By Gustavo Concepcion-Cordero

            Puerto Rico’s return to the promised land suffered yet another roadblock. In early August 2025, President Trump removed five of the seven members of the federally imposed Financial Oversight and Management Board.[1] In 2016 as a result of Puerto Rico’s $70 billion debt, Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).[2] Congress intended this Act to provide a method for Puerto Rico to “achieve fiscal responsibility and access to the capital markets.”[3] The act included the creation of the aforementioned Financial Oversight and Management Board (the “Board”) with the responsibility to oversee Puerto Rico’s budget and help restructure Puerto Rico’s billion-dollar debt.[4] The Board is composed of seven members appointed by the President, and six of those members are selected from lists provided by the House and Senate leaders.[5] The President does have the power to remove these members but only for cause.[6]

            Following the dismissals, the White House stated that the board “has been run inefficiently and ineffectively by its governing members for far too long and it’s time to restore common sense leadership.”[7] What this “common sense leadership” might look like is yet to be determined because none of the vacancies have been filled. This could take time, given that Congress only required that the vacancies be filled “in the same manner in which the original member[s] [were] appointed.”[8] There are no provisions in PROMESA requiring that these positions get filled within a certain number of days, and there are no interim members. How long it will take for these vacancies to be filled is difficult to predict, but the effects are starting to be seen.

            Shortly after dismissing the members, a deal to restructure the remaining debt fell through.[9] The unsettled debt is from the Puerto Rico Electric Power Authority, and it amounts to $8.5 billion.[10] The proposed deal would have paid creditors $2.6 billion instead of the full $8.5 billion they seek.[11] The executive director of the Board repeatedly said that Puerto Rico cannot afford to pay the full debt.[12] Experts believe the recent vacancies may lead to the appointment of members who favor the creditors receiving full payment.[13] One of the exiting members, Andrew Biggs, pointed out how it is likely the board will be stacked with lobbyists who favor the bondholders.[14] Stacking the board with members who favor the interests of these creditors would be detrimental to Puerto Rico’s economy. The citizens of Puerto Rico are already struggling to make ends meet as it is. Puerto Rico has a lower median income than all 50 states and one of the highest electric bills in the United States.[15] It is essential that the President and leaders of both parties in Congress remember that the board represents Puerto Rico in this entire process.[16]

            The dismissal of five of the seven members will likely also extend the presence of the oversight board. Congress established two requirements for the board to be terminated. First, the Board must certify that “the government has adequate access to short-term and long-term credit markets at reasonable interest rates to meet the borrowing needs of the territorial government.”[17] Second, for “at least 4 consecutive fiscal years the territorial government has developed its budgets in accordance with modified accrual accounting standards; and the expenditures made by the territorial government during each fiscal year did not exceed the revenues of the territorial government during that year.”[18] Without the experience of a continually-operating, full-strength Board, it will be even more difficult to fulfill these requirements. Thus, the dismissal of over half the Board is likely to extend its presence.

            After nine years under the supervision of the Oversight Board, Puerto Rico finally passed one budget in accordance with the second requirement.[19] While this may be a sign of a light at the end of the tunnel, the government must pass three more balanced budgets. Hopefully, this will not be jeopardized by the pending deal with the power authority creditors. An unfavorable deal could result in even higher electricity bills or worse yet, the government falling back into bankruptcy.[20]

            The Oversight Board has been highly criticized for the enormous budget cuts it has made to different government agencies while spending an exorbitant amount of money on consultants, advisors, and experts.[21] The President and Congress have the power to appoint people who will represent the interests of Puerto Rico. The people of Puerto Rico desperately await the fulfillment of this promise. The three million United States citizens that live in Puerto Rico deserve better.

[1] Danica Coto, Trump Administration Dismisses Majority of Federal Board Overseeing Puerto Rico’s Finances, Associated Press (Aug. 6, 2025), https://apnews.com/article/puerto-rico-board-members-fired-dismissed-trump-56082782116eb85ece8cb0ef9090e626.

[2] Id.; see 48 U.S.C. §§ 2101–2241.

[3] 48 U.S.C. § 2121(a).

[4] See id. § 2121.

[5] See id. § 2121(e).

[6] Id. § 2121(e)(5)(B).

[7] Coto, supra note 1.

[8] 48 U.S.C. § 2121(e)(6).

[9] Danica Coto, Deal to Restructure Puerto Rico Power Company Debt Crumbles as Some Bondholders Walk Away, Associated Press (Aug. 26, 2025), https://apnews.com/article/puerto-rico-power-company-debt-board-blackrock-620450990cfc0f867a5332894272bf6c; Coto, supra note 1.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Molly O’Brien, Dropping the ‘FOMB’: Klamath Falls Resident, Colleagues Fired From U.S. Puerto Rico Financial Oversight Board, Herald and News (Aug. 15, 2025), https://www.heraldandnews.com/news/dropping-the-fomb-klamath-falls-resident-colleagues-fired-from-u-s-puerto-rico-financial-oversight/article_24cf5193-e2ef-4157-8067-49c3de0b8015.html.

[15] Id.

[16] 48 U.S.C. § 2175.

[17] 48 U.S.C. § 2149.

[18] Id.

[19] Gobernadora Firma Presupuesto y Asegura se Trabaja Para Ponerle Fin a la Junta de Control Fiscal, Metro P.R. (June 25, 2025), https://www.metro.pr/noticias/2025/06/25/gobernadora-firma-presupuesto-y-asegura-se-trabaja-para-ponerle-fin-a-la-junta-de-control-fiscal/.

[20] O’Brien, supra note 14.

[21] See Stephanie López, Puerto Rico: Spending on JCF and Government Consultants Exceeds $2 Billion, W J. (Feb. 12, 2025), https://www.wjournalpr.com/top-stories/puerto-rico-spending-on-jcf-and-government-consultants-exceeds-2-billion/article_7a1c5a82-e99d-11ef-9b40-77ea54d893cf.html.