer Authority, the University of Puerto Rico, and the Public Corporation for the Supervision of Puerto Rico Cooperatives All of those agencies are required to submit individual fiscal plans and refrain from making “material decisions” — including issuing new debt — without prior authori…

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