- January 29, 2022
- Posted by: MasterAdmin
- Category: Altcoins
Puerto Rico has recently made headlines for stories that may seem unconnected; they are related, however. The common factor? Puerto Rico’s status as a colony—first under Spanish rule, and now as a “territory” of the United States.
King Felipe VI of Spain arrived in Puerto Rico on Monday to commemorate the 500th anniversary of the founding of San Juan. The anniversary was last year, but the COVID-19 pandemic delayed Felipe’s trip. Just ahead of his arrival, a statue of Juan Ponce de León was toppled from its pedestal by a group known as the Borikén Libertarian Forces. (Borikén is the Indigenous Taino name for the islands.) The group was protesting the visit from Puerto Rico’s former colonizer.
And last week, the head of the unelected board that rules the Puerto Rican economy announced a major “debt deal,” much to the consternation of many islanders who view the board’s imposition upon Puerto Rico as open U.S. colonialism.
Yet another headline maker in the States is Bitcoin billionaire Brock Pierce. He just bought a 150-room oceanfront hotel for $18.3 million in Vieques—which still doesn’t have a hospital post-Hurricane Maria. Many activists on the island view Pierce and his fellow Bitcoin adherents as gentrifying interlopers and exploiters whose state-sponsored grift and invasion are viewed as settler colonialism by the Puerto Ricans engaged in grassroots anti-gentrification and sustainability organizing across the island.
Caribbean Matters is a weekly series from Daily Kos. If you are unfamiliar with the region, check out Caribbean Matters: Getting to know the countries of the Caribbean.
This was the news that many people woke up to on Monday.
The statue of Spanish colonizer Juan Ponce de León in San Juan is destroyed on the same day the King of Spain is scheduled to visit Puerto Rico. Picture by Telemundo. pic.twitter.com/EBW2euZYPM
— Bianca Graulau (@bgraulau) January 24, 2022
The toppling was meant as a “clear message,” independent journalist Bianca Graulau explains.
A summary of what happened today: a group took down the statue of a Spanish colonizer in San Juan on the same day the King of Spain was scheduled to visit Puerto Rico. The group that claimed responsibility demanded the repeal of the tax break inviting wealthy ppl to PR. pic.twitter.com/M9VUEtlX7M
— Bianca Graulau (@bgraulau) January 25, 2022
Jasmine Liu writes this about the statue’s history:
Located in Old San Juan, historically the colonial quarters of the city, the statue has previously served as a landmark where activists gathered to demand that the Puerto Rican government remove statues associated with Spanish rule. A US National Historic Landmark, the statue shows León with his left hand on his hip, his right finger pointed directly ahead, wearing a shirt with ruffles on the cuff, a coat with sleeves that reach his elbows, trousers, and long boots, all topped with a hat adorned by a long feather.
Cast in 1882 in New York from the melted steel of British cannons, the statue was gifted to Puerto Rico as a commemoration of the successful defense of the island from the British in 1797. The statue faced the San Juan Bautista Cathedral, the second oldest church in the Western Hemisphere, which holds León’s remains.
“These statues represent all that history of violence, of invasion, of looting, of theft, of murder,” an activist and member of Puerto Rico’s Council for the Defense of Indigenous Rights named Pluma told the Associated Press during protests in July 2020. “These are crimes against humanity.”
I can’t help but relate the Ponce de León statue’s toppling to similar actions taken by activists both here and in Europe. Whether it’s pushback against monuments to Confederate generals or slave traders, or a doctor who experimented on Black women, challenges to systemic racism in education, or Native American-led protests against statues of Christopher Columbus, protests surrounding statues are about far more than sculpture.
As noted above by Graulau, part of the Puerto Rican protest centers around Act 22, described here by the National Law Review:
What Is Act 22?
Individual Investors Act (Act 22) was passed by Puerto Rican lawmakers in an attempt to attract new, high-income residents. The Act allows qualifying residents to claim a number of tax advantages upon becoming a bona fide resident of Puerto Rico, including:
Capital Gains Exemptions:
All accrued capital gains income after becoming a resident is exempt from any tax imposed by Puerto Rico.
All unrealized capital gains income that was accrued but unrealized before becoming a Puerto Rican citizen is subject to a lower tax rate.
Passive Income Exemptions:
All new residents’ dividend and interest income is exempt from Puerto Rican income tax.
All interest and dividend income that constitutes a “source of income” is exempt from federal income taxation under Section 933 of the IRS Tax Code.
The Washington Post also recently covered the tax break law, noting that “a new wave of wealthy investors is moving to the island. Locals are greeting them with excitement—and suspicion.
Puerto Rico’s turn as a tax haven for the rich began in 2012. For decades, the U.S. commonwealth had relied on tax incentives as a growth strategy, luring industries such as manufacturing and pharmaceuticals. When those companies closed, officials decided to try something different: They would attract wealthy people in service sectors such as finance and law, who would buy homes, open bank accounts, hire local residents and otherwise boost the island’s faded economy.
The resulting legislation, known as Act 22, offers people who live on the island at least 183 days a year the promise of tax-free profits on their investments, which are otherwise subject to federal taxes of up to 37 percent. People who had lived on the island in the past 15 years weren’t eligible, meaning most native Puerto Ricans could not benefit.
Then, in 2017, disaster struck. Months after the island declared bankruptcy — with a large portion of the debt owed to U.S. hedge funds — Hurricane Maria brought catastrophic damage, killing nearly 3,000 people and leaving most of its 3.4 million residents without power, running water or cellphone service. At the same time, a staggering surge in the crypto markets brought an influx of newly flush crypto investors to the island.
In 2018, Rolling Stone profiled Brock Pierce—a child actor in such ’90s films like The Mighty Ducks and Little Big League—who pioneered the crypto corner of the Act 22 invasion.
Among other things, Pierce is trying to give this decentralized world a new center: Puerto Rico – or, as the crypto community has called it at various times: Crypto Rico, Puerto Crypto, Puertopia and Sol. Pierce leased (and intends to buy) the freemasons’ hall and an abandoned children’s museum, which he’s turning into a community center. He’s also co-founding a bank in Puerto Rico, and plans to open both an eco-resort in the island’s famous surf spot Rincón, and a large cluster of residences in nearby Mayagüez.
Why Puerto Rico? The simple answer: It’s a beautiful U.S. territory in the Caribbean that offers large tax incentives to independent investors. The island, of course, is also still trying to recover from the one-two punch of a debt crisis and Hurricane Maria. And Pierce, who is smart enough to know that a bunch of mostly rich white males buying up property in a tax haven has a colonialist stench to it, has promised to harness their energy and money to serve Puerto Rico. “We’re going to rebuild Puerto Rico with money that we saved from the IRS in a Robin Hood fashion,” he says with a smirk.
I didn’t believe Pierce’s “Robin Hood” hype then and don’t now. Here’s more from Graulau on Pierce and his buddies’ greed:
Bitcoin billionaire Brock Pierce just bought a 150-room oceanfront hotel in Vieques. Pierce became known in Puerto Rico after a NYTimes article about how he wanted to create a crypto utopia here. He’s an Act 22 (now Act 60) beneficiary, the tax break inviting wealthy ppl to P.R. pic.twitter.com/Gsk2B8KJMc
— Bianca Graulau (@bgraulau) January 23, 2022
Interestingly enough, Act 22 has even elicited comments from New York Senate Majority Leader Chuck Schumer, who publicly opposed it back in Feb. 2021.
“Senate Majority Leader @SenSchumer reaffirmed his opposition to a bill seeking to advances the proposal to make Puerto Rico a U.S. state, & expressed his clear rejection of measures, such as Act 22, that turn the island into a tax haven for billionaires”https://t.co/TYWNo5esa6
— David Begnaud (@DavidBegnaud) February 19, 2021
Around the same time, in Feb. 2021, filmmaker and documentary journalist Andrew Padilla wrote about settler tax break history for The Daily Beast.
There is an acceptance among many settlers I have spoken with that gentrification is happening in Puerto Rico—and that they are part of it. Many of them are actively attempting to shield their capital gains in real estate projects. But U.S. residents are hesitant to call this process what it is: settler colonialism. As one investor told me, “This is gentrification, but it’s not colonization. Colonization is bloody.”
But colonization was about land titling, acquisition, and a broader reorganization of local bureaucratic processes to better address settlers’ needs as much as it was about bloodshed. Today, the settlers are rich migrants from the 50 states.
Act 22ers are very active in demanding what they want from the local government. As earthquakes and the pandemic gripped Puerto Rico in 2020, two separate groups of these settlers filed lawsuits to stop the local government from raising the meager contribution they are required to make in exchange for their generous tax savings. They not only fear an increase in the fee they pay for their tax breaks—Act 22ers fear that negative attention to Puerto Rico’s tax haven laws could make it less appealing for future settlers.
As my fellow Community Contributor SemDem wrote in December, Act 22/60 is not good for Puerto Ricans. Graulau covered the resulting displacement in this hard-hitting video report.
Take gentrification and tax breaks for settlers, and add them to the already unstable economy of Puerto Rico, which was hindered by debt even before Hurricane Maria. Sprinkle in the fact that the territory is powerless over its own debt resolution, since, under Barack Obama, the island’s economic future was placed into the hands of the unelected Financial Oversight Board, dubbed la junta by islanders. What do you get? A toxic stew.
Puerto Rico’s path out of bankruptcy was shortened last week when a federal judge approved a restructuring plan that reduces the island’s $70 billion public debt by about $26 billion, and reduces its yearly debt payments to about $1.5 billion, from $3.9 billion.
For the 3.2 million people who live there, the restructuring is just the latest example of an utterly failed colonial experiment.
It was a significant development in a decadeslong public debt problem caused directly by Wall Street, Washington and Puerto Rico’s political class. Years of financial mismanagement and reckless spending resulted in an “unpayable” debt. In an effort to scold the Puerto Rican government for its mistakes, a 2016 bipartisan Promesa bill, which was signed by President Barack Obama, established the creation of an unelected and politically appointed fiscal control board that would literally run Puerto Rico’s economy.
Welcome to colonialism.
The executive director of Puerto Rico’s Financial Oversight Board, Natalie Jaresko, earns $625,000 a year. She also recently “celebrated” the settling of Puerto Rico’s debt deal.
Congratulations, Puerto Rico! Judge Swain’s confirmation of the #PlanofAdjustment for the CW reduces the claims against the government from $33 billion to just over $7.4 billion. Financial stability. A new chapter to lead to renewed economic prosperity!
— Natalie Jaresko (@njaresko) January 18, 2022
It should be no surprise that there were many strong negative responses to Jaresko’s glee.
Strangling the local population through austerity measures while enriching non residential “experts” and the local elites. The imperial education of Harvard University strikes again! https://t.co/IuXnv0aQWc
— Diego Alcala 🇵🇷 (@DiegoAlcalaPR) January 18, 2022
The Power 4 Puerto Rico Coalition has also denounced the debt deal.
— Power4PuertoRico (@Pwr4PuertoRico) January 19, 2022
— Power4PuertoRico (@Pwr4PuertoRico) January 20, 2022
Common Dreams notes that “the island’s ability to resume growth and avoid cuts in anti-poverty programs are both chief concerns.”
Jubilee USA said while “there is room for optimism, only time can tell if the debt cuts were deep enough to prevent Puerto Rico from needing another debt restructuring in a few years.” “We remain concerned by some of the assumptions of the debt deal. The island’s ability to resume growth and avoid cuts in anti-poverty programs are both chief concerns,” said executive director Eric LeCompte.
Julio López Varona of the Center for Popular Democracy was far less optimistic, saying Swain “turned her back on Puerto Ricans and approved a debt adjustment plan that leads us down the path of austerity and bankruptcy.”
“The plan that was approved today is a plan predicated on continuing the suffering that we have suffered for decades and that has led thousands of people to leave the island while those who remain suffer from a lack of resources, basic services, and increases,” said López Varona. “This is not over, last year we worked with pensioners to achieve the elimination of pension cuts from this agreement. We will now take our claim to Congress and the White House to make sure the board can no longer abuse and pass legislation that helps us achieve the fair recovery we deserve.”
While the last week has been a busy one, these are just some of the issues currently facing Puerto Rico. Join me in the comments for more on Puerto Rico and the weekly Caribbean News Roundup.