Marine Diver. The San Juan Daily Star. Monday, October 26, Self-winding movement. Water-resistant to 300m.

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1 2 Monday, October 26, 2015 Marine Diver Self-winding movement. Water-resistant to 300m. 18 ct rose gold case. Also available in stainless steel. U LY S S E - N A R D I N. C O M The San Juan Daily Star

2 GOOD MORNING The San Juan Daily Star, the only paper with 3 October 26, 2015 News Service in English in Puerto Rico, publishes 7 days a week, with a Monday, Tuesday, Wednesday and Thursday edi on, along with a Weekend Edi on to cover Friday, Saturday and Sunday. FBI SJ Chief Cases Promoted to Head International Ops in Washington Local Mainland Business Interna onal Viewpoint Travel INDEX No cias en Español Legal No ces Sports Games Horoscope Cartoons By MARIA MIRANDA SIERRA mirandasanjuanstar@gmail.com Carlos Cases Carlos Cases, special agent in charge of the FBI San Juan Field Office, who has been heading the local division since February 2013 overseeing FBI operations in Puerto Rico and the U.S. Virgin Islands, will be heading off to Washington, D.C. sometime in January after being promoted by FBI Director James Comey last week. Cases, who began his career as a special agent with the FBI in 1992, will be heading the International Operations Division Office from the FBI s headquarters in Washington. I will basically be in charge of running more than 70 offices in key cities around the globe, providing coverage for more than 200 countries, territories, and islands, Cases told the Star. Cases said the office he will be heading keeps in close contact with other federal agencies, Interpol, foreign police and security officers in Washington, and national and international law enforcement associations. International liaison [work] and information sharing are conducted in accordance with executive orders, laws, treaties, Attorney General Guidelines, FBI policies, and interagency agreements, Cases said, adding that he s excited about the change and is grateful for the opportunity. He noted that if the FBI opens an office in the U.S. Embassy that is being created in Havana, then he will be in charge of supervising that office as well. So far, Comey hasn t announced who will take Cases place in the San Juan Field Office once he departs for Washington. Cases said he feels he got a lot accomplished in his time heading the FBI s San Juan division, making special mention of the importance of collaboration with other agencies. I think the biggest achievement was being able to work hand in hand with federal prosecutors with Immigration and Customs Enforcement (ICE), the Drug Enforcement Administration (DEA), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Puerto Rico Police Department (PRPD) and the Puerto Rico Justice Department, Cases noted. I think that together we made an excellent working team; each agency in their area of expertise contributed in our fight against crime and we have been able to lower crime. As for his role in the investigation of the killing of seven-year-old Lorenzo González Cacho, Cases said that initially, when the slaying happened in 2010, the FBI told the island Justice Department that they were willing and available to help in any way possible, but Justice Secretary Guillermo Somoza said at the time that they didn t need the FBI s help. Then when Luis Betances was Justice secretary he did ask for our help and we collaborated, Cases added. He said meetings took place, information was exchanged, but that is all he can say about the case, or any other investigation for that matter. When asked if he will be leaving the FBI San Juan Field Office tray-empty, Cases said the tray is always full. I make sure the tray is always full, he said. There are too many cases here, to just sit back and leave the tray empty. There is no time for that. That tray has to remain full at all times, and as cases are resolved and criminals are prosecuted, a new case has to be placed inside the tray. Prior to being appointed the San Juan Field Office special agent in charge, Cases served as chief of the Latin America/ Southwest Border Section of the Criminal Investigative Division at FBI Headquarters in Washington. Cases career as an FBI special agent kicked off in May 1992 with the El Paso Division, where he investigated violent crime, organized crime and drug matters. Then in January 1994, he transferred to the San Juan Division and continued to work organized crime and drug cases in his native Puerto Rico. In 2001, he was promoted to supervisory special agent in the Drug Section of the Criminal Investigative Division and detailed to DEA Headquarters. He was once again transferred to the San Juan Division in 2002 as the supervisory special agent of a criminal enterprise squad. Back in San Juan, he served as a coordinator for the Organized Crime Drug Enforcement Task Force, Crisis Negotiation and SWAT. Cases was then promoted to program manager in 2005 and assigned to the U.S. Embassy in Mexico City to coordinate drug and gang investigations. He returned to the San Juan Division in 2007 as the supervisory special agent of the Joint Terrorism Task Force and, in March 2009, was promoted to assistant special agent in charge of the Criminal Branch. That same year he received the Director s Award for Outstanding Criminal Investigation and the Attorney General s Award for Excellence in Law Enforcement for his role in Operation Guard Shack, one of the largest public corruption cases in FBI history. Now, Cases will head one of the most challenging divisions in the FBI, overseeing offices worldwide known as legats and over a dozen sub-offices in key cities around the globe, providing coverage for more than 200 countries, territories and islands. Each office is established through mutual agreement with the host country and is situated in the U.S. embassy or consulate in that nation, he said. That is where Cuba may come in. At a given moment if the FBI opens an office at the new Embassy being built in Havana, well, certainly it will be my responsibility to supervise that office there in Cuba, Cases said.

3 4 Monday, October 26, 2015 The San Juan Daily Star Institutionalized Tardiness Sabotages Efforts to Furnish Fresh Financial Data By MARIA MIRANDA SIERRA As the U.S. Congress once again asked the local government about the scant financial data it has provided, this time around at a Senate Energy and Natural Resources Committee hearing about Puerto Rico s fiscal crisis, Gov. Alejandro García Padilla said comprehensive audited financial statements will be published in the following weeks or months. The governor added that this has been a problem historically on the island and that prior administrations hid information to retain market access. The commonwealth has not provided the audited financial data, despite repeated pleas from Congress for the figures. The data is now substantially past due and is irregularly late even by Puerto Rican standards. We do want to be helpful, but in order to be helpful we need verifiable data, Alaska Senator Lisa Murkowski, chairman of the Senate Energy and Natural Resources Committee, said at the hearing last week in Washington. As aggressively as Senator Orrin Hatch (R-Utah) pushed Government Development Bank (GDB) President Melba Acosta for financial data in last month s Senate Finance Committee hearing, Murkowski pushed García Padilla even harder last week. In a deficiency notice published on Electronic Municipal Market Access (EMMA) earlier this year, Puerto Rico officials indicated that comprehensive audited financial statements would be published by Oct. 31. But García Padilla didn t really give a straight answer at the hearing, saying only that they will be available in weeks or months. Height Securities Analyst Daniel Hanson noted that when Puerto Rico filed its May 7 quarterly report, just after the filing deadline of May 1 for the audited 2014 financials, the commonwealth indicated that it expected to finalize its financial statements by July 31. The Puerto Rican government is now 480 days removed from the end of FY2014, or a full 174 days beyond the 305-day filing deadline listed in bond covenants pursuant to SEC Rule 15c2-12, and the commonwealth may face regulatory repercussions as a result, Hanson said. While the governor reminded listeners that the commonwealth has historically not filed its audited financials on time, he failed to mention that this year s filing miss is the most egregious in recent memory. Meanwhile, the U.S. Treasury Department, which has supposedly been in close consultation with Puerto Rico officials over recent months, had very limited command of the U.S. territory s financial data. Two notable gaffes stand out. First, Antonio Weiss, a senior Treasury official, indicated that Puerto Rico had an independent and exhaustive forensic accounting of its books, Hanson said. It is theoretically possible that this is true, but no such accounting has been placed into public view, and given the vacillation about financial data from public figures, we think it somewhat unlikely that such a report exists. Hanson said that Weiss was likely making reference to the Conway Mackenzie liquidity analysis, which, while surely a helpful document, relied on information provided by the commonwealth and its instrumentalities and, therefore, Conway assumes no responsibility for the accuracy or completeness of such information. Conway s independent analysis was also subject to review by the GDB and the Treasury Department prior to release, Hanson said. Secondly, Hanson said, Weiss referred to $3.5 billion of annual debt service from the General Fund, a figure that is completely at odds with the actual debt service totals facing Puerto Rico. Puerto Rico s debt service is quite high, but the figure Weiss cited, Hanson said, is closer to the figure for the $28 billion Consolidated Budget than it is for the much smaller General Fund. The difference is material; Puerto Rico is spending about 12 percent of its consolidated revenue on debt, as compared to the implication by Weiss that 37 percent of General Fund revenue was going toward debt in the status quo, Hanson said. Weiss was at times non-descript about policy and seemed to lack a basic command of the costs of certain measures, including proposals that the Treasury Department itself has backed. We would have expected more from Weiss, and for investors who may have been comforted by the Treasury s supposed heightened focus on Puerto Rico, Weiss performance in yesterday s hearing should reinforce the notion that this crisis is a backburner political issue in Washington. Meanwhile, as of May 1, only 13 of the 118 instrumentalities had filed budget requests for the coming fiscal year, so constructing the fiscal year 2016 budget was not an easy process, Hanson told the STAR. I think there are at least two factors here. First, I think there s a lot of in-fighting in the Popular Democratic Party (PDP) over how to govern, and as a result, the leaders of agencies are very territorial, Hanson noted. One key here is that if an agency in Puerto Rico has a board of directors, the Office of Management and Budget (OMB) cannot demand information from it as frequently or more regularly, moreover no more than once per year. There are 84 of the 118 agencies that have independent boards. Hanson said that in addition, if the auditors identify irregularities, they have to settle those irregularities before they sign off on the financial statements. If there is fraud or if things have not been accounted correctly, this could be extraordinarily time consuming. The auditors have to not just identify problems, but also solve them, Hanson said. If they are having difficulty doing this, it could be very time consuming; furthermore, if the administration is not cooperating with the audit, it could be delayed for years. About two weeks ago, Puerto Rico Statistics Institute Executive Director Mario Marazzi acknowledged that although the commonwealth does in fact have a lot of statistical information, it is behind in its audited financial statements. And I think the data is there what we don t have is time, Marazzi said. And this has happened in the past and the government has had to ask for extensions and has notified the corresponding entities that it needs the extension. Marazzi said Puerto Rico s habit of busting deadlines with financial statements -- [i]t has happened in this term and in other terms as well -- is a government structural problem. What we are talking about here is that our government is composed of 140 entities plus 78 municipalities and each one has to turn in their own financial statement to the corresponding authorities to then be able produce the commonwealth s financial statements, he said.

4 4 Monday, October 26, 2015 The San Juan Daily Star Institutionalized Tardiness Sabotages Efforts to Furnish Fresh Financial Data By MARIA MIRANDA SIERRA As the U.S. Congress once again asked the local government about the scant financial data it has provided, this time around at a Senate Energy and Natural Resources Committee hearing about Puerto Rico s fiscal crisis, Gov. Alejandro García Padilla said comprehensive audited financial statements will be published in the following weeks or months. The governor added that this has been a problem historically on the island and that prior administrations hid information to retain market access. The commonwealth has not provided the audited financial data, despite repeated pleas from Congress for the figures. The data is now substantially past due and is irregularly late even by Puerto Rican standards. We do want to be helpful, but in order to be helpful we need verifiable data, Alaska Senator Lisa Murkowski, chairman of the Senate Energy and Natural Resources Committee, said at the hearing last week in Washington. As aggressively as Senator Orrin Hatch (R- Utah) pushed Government Development Bank (GDB) President Melba Acosta for financial data in last month s Senate Finance Committee hearing, Murkowski pushed García Padilla even harder last week. In a deficiency notice published on Electronic Municipal Market Access (EMMA) earlier this year, Puerto Rico officials indicated that comprehensive audited financial statements would be published by Oct. 31. But García Padilla didn t really give a straight answer at the hearing, saying only that they will be available in weeks or months. Height Securities Analyst Daniel Hanson noted that when Puerto Rico filed its May 7 quarterly report, just after the filing deadline of May 1 for the audited 2014 financials, the commonwealth indicated that it expected to finalize its financial statements by July 31. The Puerto Rican government is now 480 days removed from the end of FY2014, or a full 174 days beyond the 305-day filing deadline listed in bond covenants pursuant to SEC Rule 15c2-12, and the commonwealth may face regulatory repercussions as a result, Hanson said. While the governor reminded listeners that the commonwealth has historically not filed its audited financials on time, he failed to mention that this year s filing miss is the most egregious in recent memory. Meanwhile, the U.S. Treasury Department, which has supposedly been in close consultation with Puerto Rico officials over recent months, had very limited command of the U.S. territory s financial data. Two notable gaffes stand out. First, Antonio Weiss, a senior Treasury official, indicated that Puerto Rico had an independent and exhaustive forensic accounting of its books, Hanson said. It is theoretically possible that this is true, but no such accounting has been placed into public view, and given the vacillation about financial data from public figures, we think it somewhat unlikely that such a report exists. Hanson said that Weiss was likely making reference to the Conway Mackenzie liquidity analysis, which, while surely a helpful document, relied on information provided by the commonwealth and its instrumentalities and, therefore, Conway assumes no responsibility for the accuracy or completeness of such information. Conway s independent analysis was also subject to review by the GDB and the Treasury Department prior to release, Hanson said. Secondly, Hanson said, Weiss referred to $3.5 billion of annual debt service from the General Fund, a figure that is completely at odds with the actual debt service totals facing Puerto Rico. Puerto Rico s debt service is quite high, but the figure Weiss cited, Hanson said, is closer to the figure for the $28 billion Consolidated Budget than it is for the much smaller General Fund. The difference is material; Puerto Rico is spending about 12 percent of its consolidated revenue on debt, as compared to the implication by Weiss that 37 percent of General Fund revenue was going toward debt in the status quo, Hanson said. Weiss was at times non-descript about policy and seemed to lack a basic command of the costs of certain measures, including proposals that the Treasury Department itself has backed. We would have expected more from Weiss, and for investors who may have been comforted by the Treasury s supposed heightened focus on Puerto Rico, Weiss performance in yesterday s hearing should reinforce the notion that this crisis is a backburner political issue in Washington. Meanwhile, as of May 1, only 13 of the 118 instrumentalities had filed budget requests for the coming fiscal year, so constructing the fiscal year 2016 budget was not an easy process, Hanson told the STAR. Daniel Hanson I think there are at least two factors here. First, I think there s a lot of in-fighting in the Popular Democratic Party (PDP) over how to govern, and as a result, the leaders of agencies are very territorial, Hanson noted. One key here is that if an agency in Puerto Rico has a board of directors, the Office of Management and Budget (OMB) cannot demand information from it as frequently or more regularly, moreover no more than once per year. There are 84 of the 118 agencies that have independent boards. Hanson said that in addition, if the auditors identify irregularities, they have to settle those irregularities before they sign off on the financial statements. If there is fraud or if things have not been accounted correctly, this could be extraordinarily time consuming. The auditors have to not just identify problems, but also solve them, Hanson said. If they are having difficulty doing this, it could be very time consuming; furthermore, if the administration is not cooperating with the audit, it could be delayed for years. About two weeks ago, Puerto Rico Statistics Institute Executive Director Mario Marazzi acknowledged that although the commonwealth does in fact have a lot of statistical information, it is behind in its audited financial statements. And I think the data is there what we don t have is time, Marazzi said. And this has happened in the past and the government has had to ask for extensions and has notified the corresponding entities that it needs the extension. Marazzi said Puerto Rico s habit of busting deadlines with financial statements -- [i] t has happened in this term and in other terms as well -- is a government structural problem. What we are talking about here is that our government is composed of 140 entities plus 78 municipalities and each one has to turn in their own financial statement to the corresponding authorities to then be able produce the commonwealth s financial statements, he said.

5 The San Juan Daily Star Monday, October 26, Rosselló Proposes Cutting Gov t Agencies by 70% By MARIA MIRANDA SIERRA mirandasanjuanstar@gmail.com NPP gubernatorial hopeful Ricardo Rosselló was not able to be present in Washington, D.C. at last week s Senate Energy and Natural Resources Committee hearing on the island s fiscal woes. Since he is not an elected official, he instead took the opportunity to express himself on how the island can get out of the fiscal crisis by writing an article for Forbes magazine. Rosselló made a series of proposals that he believes will allow the government to be able to straighten out its finances. His recommendations, however, will likely generate controversy as he suggests reducing government agencies by 70 percent. He explained that he would reduce government agencies by fusing them, and he would reconfigure the services offered and delegate functions to private entities. We should start by creating a new government structure that significantly reduces the cost and enhances its function. The current structure allows for 118 agencies in the executive branch, at a price tag of $21.8 billion per year, Rosselló Nevárez wrote in Forbes. All of the services provided by these agencies, 340 in total, must be reassessed to determine if some of them can be consolidated, delegated to the private sector, and which ones are simply not necessary. The strategy could provide up to a 70 percent reduction in the government s sprawling administrative structure. He also touched on public corporations and how they represent such a huge burden in the commonwealth s debt. He said publicprivate partnerships should be explored for certain operations within each public corporation that will also let them set up provisions to pay the debt. That will provide long-term repayment guarantees to bondholders and, most important, a much needed reduction in the cost and improvement in the quality and accessibility of basic infrastructure services to the island s residents and businesses, Rosselló Nevárez wrote in his commentary. Economist Gustavo Vélez said the major public corporations, which were created so that they act as financially self-sufficient entities, today represent an enormous weight on the economy and consumers. The problem with the public debt is concentrated primarily in Puerto Rico s three major public corporations, the Puerto Rico Electric Power Authority (PREPA), the Puerto Rico Highways and Transportation Authority (PRHTA) and the Puerto Rico Aqueduct and Sewer Authority (PRASA), among others. The combined debt of public corporations is about $48 million. Even more tragic is the fact that many of these corporations, which were supposed to serve as models to be followed by other developing countries, have become financially insolvent and politicized organizations that depend on subsidies and loans from the Government Development Bank to operate, Vélez noted.

6 6 Monday, October 26, 2015 The San Juan Daily Star Local Restructuring Effort to Go Forward Despite Congress Inaction, La Fortaleza Says By EVA LLORENS VELEZ Lisa Murkowski U.S. Senate Energy and Natural Resources Chairwoman Lisa Murkowski hinted last week that Congress was not going to take action on the Obama administration s road map to help Puerto Rico but La Fortaleza says it will continue with its plans even if Congress does not act. Murkowski said the current administration has said the White House plan can t be funded without offsetting cuts in other areas of the budget. Then she ended a hearing last week to discuss Puerto Rico s financial woes by saying, I apologize that we can t give more time to this. Like Sen. Orrin Hatch in a previous hearing also on Puerto Rico, Murkowski complained about the lack of accurate data on Puerto Rico s finances. Gov. Alejandro García Padilla said he expected to have the 2014 audited financial reports completed in weeks or months. La Fortaleza Chief of Staff Víctor Suárez said that regardless of what Congress does, the government will go ahead with its plan to restructure the public debt following the White House s presentation of a road map to help Puerto Rico. Our plan is to restructure the debt with a consensual and voluntary process, but certainly if Congress gives us the tools we will have better results and the process will be more expeditious if we do not, Suárez said. Anyway, we will continue with the plan we presented to the country to restructure our debt and continue the fiscal adjustment plan to address the situation of Puerto Rico. Suárez said the administration is seeking all possible alternatives to the lack of cash on hand, and emphasized that at this time the people should watch and join the call for Congress to act. He also urged the island Legislature to pass the bill that will create the fiscal control board that will oversee the five-year fiscal adjustment plan. Any debt restructuring plan will require an entity to guarantee the accords will be followed, he said. That process must continue regardless of what has been presented in Congress. That should not stop the process here in Puerto Rico. The Government Development Bank, meanwhile, has stopped negotiations with its creditors as it faces a payment of over $300 million in December. We continue to look for alternatives to maintain services, Suárez said. If we do not find liquidity, we are going to have to choose between paying debt or continuing services. Gov t Analyzing Debts to Determine Payability By EVA LLORENS VELEZ llorenseva4@gmail.com La Fortaleza Chief of Staff Víctor Suárez said last week the island government is conducting an analysis to determine which debts will not be payable at year s end if the U.S. Congress does not take concrete action on Puerto Rico s behalf to deal with its debt. During a Senate Energy and Natural Resources Committee hearing on Thursday, chairwoman Lisa Murkowski, said it takes Congress time to tackle issues even during a crisis. She made her remarks during a hearing in which the U.S. Treasury proposed a debt restructuring framework exclusively for U.S. territories and to extend the earned income credit for Puerto Rico, among other solutions. The determination will have to be based on the maturity of each debt and based on the legal protection that each one of those debts has, Suárez said at a news conference. Certainly, we are going to have to be making decisions later this year on that debt and which we will pay or will not pay in order to provide essential services to the people. The government is expected to run out of liquidity in December, with a $28 million gap that is expected to grow to $500 million by the end of the fiscal year. It will have to decide whether to provide services or pay debt. Suárez did not rule out that such a move will result in lawsuits to determine which of the commonwealth government s debts are unconstitutional, so that Puerto Rico does not have to comply with the payment schedules. Sen. Bernie Sanders said during Thursday s hearing that he believes the island s unconstitutional debt should not be paid. More than a strategy, it s a necessity, Suárez said. Even though the government has hinted that it would rather avoid paying debt than shutting down the government, Office of Management and Budget Director Luis Cruz Batista said the government can not dismiss the possibility of a shutdown. He said the months of November and December were critical, and that the government is truly doing what it can to continue operating. Víctor Suárez

7 The San Juan Daily Star Monday, October 26,

8 8 Monday, October 26, 2015 The San Juan Daily Star Reactions Mixed to Proposal for Early Retirement Program By EVA LLORENS VELEZ Legislation that would create the Pre- Retirement Program has received a lukewarm reception. The House Labor and Retirement System Committee, led by Rep. Jesús Santa Rodríguez, heard testimony from government agencies and organizations at the hearing last week on House Bill 2717, which would create the voluntary early retirement program. The legislative proposal responds to the need to reorganize the government, reduce operating and administrative expenses in the various government agencies and maintain essential services for citizens without resorting to firing employees or affect the solvency of the retirement systems of government at a time of a serious budget crunch that would leave the government insolvent by December. Luis Cruz Batista, executive director of the Office of Management and Budget, said the benefits of participating include receiving around 60 percent of their career salary when eligible for the program until they meet the eligibility criteria for retirement pursuant to Law 447 of May 15, They will also receive the liquidation of vacation pay, health plan payments for two years and individual retirement account contributions while participating in the program, which will have the effect of increasing their pension upon entering the Retirement System. It is estimated that some 16,500 employees are potentially eligible for this program. The requirements are to have begun contributing to the Retirement System before April 1, 1990, have more than 20 years of service listed under the law and be a 447 career government employee. The director of the Retirement Systems Administration (ASR), Pedro R. Ortiz, said the administration supports the measure by offering the option of a voluntary early retirement, which would represent savings for central government agencies and municipalities but will not cost money to the retirement system. The Mayors Association, represented by Raúl Santiago, acknowledged that the measure has a laudable purpose, but did not endorse it because municipalities have to pay 60 percent of the employee s salary and the employer s contribution to health insurance and social security. He also noted that municipal employees accrue compensatory time and the bill does not address how this benefit will be paid to municipalities. He said it would be burdensome for a municipality to pay an employee who no longer works for the town. The Mayors Federation also opposed the measure. The United Front of Police Officers President Oscar Rodríguez said the bill puts police officers at a disadvantage because they would receive less money for retirement. Santa stressed that the proposed program is voluntary. PR Looks to Organ Transplants to Help Cure Ailing Economy Fearing her husband would die waiting for a heart transplant in Miami, Carmen Concepción started looking for a faster way to save his life, and found the answer in her native Puerto Rico. Pablo, 59, could barely walk from the family room to the bathroom without growing short of breath, Carmen said. She looked across the states for hospitals with shorter wait times until a friend recommended she consider her homeland. Carmen was hesitant but gave it a chance. In December, Pablo received his heart transplant, becoming the first person to travel from the mainland U.S. to the island commonwealth for the procedure, said Dr. Iván González Cancel, his surgeon and the director of the heart transplant center at the Cardiovascular Center of Puerto Rico and the Caribbean. Pablo is now able to bike about a mile and climb four to five flights of steps. Puerto Rico is trying to build its medical tourism industry, from a current level of about $80 million a year to $300 million by 2017, as part of efforts to heal its chronically sick economy. A component of that is to encourage more patients to travel for organ transplants. Patients who visit for transplants, and for more common medical procedures such as orthopedics, dentistry and weight-loss surgery, spend thousands on hotels, transportation and food. Puerto Rico s potential as a transplant center is partly based on a macabre statistic -- the Caribbean island had a murder and non-negligent manslaughter rate of 19.2 per 100,000 people in 2014 compared to 4.5 per 100,000 in the United States, according to Federal Bureau of Investigation data. That translates into a pool of donors in the age range unmatched in the mainland, González Cancel said. The donors [are] victims of car accidents or gunshot wounds to the head, because Puerto Rico, sadly, we have a very high crime rate. High-crime areas certainly exist among the U.S. states, but Puerto Rico has recently also had organ donation rates higher than expected by the Scientific Registry of Transplant Recipients (SRTR), which analyses data on donated organs. The cost of care is another attraction, at as much as 60 percent lower than on the mainland, according to the island government. Because Puerto Rico s transplant centers are part of the national organ sharing network, U.S. patients can transfer there as long as doctors admit them, with few other hurdles. Pablo and Carmen Concepción moved temporarily to Puerto Rico, and paid out-ofpocket for Pablo s transplant and extended hospital stay beforehand. While that cost about $350,000, it was far less than it would have been on the mainland. I d rather have a debt and he s alive, said Carmen, a teacher. Pablo, who is now disabled, was a truck driver. Finding a heart donor match depends on a number of factors, including blood type, but Puerto Rico s geographically isolated location within the national organ sharing network can give some patients shorter wait times. The United Network for Organ Sharing (UNOS) allocates hearts based on medical urgency and location of the patients. Because there are no U.S. transplant centers within 500 miles (800 km) of Puerto Rico, candidates on the island s waiting list have the first opportunity at an organ, according to Roger Brown, director of the organ center at the network. Patients on the island from 2009 to mid-2014 waited a median of 1.3 months for a heart transplant, versus 8.1 months nationally, according to the SRTR. For livers, the island had the shortest median wait time in the country at about three weeks, compared to over a year nationally, according to the SRTR. Dr. Juan Del Río is one surgeon eager to attract more patients. He completed Puerto Rico s first liver transplant in 2012, after moving to the island from New York because of the greater availability of organs. He originally projected completing around 100 liver transplants a year, but is now doing a little less than half that and he sees attracting people from the mainland United States as one way to achieve full capacity. Surgeons prefer to transplant organs from nearby, but since the late 1980s, more than 60 percent of the approximately 4,000 organs donated in Puerto Rico have been shared off-island, according to UNOS data. Those are organs surgeons would like to use in Puerto Rico. Liver transplant candidates should consider Puerto Rico, Del Rio said, instead of waiting in New York and [waiting] to be really, really sick with a high risk of dying before transplant. Representatives from Auxilio Mutuo, the hospital that houses the liver and kidney transplant centers, also suggest mainland patients enlist in their kidney program, though the waiting time for a transplant is far longer than for hearts and livers. The island s government will have spent about $3.3 million on developing the medical tourism industry by mid Still, some people would be reluctant to travel to the island for such serious surgeries. People draw the line at cardiology, [saying] I can t see myself on an operating table in a strange land, said Josef Woodman, the CEO of Patients Beyond Borders, a medical travel information publisher. Puerto Rico has to show it can offer quality care to compete for heart transplant patients, he said.

9 The San Juan Daily Star Monday, October 26,

10 10 Monday, October 26, 2015 The San Juan Daily Star S&P Maintains CC Rating on PR After US Treasury Proposal Standard & Poor s (S&P) late last week maintained its CC rating on $47.5 billion of tax-backed Puerto Rican bonds, reflecting a negative outlook after the U.S. Treasury Department pushed Congress to pass laws to address the island s economic crisis. The U.S. commonwealth, facing $70 billion in debt, has said it could run out of cash by next June, and some analysts believe it will default as early as Dec. 1, when it owes a $355 million payment. Treasury s proposal, the Obama administration s first public directive on how to address the U.S. territory s problems, would allow the Puerto Rican government to file for bankruptcy, improve its Medicaid and Medicare funding levels, and extend earned income and child tax credits to the island. In a Friday statement, S&P said its rating reflects our view that a default is highly likely, with or without enactment of this proposal. S&P reasoned that, if enacted, bankruptcy could hurt rather than help bond prices by giving Puerto Rico courtsanctioned leverage to restructure. The proposal is likely to face an uphill climb in Washington, which means a default likely could occur before legislation is passed anyway, S&P added. At a Thursday hearing on the island s fiscal problems, held by the U.S. Senate Committee on Energy and Natural Resources, lawmakers expressed skepticism toward a timely passage of any Puerto Rico legislation. Democratic senators urged Treasury to find creative ways to address Puerto Rico s problem itself, while Republicans demanded the island s government be more forthcoming about its financial statements. We haven t seen a comprehensive, independent audit since 2013, said Sen. Lisa Murkowski (R-Alaska), in a New York Times report. While the long-term fiscal analysis and a recent liquidity report were useful, she said, there was no substitute for the credibility that audited financial statements could impart. What s the status? she asked. Gov. Alejandro García Padilla said he was already leaning heavily on outside auditors to finish the overdue reports, and that if he pressed too hard, they might make mistakes. He also said his government had inherited antiquated computers and messy data sets that were hard to work with. He said he thought the 2014 audit would be available next week, but that only prompted Murkowski to say she wanted the 2015 audit too. (Puerto Rico s 2015 fiscal year ended on June 30.) The question of bankruptcy is central to Puerto Rico s crisis, because the commonwealth is excluded from the debt restructuring laws that govern U.S. states. Some Puerto Rican leaders support granting the commonwealth the right to put certain ailing agencies into bankruptcy, which would put the island on an even footing with states. Treasury s proposal would go a step further, allowing the government itself to file bankruptcy. Creditors generally oppose bankruptcy in any form, because it would make it easier for Puerto Rico to cut their repayments. Power Restored After Major Outage The Puerto Rico Electric Power Authority (PREPA) said on Friday it had restored power to all residents after a major outage left 147,000 powerless earlier in the day. The outage occurred when four transmission lines encountered problems, PREPA spokesman Jose Echevarria said. Most affected residents were in the north, Echevarria said, with no major ports or airports affected. But residents as far south as Humacao, near the southeastern corner of the island, told Reuters they had been without power. The initial 147,000 represented about 4 percent of the island s roughly 3.5 million population. The affected lines included a pair of 230-kilovolt lines, one linking the municipalities of Manatí and Bayamón, in the north, the other between the Aguirre and Costa Sur power plants, in the south. The other two affected lines were 115-kilovolt transmissions, one linking Manatí and Vega Baja, also in the north, and the other running between the major city Ponce and Santa Isabel, in the south. Bayamón is close to San Juan, the island s capital city and business hub. Echevarría said he had no information as to whether business operations were significantly affected, but said PREPA had not heard serious complaints from businesses on the island. In PREPA s statement saying power had been restored, which came around 3:30 p.m on Friday, PREPA Deputy Director Carlos Castro praised a rapid response from agency staff. PREPA has reserves and sufficient generation capacity to avoid the risk of blackouts and ensure continuity of service, Castro said in the statement. PREPA is struggling with more than $8 billion in debt. It is working to finalize a debt restructuring deal with creditors, which in turn have demanded operational overhauls that could cause PREPA to raise electricity rates and invest in improving outdated infrastructure.