June 1 (UPI) — The U.S. Supreme Court on Monday ruled against a labor union and a hedge fund that argued a government oversight board created to improve the island’s financial stability is illegitimate.
Congress created the board in 2016 to increase the territory’s financial stability, which was impacted by the financial crisis and natural disasters like Hurricane Maria, and now the coronavirus pandemic.
The challenge threatened to disrupt billions of dollars worth of debt restructuring the board has made over the past four years.
Investor Marc Brodsky of Aurelius Investment, which owns some of Puerto Rico’s debt, and local labor union UTIER argued that appointments under former President Barack Obama were unconstitutional because they lacked Senate confirmation.
In its ruling Monday, the Supreme Court disagreed. Associate Justice Stephen Breyer said the board members don’t need Senate confirmation, as they have “primarily local powers.”
“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,” Breyer wrote.
The high court voted unanimously against the challenge.
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