PROMESA, the bill designed to help Puerto Rico restructure debt and get back on track financially, has spurred a lot of controversy. One of the provisions in the bill made Bloomberg writer Saleha Mohsin wonder what was up.

The provision is on pages 24 and 25 of the bill. It seems to say that members of the fiscal oversight board can take presents, including gifts of money.

The  Oversight  Board  may  accept,  use,  and  dispose  of  gifts,  bequests,  or  devises  of  services  or  property,  both  real  and personal, for the purpose of aiding or facilitating the work of  the  Oversight  Board.  Gifts,  bequests,  or  devises  of  money  and  proceeds  from  sales  of  other  property  received as  gifts,  bequests,  or  devises  shall  be  deposited  in  such account  as  the  Oversight  Board  may  establish  and  shall  be  available  for  disbursement  upon  order  of  the  Chair,  consistent with the Oversight Board’s bylaws, or rules and procedures. All gifts, bequests or devises and the identities of  the  donors  shall  be  publicly  disclosed  by  the  Oversight  Board within 30 days of receipt.

This paragraph is actually a very common provision; you can find it in over and over again in the U.S. Code. Here’s an example:

The Secretary of Agriculture is authorized to solicit, accept, receive, hold, utilize, and administer on behalf of the United States gifts, bequests, or devises of real and personal property made for the benefit of the National Arboretum or for the carrying out of any of its functions.

Apparently, the oversight board is not allowed to solicit (ask for), hold, or receive gifts the way the Secretary of Agriculture can.

Here’s another:

The Museum may solicit, and the Museum may accept, hold, administer, invest, and use gifts, bequests, and devises of property, both real and personal, and all revenues received or generated by the Museum to aid or facilitate the operation and maintenance of the memorial museum.

You’ll find very similar language in the rules of colleges and universities, charities, and many other organizations. It’s also common for the governing boards of everything from hospitals to churches to have a statement like this making it clear that gifts must go to the board. The language in that section also makes it clear that any money donated by anyone must go into an account set up by the oversight board — not into the pocket of any individual. So it is not a special rule made up for PROMESA: it’s a normal legal way of making sure that any gift or donation is handled correctly.

In practical terms, this language allows donations to be accepted. The oversight board could, for example, accept office space instead of renting it, in order to save money for the government of Puerto Rico, which will be paying for the costs of the oversight board. They could accept the use of a printer instead of buying one. And yes, they could accept a donation, but this provision makes rules for those donations. Without a clause of this kind, it would technically be possible for a member of the board to accept a valuable gift from a creditor and later say that there was no rule saying he or she couldn’t. Having plain and clear rules about gifts and donations is not only a normal thing to do in setting up a board, it’s a necessary thing.

Read the whole bill.



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