Puerto Rico: University Cutbacks Pay for Wall Street Bonds

Posted on June 7, 2010

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PRHUELGA

*3. Puerto Rico: University Cutbacks Pay for Wall Street Bonds

In meetings with striking students on June 2 and June 4, officials of the University of Puerto Rico (UPR) announced that the public university was $200 million in debt and that they intended to cover the debt with $200 million in tuition surcharges over the next three years—about $1,000 for each student. There will also be an “enormous reduction” in the pay to university employees, Board of Trustees president Ygrí Rivera said; this would be done through lower salaries and other cutbacks, not layoffs. Finally, UPR officials plan cuts in the budgets for books, professional services, scholarships and other aid to students, and the purchase of equipment.

Students went on strike at the Río Piedras campus in San Juan on Apr. 21 to oppose budget cuts, and the protest has spread to 10 of the 11 campuses of the UPR, which has a student body of about 65,000 [see Update #1034]. The strikers’ National Negotiating Committee has refused to give in on the cutbacks; committee members released a video on the internet and through the student radio station, Radio Huelga (“Strike Radio”), outlining what they considered the movement’s achievements and demands.

UPR authorities say that with the Puerto Rican government reducing its subsidy to the university, they need a loan of $40 million if they are to meet the payroll in July. Scotia Bank, Banco Santander and the government development bank, Banco Gubernamental de Fomento, all turned down UPR’s requests for a loan.

But the Argentine blog Argenpress says the main problem is the more than $700 million in bonds UPR has floated over the years on Wall Street financial markets. Much has been for massive construction projects, including the $78 million in bonds that helped finance Plaza Universitaria, a complex of buildings that has been turned over to a private company. A bond sale in 2004 was handled by Sidley Austin LLP, a large US corporate law firm. A Sidley Austin attorney, Thomas Green, later led the defense of former governor Aníbal Acevedo Vilá (2005-2009), who was acquitted of multiple corruption changes in US federal court in March 2009. (Primera Hora (Puerto Rico) 6/5/10; Argenpress 6/3/10)

Posted in: Imperialism, US