Top budget director in New York to head Puerto Rico’s finances
Robert Mujica, the overseer of New York’s $200 billion budget, has been tasked to reign in Puerto Rico’s dire economy.
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Puerto Rico’s Financial Oversight and Management Board (FOMB) is primed for a shake-up as its governing board announced this week that Robert Mujica, New York’s Budgeting Director, will serve as its new Executive Director.
Mujica, son of the Puerto Rican diaspora, is poised to transition to his new post at the end of the year, a spokesperson for his office told AL DÍA.
“It is a special place to me, and I want to see it prosper,” he said in a statement.
News of Mujica’s transition appeared to be a surprise for New York Governor Kathy Hochul, who in September 2021 told POLITICO he’d be in her cabinet for a long time. Nonetheless, Gov. Hochul said she was “glad that our neighbors in Puerto Rico will get to benefit from his considerable talents,” in a statement.
Mujica, donned a “game changer” by the FOMB’s Chairman David Skeel, will be tasked to manage a mammoth $78 billion debt owed to bondholders and vulture funds who staked their investments against Puerto Rico’s increasing government expenses. He will also inherit Jaresko's $625 thousand salary, a substantial raise from his current role, which awards Mujica $216,186.
For Mujica, Puerto Rico's debt is dwarfed by the budget he currently manages, but where Mujica's challenge may lie are the multiple actors looking for a payout.
“This was a deliberate search for the right leader, and I am delighted Robert is joining our team of dedicated Puerto Ricans who have been working tirelessly to help their island recover,” Skeel said.
The FOMB is a Congress-appointed board that controls Puerto Rico’s total spending and was granted the authority to determine where the island’s resources are directed, as well as approve or reject any form of government expenditure, including any financial resolutions set forth by its Governor, Pedro Pierluisi.
It was installed in 2016 by former President Barack Obama with a narrow 68-30 majority to ensure Puerto Rico’s $78 billion debt was paid back to its lenders, mostly bondholders and vulture funds who staked investments against the debt.
Supervising the FOMB’s mission to restructure the debt is Hon. Laura Taylor Swain, a New York District Court Judge who ensures the board’s decrees are legally sound and timely to avoid litigation with debtors.
Judge Swain has also been a controversial figure in Puerto Rican politics, particularly in October of 2021, when FOMB had presented their master debt restructuring proposal to the court, she told the board her “patience was running out” after they had failed to secure enough votes in the Senate.
Sen. Bob Menéndez, a vocal opponent of the bill, said in 2016 he was “afraid this bill provides little more than a Band-Aid on a bullet hole with regard to Puerto Rico’s unsustainable debt.”
“Mark my words — if we don’t seize this opportunity to address this crisis in a meaningful way, we’ll be right back here in a year from now picking up the pieces,” he said.
But Mujica promises to bring “meaningful reforms and consistency will ensure that Puerto Rico never falls back into crisis.”
“Working with Puerto Rico on the path towards economic progress is why I decided to join the Oversight Board and I support its mission to transform Puerto Rico’s recovery into prosperity,” he added.
Mujica’s office declined to comment on what kind of long-term reform and leadership he plans to bring forth through his appointment. He could very well pick up the pieces left by Natalie Jaresko, FOMB’s previous director and a widely criticized appointment.
Jaresko, formerly a staffer for the Department of State and finance minister for Ukraine, exited the FOMB in March after having held a firm grip on Puerto Rico’s financing for five years.
Mujica, in addition to following through with the debt restructuring, will need to navigate relationships with local government officials in Puerto Rico to garner the necessary support on the legislative floor, who are key players in determining whether any proposals become law.
But Mujica will also need to negotiate with the hasty investors, increasingly anxious about cashing in on Puerto Rico’s debt, and a judge who’s ready to close the case after five years of court battles.
Mujica did not offer comment as to what specific and immediate reforms he hopes to implement.