Puerto Rico Utility May Default on July Payment, Moody’s Says

Puerto Rico’s Electric Power Authority, the island’s main energy supplier, may fail to pay bondholders about $400 million in principal and interest on July 1, according to Moody’s Investors Service.

The junk-rated utility, called Prepa, has about $678 million of restricted and non-restricted cash, the New York-based rating company estimates. That won’t be enough to cover both the July 1 payment to bondholders and continue a $300 million capital-investment plan, which includes converting facilities to burn natural gas rather than oil, according to a Moody’s report released Monday.

“Without access to the capital markets, we believe Prepa will try to preserve as much cash as possible in order to safely run its business and complete its capital spending program,” analyst Richard Donner wrote in the report. “For these reasons, we believe that Prepa will likely enter into a distressed exchange agreement by the end of June or will default on its July 1 payment.”

The utility signed an agreement in August with bondholders, creditors and insurance companies that put off payments on bank loans through March 31. Prepa is negotiating with the group to extend that agreement through at least June 30, according to two people with knowledge of the discussions.

Abimael Felix, a spokesman for Prepa, didn’t immediately respond to an e-mail seeking comment.

To contact the reporter on this story: Michelle Kaske in New York at mkaske@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Mark Tannenbaum, William Selway

by Michelle Kaske

Puerto Rico Utility May Default on July Payment, Moody’s Says

Puerto Rico Human Rights Situation to be Denounced before OAS

San Juan, Mar 14 (Prensa Latina) For the first time, the Interamerican Commission of Human Rights (ICHR), attached to the Organization of American States (OAS) will hold in Washington a public hearing on the situation in Puerto Rico, it was known here today in this capital. The organization that has historically evaded petitions so the Puerto Rican reality under the colonial regime imposed by the United States is known, pretends to listen next Tuesday in its Washington headquarters the report of different Puerto Rican groups that advocate for human rights.



Among the main topics that Puerto Rican organizations will present to the attention of the ICHR, is the case of political prisoner Oscar Lopez Rivera, who has been in jail for 33 years in the United States, 12 of them in solitary, for fighting for his homeland�s independence.



Lopez Rivera, 71, is condemned for seditious conspiracy due to the link he had with the already disolved Armed Forces for National Liberation (FALN) of Puerto Rico, which operated in the 70 and 80 decades of the past century in New York and Chicago.



Another issue to be presented is the situation of women rights, the community LGBT, migrants, racism, xenophobia, human traffic and child abuse, included their right to an inclusive education of excellence.



Another issue to be denounced is the U.S. pretension to apply the death penalti in this Caribbean island they invaded in 1898, despite being rejected by the people and what is established by the Puerto Rican constitution.



The ICHR has the power to emit decisions and statements on the violation of human rights in the United States, including Puerto Rico, which since 1952 is an associated free state to the U.S., allowing it to manage some domestic areas.



The government of Puerto Rico will have to respond publicly to the denounciations presented, what is considered an opportunity to adopt a plan of actions that attends seriously the charges of discrimination, institutional violence, inequality and lack of judicial response on such issues.

Puerto Rico Human Rights Situation to be Denounced before OAS

The Man Who Stole Puerto Rico

When we think of robber barons, the usual suspects include John D. Rockefeller, J.P. Morgan and Cornelius Vanderbilt.

But one robber baron has gone underappreciated: the man who stole Puerto Rico.

His name is Charles Herbert Allen, the first U.S. civilian governor of Puerto Rico. He served only 17 months, but that was all he needed to perform one of the most spectacular crimes of the 20^th century.

By the time Allen left Puerto Rico, the entire island was a crime scene.

Allen hailed from Lowell, Massachusetts—famous for child labor and textile mill sweatshops. Though he never served in the armed services, he loved to dress in military regalia and have people address him as “colonel.”

(Allen in Lowell, MA)

He arrived in Puerto Rico on April 27, 1900 like a Roman conqueror with a naval cannon salute, the 11th U.S. Infantry Band and a division of armed soldiers behind him.

He marched through San Juan and into the Governor’s mansion.

The mansion was gift-wrapped. Allen delivered his inaugural address behind the largest, most imperial flags that Puerto Ricans had ever seen.

(Via the author)

It rained heavily that day—as if God were shedding tears over the island itself.

Allen had been a congressman, a Navy bureaucrat and commissioner of prisons for Massachusetts. But in Puerto Rico, he finally became a businessman.

He raided the island treasury by raising taxes, withholding municipal and agricultural loans, and freezing all building repair and school construction funds.

He subsidized US-owned farm syndicates and issued no-bid contracts to US businessmen, for roads built at twice the old cost.

He created new offices and salary lines—all staffed by U.S. bureaucrats. By the time he left in September 1901, nealy all the 11 members of the governor’s Executive Council were U.S. expatriates, and half the appointed offices in the government of Puerto Rico had gone to visiting Americans—626 of them at top salaries.

But Allen’s real interest in Puerto Rico became apparent in his “First Report of the Governor of Porto Rico.” Here are some of his entries:

The yield of sugar per acre is greater than in any other country in the world. (p. 99)

A large acreage of lands, which are now devoted to pasturage, could be devoted to the culture of sugar cane. (p. 39)

Molasses and rum, the incidental products of sugar cane, are themselves sufficient to pay all expenses of the sugar planters and leave the returns from his sugar as pure gain. (p. 39)

The cost of sugar production is $10 per ton cheaper than in Java, $11 cheaper than in Hawaii, $12 cheaper than in Cuba, $17 cheaper than in Egypt, $19 cheaper than in the British West Indies, and $47 cheaper than in Louisiana and Texas. (p. 40)

This was no mere “First Annual Report” to the president of the United States. It was a business plan for a sugar empire, and Allen quickly staked his claim. A few weeks after handing in this report, on September 15, 1901, Allen resigned as governor and headed straight to Wall Street, where he joined the House of Morgan as vice president of both the Morgan Trust Company and the Guaranty Trust Company of New York.

Allen built the largest sugar syndicate in the world, and his hundreds of political appointees in Puerto Rico provided him with land grants, tax subsidies, water rights, railroad easements, foreclosure sales and favorable tariffs.

(Sugar cane train in Arroyo, Puerto Rico)

By 1907 Allen’s syndicate, the American Sugar Refining Company, owned or controlled 98% of the sugar processing capacity in the United States and was known as the Sugar Trust. By 1910 Allen was Treasurer of the American Sugar Refining Company, by 1913 he was its President and by 1915 he sat on its Board of Directors.

By 1930, Allen and U.S. banking interests had converted 45 percent of all arable land in Puerto Rico into sugar plantations. These bank syndicates also owned the insular postal system, the entire coastal railroad and the international seaport of San Juan.

(Sugar cane being loaded onto a train for transportation to the refinery. Near Ponce, Puerto Rico. LIBRARY OF CONGRESS)

By 1934, 80 percent of all the sugar cane farms in Puerto Rico (and their underlying land) were owned by a U.S. banking syndicate. Allen, and the American Sugar Refining Company, set the template for all of them.

Today the American Sugar Refining Company is known as Domino Sugar.

As the first civilian governor of Puerto Rico, Allen used his governorship to acquire an international sugar empire, and a controlling interest over the entire Puerto Rican economy.

Charles Herbert Allen. The first civilian governor. The man who stole Puerto Rico.

Nelson A. Denis is a former New York State Assemblyman and author of the upcoming book, War Against All Puerto Ricans.

The Man Who Stole Puerto Rico