Three Puerto Rico control-board members sue Trump over alleged unlawful firings

Three members of Puerto Rico's federal control board filed a federal lawsuit on Thursday, alleging their removals by the Trump administration were unlawful.

The complaint names former board chairman Arthur J. Gonzalez, along with Betty A. Rosa and Andrew G. Biggs, as well as President Donald Trump; it also lists Sergio Gor, the White House personnel director; John E. Nixon, the board's remaining member; and Robert F. Mujica, the board's executive director, as defendants. The plaintiffs say Gonzalez and Rosa were notified of their removal by a two-sentence email on Aug. 1, and Biggs received a similar notice about two weeks later; the emails offered no stated cause or justification for the actions.

Attorneys argue that Trump lacks inherent authority to terminate Gonzalez, Biggs or Rosa because they were not officers of the United States within the executive branch. PROMESA, enacted in 2016, created the fiscal oversight and management board to oversee Puerto Rico’s finances after the territory faced a deep debt crisis and a 2017 municipal bankruptcy—the largest in U.S. history. The suit maintains the board’s mandate is local, and removals for cause require notice and a hearing, which the plaintiffs say did not occur.

Experts say the case raises questions about the reach of federal power over territorial governments. If a president can remove territorial officers at will, the suit argues, the power could extend to other jurisdictions, including the District of Columbia. The board is supposed to have seven members, six of them presidential appointees subject to Senate confirmation, and they can be removed only for cause.

Eduardo Santacana of Cooley LLP, representing the plaintiffs, called the case about the balance of powers between the White House and local governance. The removal power, he said, is a central issue in the dispute.

Six board members have been fired by the Trump administration, including Cameron McKenzie, Juan Sabater and Luis Ubiñas; four of the six dismissed members were Democrats, while John E. Nixon remains the board’s lone Republican. Gonzalez is a former bankruptcy judge; Rosa is the commissioner of the New York State Education Department and president of the University of the State of New York; and Biggs is a former Social Security reform expert. The board was created under PROMESA to oversee Puerto Rico’s debt restructuring after the territory defaulted on more than $70 billion in debt and filed for the largest municipal bankruptcy in U.S. history in 2017. At the time of the firings, the board had pressed for a $2.6 billion payment and was engaged in talks with bondholders over more than $9 billion in debt connected to the Puerto Rico Electric Power Authority.

Analysts have cautioned that the removals could affect negotiations with bondholders and the timing of debt-service payments, though the suit does not address specific terms. The board is supposed to have seven members; six are presidential appointees serving three-year terms and removable only for cause, with the Senate's advice and consent required for appointments.