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Washington • A shadowy group is running radio ads in Utah blasting Rep. Rob Bishop for legislation aimed at rescuing Puerto Rico from its massive debt problems, but the Utah Republican says the advertisements are simply false.
The Center for Individual Freedom, a dark-money group that does not list its backers, is airing ads on KSL and KNRS saying Bishop has unveiled a "radical plan called Super Chapter 9" to allow the U.S. territory bankruptcy protection that will hurt seniors and damage Utah's ability to borrow money.
Puerto Rico created its own crisis, the ad says. The island's government is $70 billion in debt and an additional $46 billion in mostly unfunded pension liability.
"What's worse is that Congressman Rob Bishop is standing with the Obama administration to support a bailout of Puerto Rico instead of supporting negotiations between Puerto Rico and its creditors," the ad says.
Bishop, who leads the House Natural Resources Committee, which has jurisdiction over U.S. territories, says the ad's claims are "false."
"The purpose of the bill is to create a board to help fix the financial house in Puerto Rico without harming taxpayers," Bishop said. "There will be no bailout, no bankruptcy, no super chapter 9. These issues were eliminated before we started working on a draft, therefore any reference to them now is a scare tactic."
Bishop's legislation — released March 29 as a "discussion draft" — would create an oversight board that could file petitions in federal court without local approval. The board would be able to audit the government and its corporations, and seek efficiencies and improve revenue streams. The bill wouldn't allow Chapter 9 bankruptcy proceedings, as congressional Democrats had sought.
Puerto Rico may reach voluntary deals to fix its debt under the legislation but the board can step in without control of Gov. Alejandro Garcia Padilla or legislative assembly.
Bishop says his draft measure would not include any provision for taxpayer money to cover Puerto Rico's debt.
"Puerto Rico is not a state and any program dealing with it, or any territory, will not impact, nor set precedents for, states or municipalities," he said in a statement. "At the end of the day, we will have a good bill that helps Puerto Rico and protects all taxpayers."
House Speaker Paul Ryan, R-Wis., who had asked for Bishop to come up with a bill by the end of March, applauded Bishop's proposal.
"This draft is thoughtful, comprehensive legislation that gives the U.S. territory the tools it needs to deal with its systemic fiscal and budgeting problems — without a taxpayer bailout," Ryan said. "I look forward to working with the committee so we can get Puerto Rico on a path to fiscal health."
The White House has praised Bishop for coming up with a plan, though said it still needs work.
Bishop's measure, though, brought a swift rebuke from Pedro Pierluisi, Puerto Rico's nonvoting member of Congress, who said that any legislation that takes away local control is undemocratic.
"The oversight board must have teeth, but not fangs," he said. "As a territory, Puerto Rico lacks democracy at the national level, so a bill that suppresses — rather than supervises — our democratic process at the local level cannot stand."
The Center for Individual Freedom is also spending $200,000 in the Washington, D.C., area on TV ads to attack Bishop's proposal. The group is a 501(c)4 nonprofit and doesn't have to disclose its donors but the Sunlight Foundation noted that Crossroads GPS, which is tied to political consultant Karl Rove, gave the center $5 million in 2011.