US Supreme Court Rejects Challenge To Oversight Board Rescuing Puerto Rico From Bankruptsy

WASHINGTON (Pakistan Point News / Sputnik - 02nd June, 2020) The nine justices of the US Supreme Court unanimously rejected on Monday a bid by hedge funds to block an Oversight Board from continuing its work to bring Puerto Rico out of bankruptcy by claiming board members had not been approved by the US Senate.

"We conclude, for the reasons stated, that the Constitu�tion's Appointments Clause applies to the appointment of officers of the United States with powers and duties in and in relation to Puerto Rico, but that the congressionally man�dated process for selecting members of the Financial Over�sight and Management Board for Puerto Rico does not vio�late that Clause," Justice Stephen Breyer wrote in the ruling.

A lower court ruled in 2019 that that Oversight Board members had been appointed in violation of the US Constitution because they were not confirmed by the Senate. However, Breyer wrote that the Oversight Board's composition was not governed by the US Constitution's procedures on Federal appointments, but by another provision authorizing Congress control over US territories.

"The Board's statutory responsibilities consist of primarily local duties, namely, representing Puerto Rico in bankruptcy proceedings and supervising aspects of Puerto Rico's fiscal and budgetary policies. We, therefore, find that the Board members are not 'Officers of the United States.' For that reason, the Appointments Clause does not dictate how the Board's members must be selected," Breyer wrote.

The US Supreme Court's finding means that the Oversight Board is now free to continue its work restructuring Puerto Rico's det. The protectorate's local government had accumulated more than $100 billion in debt and pensions obligations it could no longer afford to discharge.