THE TREASURY, PREPA AND CREDIT UNIONS

 

 

In its response to Senator Orrin Hatch’s letter, which I discussed here, the US Treasury included confidentiality agreements it had with PREPA and COSSEC, the PR agency that acts like the FDIC of credit unions, called “cooperativas” in PR.

 

What is interesting is that ENDI reported that PREPA did not know of these arrangements. Why did the Treasury execute these agreements? According to the PREPA confidentiality agreement:

 

the Parties desire to engage in discussions in connection with the Recipients [the Treasury] of the Company’s [PREPA] financial condition and strategic alternatives relating to the Company’s operation and indebtedness (the Evaluation) . . .” Clearly this means that the US Treasury wanted information in order to evaluate its actual condition. The question is why?

 

The Treasury also executed a confidentiality agreement with COSSEC. The agreement’s states that:

 

This the information concerns the business conditions in the Commonwealth and the financial condition of COSSEC and cooperativas. . . We understand the Treasury will use this Non-public Information in connection with monitoring developments in the Commonwealth of Puerto Rico . . . COSSEC understands and consents to Treasury’s use of Non-public Information in analytical documents, such as documents projecting financial conditions in the Commonwealth. COSSEC understands and agrees that Treasury may also provide such Treasury documents and Non-public to other federal entities as part of the federal government’s efforts to monitor financial developments in the Commonwealth.

 

Again, the question is why? The obvious answer is that Treasury needed this confidential information to determine what it was going to do in PR, what decisions it was going to force on Governor García Padilla and the PR Government. We must remember that Jim Millstein was a Treasury official during President Obama’s first administration and unbeknown to most, is intimately related to PREPA’s restructuring efforts. Again, Mr. Millstein is the person in charge not only of PREPA’s restructuring, but also of PR’s debt in general. It does not take a genius to know that Treasury is calling the shots in PR.

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