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Third Puerto Rico Governor Since Friday Steps Up Reluctantly

Michelle Kaske and Michael Deibert
Third Puerto Rico Governor Since Friday Steps Up Reluctantly

(Bloomberg) -- Justice Secretary Wanda Vazquez on Wednesday was sworn in as Puerto Rico’s third governor in five days. She lacks a secretary of state, a new justice secretary to replace herself, assorted other aides and officials -- and the desire to do the job.

Vazquez had said she’d take the oath only out of duty after the bankrupt U.S. commonwealth’s supreme court threw out former Governor Ricardo Rossello’s chosen successor Wednesday. Pedro Pierluisi was Rossello’s pick as secretary of state, next in line after Rossello resigned amid a texting scandal. But the judges ruled unanimously that Pierluisi violated the island’s constitution when he claimed the governor’s office last week, because he was never confirmed by the local Senate.

Vazquez was next in the line of succession. She takes the job already enveloped by an air of crisis, facing an ethics investigation of her own, surrounded by officials that Rossello appointed in his last few days in office and excoriated by protesters as another member of a discredited leadership class.

“The real wild card we have at the moment is we’re not sure how long she wants to stay in office,” said Amilcar Antonio Barreto, a political scientist at Northeastern University in Boston who studies Puerto Rico.

The court decision prolonged the tangled crisis that has been gripping the island for weeks. Demonstrators filled the streets of Old San Juan last month, demanding Rossello’s ouster after leaked chats showed his administration disparaging rivals and ordinary residents in ugly terms. While the local House of Representatives last week approved Pierluisi, Senate President Thomas Rivera Schatz sued Sunday to force Pierluisi out.

The high court agreed, and Wednesday wrote that its order would take effect immediately.

‘Unprecedented Moment’

“Puerto Rico is living through the most important moment of its democratic history,” wrote Chief Justice Maite D. Oronoz Rodriguez. “The summer of 2019 will be remembered as the unprecedented moment when Puerto Ricans -- of all ages, ideologies, backgrounds and creeds -- took to the streets to demand more from their government.”

Still, she said that it wasn’t the court’s job to express the will of the people, but to remain faithful to the constitution of Puerto Rico. She said Pierluisi couldn’t be governor without having been democratically elected or confirmed by the legislature.

Vazquez, 59, was sworn in at 5 p.m. More than five hours later, in a speech broadcast on television, Vazquez said she considers herself, foremost, a jurist. “History has brought me here without any political aspirations whatsoever,” she said.

Nevertheless, she pledged to tackle the role with all her energy and with the best for Puerto Rico in mind. She promised in coming days to convene meetings with a cross-section of parties, business people, religious and civic leaders and to meet with the heads of the island’s legislature.

“I assure you that I will give all my energy and my heart to moving Puerto Rico toward a productive society where the stability that we all yearn for is realized,” she said. “I ask our society not to lose faith in people and their abilities.”

Pierluisi said in a statement that he would support her until elections in 2020.

Grinding Recession

The island of 3.2 million has been in turmoil for the past month, but its pain has been going on for years with a grinding recession and a record $74 billion bankruptcy. Vazquez takes office as the case is in its second year and as the island rebuilds after Hurricane Maria in 2017.

Amid the recent upheaval, prices on most Puerto Rico securities remained in line. General obligations maturing in 2035 traded Wednesday at an average 54.7 cents on the dollar, little changed from Tuesday, according to data compiled by Bloomberg. Prices on the debt are up from about 52 cents at the beginning of July, as investors bet the leadership changes may give a federal oversight board a stronger hand in the island’s finances.

Pierluisi, 60, was the island’s nonvoting representative in U.S. congress from 2009 to 2017 -- a position known as resident commissioner -- and was one of the main proponents of a federal law called Promesa that gave Puerto Rico a path to bankruptcy court but also installed the much-reviled oversight board. He later worked as one of its lawyers.

Many island lawmakers -- including Rivera Schatz -- said they opposed Pierluisi because of his ties to the panel, which has pushed tough austerity measures. As governor, Rossello had to navigate among the board’s demands, an entrenched political class and an angry populace.

In a Wednesday Facebook post, Rivera Schatz accused Rossello and his allies of trying to stay in power by appointing Pierluisi and wrote that, with the Supreme Court ruling, “the fiscal oversight board did not succeed in monopolizing the executive branch to continue destroying Puerto Rico.”

Party Struggle

Pierluisi, Rivera Schatz and Vazquez are all from the island’s New Progressive Party, which seeks to make Puerto Rico a U.S. state. The party has fallen into internal fighting as the governorship fell into dispute.

“There’s a historic intraparty struggle going on within the PNP, between the Rivera Schatz wing, which is a more populist wing that is also combined with some very repressive attitudes, and the smooth, upper-class party of the Pierluisi wing,” said Juan Angel Giusti Cordero, a historian at the University of Puerto Rico. “They’ve taken over the space of the state for their conflict.”

Public demonstrations may continue with a Vazquez administration as protesters see her as part of an old and corrupt system. She is a Rossello appointee who has worked in public service for more than 30 years -- not without controversy.

Zulma Rosario, executive director of Puerto Rico’s Office of Government Ethics, directed her staff last month to look into accusations that Vazquez ignored evidence of possible corruption in the provision of hurricane relief.

In 2018, she faced an ethics investigation over whether she improperly intervened in a case involving a robbery at her daughter and son-in-law’s home. She temporarily stepped down, only to be restored after a court found there was no cause for her arrest.

Vazquez started her career as a lawyer for the Housing Department. As justice secretary, she modernized the department, reorganized the litigation division and was an advocate for sexual-assault victims, according to the Democratic Attorneys General Association.

(Updates with comment from Vazquez in ninth paragraph)

--With assistance from Amanda Albright and Jonathan Levin.

To contact the reporters on this story: Michelle Kaske in New York at mkaske@bloomberg.net;Michael Deibert in San Juan at mdeibert@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net, Michael B. Marois

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