Who is the Development Bank of Puerto Rico’s rumored next president?
In the latest sign of Puerto Rico’s perilous financial footing, The Bond Buyer reported that the president of the Government Development Bank of Puerto Rico, Javier Ferrer, announced his resignation on Wednesday.
In this role Ferrer had the leading role overseeing and advising the debt of the Puerto Rico government and public authorities. The bank also lent to the government and authorities.
Puerto Rico Gov. Alejandro García Padilla announced that Joseph Pagan, currently executive vice president of financing at the GDB, will be the interim president.
The GDP has acted as a fulcrum under the government’s finances, often by borrowing for one entity and then lending those funds to another entity. Unfortunately, the GDB has run out of space on its balance sheet to continue.
Meanwhile, a Puerto Rico politician, Waldemar Quiles, has challenged Padilla to confirm that he will appoint Treasury Secretary Melba Acosta as head of the GDB, according to Metro PR (Spanish).
So who is Melba Acosta? In her LinkedIn profile she is a banking technocrat who says this about her tenure at RG Financial, where she worked from 2004 to 2010: “Maintained full accountability for managing operational and risk management activities in support of organizational goals. Applied strategic planning, prioritization, and project management skills toward consistently achieving critical deadlines while maintaining high quality standards.” Fatefully, the SEC charged RG Financial for securities fraud in 2008 and the bank filed for Chapter 11 bankruptcy in 2010. One individual has pointed out that Acosta was not charged in the securities fraud, which appeared to occur before she joined R&G.
@cate_long in RG-Premier Bank that is being liquidated by FDIC. She, however, was not sued by the FDIC as it did with other executives.
— JOHN E. MUDD (@MUDDLAW) July 17, 2013
Acosta was part of management leading up to the bankruptcy, though it is unclear exactly what her role was.
Acosta seems to be the power behind the throne for Puerto Rico finances. Maybe it’s time that muniland gets to know her better.