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Detroit Paid Less for the Manager of Their Board

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Detroit paid $275,000. Washington paid $ 155,000. Puerto Rico will pay $ 625,000 … The payment of $625,000 a year that the newly appointed executive director of the Fiscal Control Board, Natalie Jaresko will receive far exceeds what her counterparts earned in other fiscal boards in the US.

Inadditiontothelucrativesalary,Jaresko will have the right to security, chauffeur and reimbursement of moving expenses and periodic trips to Ukraine, Washington and New York, among others. This compensation is more than double what the manager of Detroit fiscal emergency board, Kevyn Orr, who was appointed in 2013 to handle that city’s bankruptcy, earned,with a salary of $275,000 annually.

Although his salary is abysmally lower than the JCF has approvedforJaresko in Puerto Rico, Orr’s contract in Detroit was not without criticism for the amount and benefits of reimbursement, security and travel that this bankruptcy lawyerreceived.

In Detroit, there were criticisms in addition to theconsultantscontracts of the fiscal board,such asthe case of Larry A. King, who earnedlittle more than $600,000 in two years by his work of financial advice.

However, contrary to the PROMESA Act that imposes the guidelines of the JCF, in Detroit the legislation that created the city’s tax agency set ceilings for salary expenses and hiring counseling experts and other staff.

Sections 34 and 35 of Michigan State Law 865 grant $ 780,000 to pay manager’s salaries and $5 million to hire the necessary personnel and advice to guide the process under Chapter 9 of the Bankruptcy Act.

Detroit is the most recent and most appropriate case to compare Puerto Rico to the parameters used to remunerate officers in restructuring processes through a board. However, two decades ago in Washington, the issue of wages was controversial, although the figures are very distant from the salary of Jaresko.

In a letter sent by the General Accounting Office (GAO), this body disallowed the salaries authorized by the Board in 1998; to pay several senior officials, including Principal Camille C. Barnett, hired in December 1997 for a salary of $ 155,000 and Board Executive Director John W. Hill Jr. $ 122,700. Salaries were reduced following GAO’S indications.

Although the main government officials have put the cry in the sky with the hiring of Jaresko, according to lawyer Rolando Emmanuelli Jiménez is very little or nothing what these can do since the PROMESA Law expressly says that the Fiscal Control Board is not under the jurisdiction of any of the three branches of government of Puerto Rico.

‘According to article 107 of the PROMESA Law, the board has the complete discretion to cover its costs with the monthly budget of $ 2 million. No regulation on government contracting and wages of the territory or federal government applies for the appointment and determination of pay of the executive director of the board or its staff, ‘said Emmanuelli Jiménez.

The government can neither investigate nor demand the determinations of the body created by Congress, although it is not part of the federal government.

Section 108 of PROMESA provides for the autonomy of the board over territorial government, so neither the government nor the legislature can exercise control, supervision, review or oversee the activities of the board. Nor can they approve, exercise any law or regulation that impairs or defeats the purposes of this.

‘The PROMESA Act allows the unreasonable use of public funds in a bankrupt country and is being imposed a whole series of austerity measures that question the morality that the board has to implement these cuts in essential service areas’, said the lawyer of Ponce, author of the book PROMESA, in which he analyzes the impact of this congressional legislation.

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Lic Alexis Quiñones

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