Archbishop and Evangelical Leader Tell Congress to Protect Puerto Rico in Tax Plans

As the Senate and House tax plans head to conference committee to reconcile tax plan differences, major religious leaders from Puerto Rico are asking Congress to protect the island from new proposed ‎taxes. Metropolitan Archbishop Roberto O. González Nieves, OFM of the Catholic Archdiocese San Juan de Puerto Rico and Puerto Rico Bible Society Secretary, Reverend Heriberto Martínez-Rivera wrote to Congress with their concerns.

"If Congress treats American citizens living in Puerto Rico differently than American citizens living in the 50 States by treating our island as a foreign jurisdiction, we believe recovery for our island home will be nearly impossible," wrote González and Martínez-Rivera in their letter to Congress.  "We respectfully request that all Members of Congress ensure that a final tax reform plan does not impose new excise taxes on Puerto Rico."

Working with Jubilee USA and US religious groups, the Archbishop and Evangelical leader have engaged Congress for nearly two years to move policies that promote economic growth and reduce the island's crippling debt load and high child poverty rate. In the recent letter they wrote to Congress, they ‎noted that tens of thousands of American jobs could be lost in Puerto Rico if the Senate and House conference committee did not strip the excise tax from final legislation.

"If Congress fails to remove this excise tax in their final tax package, it is just like hitting Puerto Rico with another hurricane," said Jubilee USA Director Eric LeCompte who advises Puerto Rico's religious leaders and serves on United Nation expert groups. "Before the hurricanes, we were dealing with a severe financial crisis and almost half of all Puerto Rican kids were living in poverty. We are now dealing with a full blown humanitarian crisis that Congress can make better or even worse."‎

Read Archbishop González and Reverend Martínez-Rivera's letter to Congress. 

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Jubilee USA Releases Tax Reform Statement

The Senate could vote later on Friday on a tax reform package. If a package passes the Senate, the House and Senate will likely use the conference committee process to reconcile differences between the final House and Senate tax packages.

Eric LeCompte, Executive Director of the religious development organization, Jubilee USA, releases the following statement:

“Any final tax reform package should support and protect vulnerable communities. I’m concerned that portions of the current tax plans will harm poor populations.

"A final tax package should not shifts greater tax burdens to the poor or constrict our budget from providing adequate foreign development assistance or disaster relief.

"We could see more developing countries borrowing more money and becoming more indebted as a result of less foreign assistance because of current tax plans.

“Current tax reform legislation moves the US to a so-called territorial tax system that encourages the use of tax havens and permits corporations to avoid paying US taxes and taxes in developing countries. Such a plan has a human cost and negatively impacts poor people at home and abroad.‎

“Puerto Rico and the US Virgin Islands are still struggling to recover from the aftermath of this hurricane season and they should not be subject to additional excise taxes that US states are not subject to. While Congress considers tax policies to promote jobs for Americans in the 50 States, those policies must also ensure that US citizens living in Puerto Rico and the Territories are treated the same. Puerto Rico and the US Territories will lose tens of thousands of jobs if Congress passes a final tax package with new excise taxes for the Territories.”

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Congress Tax Reform Package Could Harm Poor, Warns Religious Development Group

 As the Senate pushes tax reform, the head of a religious development group expressed concern over parts of the House and Senate proposals that could harm low income people in the United States and people in the developing world.

“Any final tax reform package should support and protect vulnerable communities. I’m concerned that portions of the current tax plans will harm poor populations,” said Eric LeCompte, Executive Director of Jubilee USA. “A final tax package should not shift greater tax burdens to the poor or constrict our budget from providing adequate foreign development assistance or disaster relief.”

The House and Senate will likely use the conference committee process to reconcile differences between the final House and Senate tax reform packages.

“Current tax reform legislation moves the US to a so-called territorial tax system that encourages the use of tax havens and permits corporations to avoid US taxes and taxes in developing countries,” noted LeCompte. “Such a plan has a human cost and negatively impacts poor people at home and abroad.”

Jubilee USA has worked with Congress for nearly two years on US financial policies regarding Puerto Rico. Portions of a final tax package could impact Puerto Rico and other US Territories according to LeCompte.

“As Puerto Rico and the US Virgin Islands are still struggling to recover from the aftermath of this hurricane season, they should not be subject to additional excise taxes that US states are not subject to,” stated LeCompte. “While Congress considers tax policies to promote jobs for Americans in the 50 States, those policies must also ensure that US citizens living in Puerto Rico and the Territories are treated the same. Puerto Rico and the US Territories will lose tens of thousands of jobs if Congress passes a final tax package with new excise taxes for the Territories.”

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Bond Buyer Interviews Eric LeCompte on Humanitarian Efforts in Puerto Rico

Eric LeCompte, Executive Director of Jubilee USA was recently interviewed by Bond Buyer to discuss relief efforts in Puerto Rico. Read excerpt below and follow link to full article.

Humanitarian Advocates Optimistic on Aid to Puerto Rico

By: Brian Tumulty

Laura Esquivel, director of national Advocacy for the Hispanic Federation, and Eric LeCompte, executive director of Jubilee USA Network, told The Bond Buyer they are hopeful Congress will rework the administration’s request and provide more funding[...]

LeCompte stressed the urgency of stepping up the recovery effort.

“I think Congress will step up and we will see in the coming weeks and months more packages around both relief and recovery and rebuilding aid as well as some financing issues addressed,” LeCompte said.

LeCompte said his organization supports having the oversight board established under PROMESA review contracts that are signed for spending federal funds in the recovery effort.

“There appears to be a need for some transparent and accountable way that contracts are reviewed," he said. “We just want it to be expedient and fast.” 

Read more here.

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Eric LeCompte Quoted by IRIN News on Debt Relief in the Caribbean

Eric LeCompte, Executive Director of Jubilee USA Network, was recently cited in IRIN News on debt relief in the Caribbean. Read excerpt below and follow link to full article. 

Recovery pledges for hurricane-ravaged Caribbean are a drop in the ocean

By: Samuel Oakford

Eric LeCompte, director of Jubilee USA, said his umbrella group of religious organisations was exploring ways of delaying payments and obligations over the coming months.

“That’s an issue where we’ve seen some progress, but we don’t have firm commitments from the IMF or Paris club over any kind of debt moratorium.”

Read more here

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Gifts are Doubled to Jubilee USA

Friends,

Thanks to your support, Jubilee USA is winning and growing.

Please join me and make a tax-deductible donation to Jubilee USA that will be matched up to $20,000 right now. Whether your gift is $5, $10, $25, $250 or $500 - it is so needed and so appreciated so we can continue to raise a budget to support our vital mission.

Already in 2017, we stopped "vulture funds," won a super bankruptcy process for Puerto Rico and moved Republican and Democratic corporate transparency legislation to protect vulnerable communities. With your support we moved the Trump White House to help stop global financial crisis. We pushed Congress and successfully defended protections for consumers and the poor.

We urgently need your financial support now as we move the IMF, Congress and the White House to support hurricane victims in Puerto Rico, Dominica, the US Virgin Islands and Barbuda. You're contributions are needed now to continue our emergency policy efforts to win recovery and relief aid for the millions affected by this hurricane season. And when you make a gift now to Jubilee USA, your gift will be DOUBLED.

New protections we win for Dominica, the US Virgin Islands and Puerto Rico will help protect vulnerable communities in every corner of the world. New policies we win for public budget transparency, debt relief and austerity prevention can be replicated in other parts of the world to alleviate suffering and lift millions out of poverty.

While we are grateful to work with many incredible groups on our efforts, many of the issues we work on are only worked on by Jubilee USA, our founding groups and member organizations. It is why we so depend on your gift. While our global impact is in the billions, many people think our annual budget is in the millions. However, while our annual budget is growing, its only about $600,000. Its why any size gift is so important, why its needed and why it goes such a long way.

Jubilee USA is a small organization with a big "David versus Goliath" impact and when you give a tax-deductible gift today it will be matched up to $20,000.

I'm so grateful for your partnership and to be able to do this work with you. Thanks in advance for supporting our Jubilee USA efforts.

Gratefully,

Eric_Signature.transparent.jpg

Eric LeCompte
Executive Director
Twitter: @Eric_LeCompte
www.jubileeusa.org/support-us

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Jubilee USA End of Year Report

At Jubilee USA we have a lot to be grateful for this year. Because of our partnership our efforts increased transparency, stopped corruption, prevented financial crisis and protected vulnerable communities around the world.

Our "2017 Year End Report" highlights the reasons why we are so grateful this year. You can read how we stopped 'vulture funds,' won a super bankruptcy process for Puerto Rico and also introduced Republican and Democratic corporate transparency legislation to protect vulnerable communities. You will also learn how we moved the Trump White House and Congress.

In the report you will be able to read a month-by-month review of what we achieved together this year. In January we pushed Congress to protect corporate transparency requirements, in April we successfully defended consumer and anti-poverty protections, in May we won bankruptcy for Puerto Rico, in June we moved the White House to help stop global financial crisis and in September our team leaped into action to protect hurricane victims.

When you read our "2017 Year End Report," you will see images that define our year with Puerto Rico meetings and Congressional Briefings. You will also learn about how Jubilee congregations collected thousands of hurricane relief petitions and read about the thousands of media mentions, including our director Eric LeCompte's appearance on CNBC and his address to the United Nations.

Thanks again for making our work possible.

 

Jubilee USA End of Year Report 2017






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FASB: Corporate Transparency Curbs Corruption, Poverty

Washington DC - Jubilee USA, a religious development group, asked the Financial Accounting Standards Board (FASB) to require greater disclosure of what payments corporations make to governments where they operate. The Securities‎ and Exchange Commission designates the FASB as the body that sets accounting standards for public corporations in the United States.

In a letter to the FASB, Jubilee USA's Executive Director Eric LeCompte wrote, "The developing world loses more than a trillion dollars a year because of tax evasion, tax avoidance and corruption. The problem is difficult to address because of a lack of public data.‎"

Development groups like Jubilee USA view stronger reporting standards as a vehicle to raise revenue for human needs in the United States and around the world.

"It's critical that large companies report their income, assets and numbers of employees for every country where they do business," said LeCompte regarding the letter. "This basic reporting can stop corruption and raise money to address poverty."

Read Jubilee USA's full letter to FASB click here.

Jubilee USA Network is an alliance of more than 75 US organizations and 650 faith communities working with 50 Jubilee global partners. Jubilee USA builds an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA wins critical global financial reforms and won more than $130 billion in debt relief to benefit the world's poorest people.
www.jubileeusa.org

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Available for interview: Eric LeCompte, Executive Director
Contact: Lydia C. Andrews, Deputy Director
lydia@jubileeusa.org | office:(202)783-3566 x109 | mobile:(847) 72-2305

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Have a Blessed Thanksgiving from Jubilee USA!

Friends,

I want to wish you and your loved ones a Blessed Thanksgiving.

We give thanks for the abundance that God gives us. In community we work so that abundance is shared among all people. We remember so many in our global community struggling this Thanksgiving in Puerto Rico, the US Virgin Islands, California, Texas, Barbuda, Dominica, Florida and famine-hit Africa. We remember and we continue our work so that all have enough in the face of crisis.

We also give thanks as our partners celebrate new possibilities in Zimbabwe.

In this time of challenge and hope, I'm most grateful that we continue this journey together.

So very grateful for you,

Eric_Signature.transparent.jpg


Eric LeCompte
Executive Director
Jubilee USA Network
(202)783-3566
Twitter: @Eric_LeCompte
www.jubileeusa.org/support-us

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Eric LeCompte Speaks at United Nations on Debt, Development and Resilience

Jubilee USA's Director Eric LeCompte spoke at the United Nations in Geneva, Switzerland for the UN Conference on Trade and Development ‎11th Debt Management Conference. Read his remarks on debt, tax and transparency policies that address the root causes of poverty. Read the speech below or attached here

 

11th United Nations Conference on Trade and Development Debt Management Conference
‘Development Finance at the Cross Roads: What Role for Public Debt Management?’ 

Panel 6: When is debt sustainable?
United Nations
Geneva, Switzerland 

“Ensuring Sustainable Debt, Development and Protections from Economic Shocks”

Eric LeCompte, Executive Director of Jubilee USA
November 14th, 2017
Remarks As Prepared for Delivery

 

I want to extend my gratitude to all of the organizers and the UNCTAD for this conference and for their continuing and essential convening role on these vital issues.

My organization, Jubilee USA is part of the broader community of global organizations that coalesced around resolving debt crisis in the poorest countries of the world over 20 years ago. Jubilee USA moves forward global policies that address the root causes of poverty and inequality related to debt, tax, trade and transparency issues. In the United States, Jubilee USA’s founders and members include the US Conference of Catholic Bishops, American Jewish World Service, Islamic Relief, the United Church of Christ and most mainline national Christian Churches.

In the 1990’s we began our work to address inequality and finance development by addressing the global debt crisis. Together we won two great debt relief and financing initiatives to address global poverty and promote children’s education and health: The Heavily Indebted Poor Country Initiative (HIPC) and the Multilateral Debt Relief Initiative (MDRI). Because of these initiatives, over $115 billion was won in debt relief to benefit some of the world’s poorest countries. Because of that debt relief we know in sub-Saharan Africa that more than 52 million kids went to school who never would have seen the inside of a classroom. We know that school fees were cancelled, hospitals were opened, because of this historic initiative, because of this relief and the international accountability laws that we won, all of this money had to go into building social infrastructure. World Bank President Jim Kim cites debt relief as one of the two reasons we see sustained economic growth in some countries across Africa.

It was out of these initiatives that concepts around achieving debt sustainability were born. 

Unfortunately, as successful and important as HIPC and MDRI were, we now realize that those solutions were not enough to entirely grasp the problem. Out of the 38 very poor countries that benefitted from the HIPC and MDRI initiatives, 31 again face debt distress, financial crisis or unsustainable debts. 31 out of 38.

But not only has that crisis impacted and returned to some of the world’s poorest countries, we have also seen it impacting middle-income and even developed countries. From 2009 to 2014, debt service in Africa nearly doubled. While at the same time in the same countries in Africa, we saw spending on health care decline. We are currently seeing a tragic situation on Small Island Developing States or SIDS across the world, many of these islands with poverty rates that range from 30% to 50%. These so called Middle-Income Small Islands are now facing crisis, just as so-called middle-income countries in Africa are facing similar crises.

These new crises have become more complicated. Debt itself has changed and the instruments of debt have changed. Where 20 years ago, debt was relatively quarantined to a rather small group of lending facilities, international financial institutions, governments and bonds - now we see more complicated instruments and a broader array of types of credit and debt.

With this new reality and this lack of debt sustainability there is a small group of exploitative hedge funds that are trying to benefit from countries wrestling with financial crisis. These so called “vulture funds” are responsible for predatory behavior in Detroit, in Greece, in Argentina and were recently stopped in Puerto Rico by an act of the US Congress. So called “vulture funds” buy debt for pennies on the dollar and then sue in full using aggressive litigation tactics to collect the full amount. These types of funds have successfully collected aid monies that were intended to provide development financing in the developing world. Some of the victims of this behavior sit here in this room.

In 2016 and 2017 the IMF and World Bank reviewed their sustainability framework. The current framework offers a lot of valuable information and pulls together much needed analytical data. As my co-panelist Martin Guzman raised in his remarks, debt sustainability frameworks need to be discussed in relation to strengthening global policies on debt restructuring and responsible lending and borrowing. Further debt sustainability analysis could be strengthened by ensuring they take into account issues such as development, improving flexibility to reevaluate after external shocks and reviewing fiscal targets to ensure that tax evasion and corruption are curbed.

We and the religious organizations that we represent and work with around the world, believe very much that debt sustainability works hand in hand with public budget transparency and responsible lending and borrowing. Beyond preventing predatory financial behavior, public budget transparency and responsible lending and borrowing can provide financing of billions of dollars annually for the developing world. Both in the monitoring of debt levels and in the financing for development, these issues cannot be separated from debt sustainability.

These concepts are reiterated in the very promising recent work of the G20 which the US Government and G20 endorsed over the summer: the Operational Guidelines for Sustainable Development. This also compliments the strong consensus building work over the last 6 years with UNCTAD’s efforts on responsible lending and borrowing. 

These conservative stewardship policies cost nothing and can raise billions in the developing world.

Further it’s why we support improved debt restructuring at the International Monetary Fund. It is why we supported the United Nations General Assembly process to create a legal global bankruptcy framework. Similar to Chapter 9 or Chapter 11 in the United States, global bankruptcy can provide the same kind of stability we rely on in domestic economies into the global financial system. Pope Francis supports such a system to provide financing to end poverty. Adam Smith the father of modern economics believed global bankruptcy is critical for global stability. We believe that a country’s debt can be called sustainable after the debt is adequately restructured.

For debt sustainability frame works to be effective, they must work alongside public budget transparency, responsible lending and borrowing and stronger restructuring regimes.

I would offer that debt sustainability frame works to be effective must also take into account development, external shocks and fiscal policy.

In terms of issues around development, debt sustainability frameworks must take into account the reality that poor populations and vulnerable communities often do not have their needs met when “sustainable” debts are paid. There needs to be a greater efforts in analyzing the sustainability of a debt when the basic needs and economic rights of people are not met.

Next, external shocks can immediately change the debt dynamics of an economy. Antigua and Barbuda, Dominica and so many Caribbean islands have been decimated by hurricanes. Our partners in Dominica can testify to this reality. Bishop Gabriel Malzaire who leads the Catholic Church on the island and is the President of the Caribbean Catholic Antilles Episcopal Conference, sent a letter to the International Monetary Fund. His letter on behalf of Caribbean Catholics, called on the IMF and other creditors to temporarily delay debt payments for islands like Antigua and Barbuda recently ravaged by Hurricane Irma. Debt sustainability frame works must have the flexibility to adjust to external shocks.

When disaster strikes, when famine spreads and when economic crisis impacts the poor, we need to be able to reevaluate these situations. In line with our previous thoughts on improving debt restructuring and looking at Chapter 9/11 styles of bankruptcy – it seems the Caribbean would be a perfect candidate for a regional Caribbean initiative. This post HIPC initiative, could be a regional initiative with the high debt distress many Caribbean countries are experiencing. It can utilize the principles of bankruptcy for a regional Caribbean mechanism.

Finally, debt sustainability also must rely on improved fiscal policies that curb tax evasion and corruption. Standards can be set in debt sustainability frameworks that provide targets to governments to curb illicit financial flows, tax evasion, corruption and corporate and professional tax avoidance. We also acknowledge the growing issues around tax evasion, illicit financial flows, anonymous shell companies and corporate tax avoidance. As the President Mbeki report noted, one of the greatest diversions of financing for human needs is because of tax evasion and corruption. Last year the UN Conference on Trade and Development (UNCTAD) released a study on five countries that showed how much money they were losing because of “trade mis-invoicing.” Currently we believe that 80% of all illicit financial flows are because of trade mis-invoicing at borders and port authorities. This is actually a relatively easy problem to tackle, and this particular problem if tackled could secure more than $1 trillion a year to provide financing and support economic growth in the developing world. Addressing corruption, tax evasion, corporate tax avoidance, anonymous shell companies and related issues should be addressed.

In closing, to achieve true debt sustainability and ensure effective frame works, we need to include a number of particular issues and promote stronger policies around public budget transparency, responsible lending and borrowing, securing greater development protections, stronger debt restructuring policies and fiscal policies that curb tax evasion and corruption. 

Thank you.

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