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Archive for the ‘In the News’ Category
September 3, 2010
Puerto Rico gov’t gives sweeteners to property buyers
MIAMI, Sept 2 (Reuters) – Puerto Rico’s governor on Thursday signed a law authorizing property-tax breaks and other government incentives to stimulate the U.S. commonwealth’s beleaguered real estate markets. (more…)
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August 24, 2010
Puerto Rico Governor Fortuno Proposes Plan to Stimulate Housing
Bloomberg News
By Simone Baribeau
Puerto Rico Governor Luis Fortuno
proposed tax breaks, bank incentives and other measures to boost
the commonwealth’s housing industry and rid the market of more
than 10,000 unsold new homes.
The program, aimed at both local residents and U.S.
investors, would eliminate sales taxes on homes bought in its
initial nine months and drop levies on rental income and capital
gains. It also would provide insurance for 17 percent of a
mortgage’s principal.
“There will be a boom,” Fortuno said in a telephone
interview Aug. 20 from San Juan, the capital. “The consumer
will see that this is a once-in-a-lifetime opportunity.” The
package will be considered in the legislature later this month,
where it’s supported by the leadership of both houses, he said.
Fortuno took office in January 2009 as the first Republican
governor elected in 40 years. He promised spending cuts to
reduce what was a $3.2 billion budget deficit and policies to
help restore a credit rating lower than any state’s. He’s cut
23,000 government jobs so far and reduced expenses in next
year’s budget almost 20 percent from when he took office,
according to the Government Development Bank, Puerto Rico’s
financial agent.
The housing measure is meant to reduce a glut of unsold
homes and stem price declines that followed a market collapse
two years ago. Puerto Rico home prices rose 51 percent from 2000
until the market peaked in the third quarter of 2008, according
to the Federal Housing Finance Agency. Prices fell 9 percent
from then to the end of 2009.
Vacant Homes
About 10,500 finished or almost-finished homes are sitting
vacant, said Graham Castillo, president of Estudios Tecnicos, a
consultant in San Juan that works with banks and homebuilders.
“If the program is effective, we will get rid of the
accumulated inventory in one year,” said Castillo. “How
effective it will be will depend on the actual situation with
the credit scores of those individuals wanting to purchase a
home.”
Under the program, local and international investors could
buy property between Sept. 1 and June 30, 2011, the end of the
government’s current fiscal year, without paying transfer taxes,
property taxes for five years or capital gains taxes. Any rental
income from properties bought during the period would also be
tax exempt for 10 years.
“There could be an interest in purchasing not just one
property, but actually a number of properties to be put into the
rental market,” said Fortuno.
Aid for Moderate Earners
The measure would also expand the commonwealth’s current
program aimed at low-to-moderate-income Puerto Ricans, said
Gilberto Monzon, director of the mortgage lending division at
Banco Popular de Puerto Rico, the island’s largest bank.
Under the new rules, a bank would be able to lend 105
percent of the value of the house, with the first 17 percent
being insured by the government program. The bank or an insurer
would be responsible for the next 88 percent of the losses.
That may not be enough, said Sergio Marxuach, policy
director at the San Juan-based Center for the New Economy, a
researcher. Puerto Rico’s unemployment rate in July was 16.1
percent, compared with 9.5 percent in the U.S.
“Banks would have to be willing to lend,” he said. “I
don’t think that’s going to happen.”
The Federal Deposit Insurance Corp. took over three Puerto
Rico banks on April 30 holding about a quarter of the
commonwealth’s deposits, according to the FDIC and the U.S.
Federal Reserve.
Monzon at Banco Popular said the housing program would
boost lending.
“This creates a vehicle to get people who weren’t in the
market purchasing,” he said. Also, “you’ll be able to sell
some of the projects that are now in your inventory,” he said.
Lowest Investment Grade
Puerto Rico’s general-obligation debt, tax-exempt in any
U.S. state, is rated BBB- by Standard and Poor’s, its lowest
investment grade. Moody’s Investors Service, which rates Puerto
Rico fourth-lowest investment grade, at A3, cut its outlook on
the commonwealth on Aug. 10 to negative from stable.
Effectively cut off from credit markets, the government
borrows through the Development Bank, which issues bonds backed
by sales taxes. The debt, known as Cofina bonds for its Spanish
acronym, are rated A2 by Moody’s and AA- by S&P and A+ by Fitch
Ratings.
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August 24, 2010
Incentives and Vía Verde will spur economic development
by The Puerto Rico Daily Sun staff
Private Sector Coalition spokesman Francisco Rodríguez Castro said the organization entirely supports the Housing Department’s incentive and the Vía Verde project, as initiatives that comply with the Economic Development Plan presented by the Coalition.
Rodríguez Castro reported that these government initiatives were endorsed after considering an evaluation of the proposals made by the Puerto Rico Association of Engineers and the Home Builders Association, both members of the Coalition. The PSC is composed of 23 organizations which represent more than half a million private-sector workers.
“After a careful assessment on behalf of the associates of the Coalition, we want to express our support for these projects; they are tools that will enable us to move the housing inventory and lower energy costs for homes and for the industry,” said Rodríguez Castro.
The new Housing Department incentive brings an important boost of confidence to this sector. The spokesman explained that by significantly reducing the housing inventory in Puerto Rico, the banking industry will have the freedom to offer more loans to business persons, consumers, industrials, and other groups, leading Puerto Rico towards the desired economic growth.
“The energy reform has been a pillar for the Coalition’s Economic Development and Reactivation Plan. In the short term, natural gas is an option that enables the diversification of Puerto Rico’s energy sources, which is essential in order to acquire an energy supply that is cleaner and cheaper than petroleum,” said Rodríguez Castro. Another supporter of employing natural gas as an energy source is Miguel Torres, president of the Puerto Rico Association of Engineers and Surveyors. Torres mentioned that the Engineers Joint Committee evaluated the Vía Verde plan and concluded that “natural gas is what Puerto Rico needs to make the transition to renewable energy sources, since it is a more inexpensive fuel and it causes less environmental damage.”
Torres explained that generating electricity with natural gas is a practice that has been proved and used all over the world. “Fossil fuel is the least contaminating type. It is the safest, most inexpensive energy source, having one of the highest energy efficiency rates, “he said.
Torres argued that natural gas is safer than other types of gas, since it is light and evaporates quickly, existing naturally in our environment. He added that after analyzing and comparing security facts from the U.S., it was concluded that there is a minimal, almost non-existing proportion of deaths or accidents. “The security parameters for these gas systems are so high that, proportionally and statistically, it would represent a single accident with one death every 563 years and one accident every 341 years. This would be if we compared the Puerto Rico system (which would measure 91 miles) with that of the United States, the U.S.’s, where there are about 300,000 miles of pipelines,” Torres assured.
Pedro Watlington, president of the Manufacturers Association, said the reduction in energy costs promised by the Vía Verde Plan will help stabilize the manufacturing and services industries.
“We urgently need to reduce energy costs in order to acquire stability in the industry sector and avoid business desertions,” said Watlington. “The first step will be a decrease of at least 10 percent in the energy bill. However, there must be consistency in order to keep Puerto Rico at a globally competitive level. Energy costs are one of the greatest difficulties industries and businesses have to face. This is one of the triggers that cause manufacturers to choose jurisdictions with lower operational costs over Puerto Rico,” he emphasized.
According to the governor, high energy costs have caused numerous industries, both native and multinational, to close down, resulting in more than 135,000 layoffs in the private sector since 2006. Meanwhile, concerning the housing incentives, Home Builders Association President Hans Moll said that “since 2004, about 60,000 jobs have been lost in the construction sector.”
With the incentives program, the government aims to reduce the housing inventory from this September to June 2011 and encourage economic development, as well as to protect and create jobs.
These reliefs should facilitate the process of buying a house and encourage leasing of new and existing residential real estate to provide an alternative to those who cannot afford to buy a home.
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August 19, 2010
Gov. Fortuño reveals plan to sell 20,000 houses
by Raul Colon / Puerto Rico Daily Sun
With the housing market in critical state, Gov. Fortuño unveiled a comprehensive stimulus package aimed at reducing the large inventory of unsold new homes, estimated at 20, 000.
“We want to make buying a home a more plausible reality for all. That’s why we are submitting one of the most far reaching stimulus packages today. A home is one of the most important parts of the family structure and we want to solidify that,” said Fortuño in announcing his plan.
Currently, the government has the locally-based ‘COMBO’ package aimed at helping low-to-medium income families purchase their first home. As of Aug. 15, a total of 7,726 units had been sold through the program at a total value of $1,020 million. The average price of the units sold was $132,000.
To that program, the administration now adds the “En-Larger COMBO,” which includes all sectors of the market. Two main sub-programs comprise the new effort.
There’s a window of nine months, from Sept. 1 to June 30 2011, to take advantage of the incentives.
“Because we want to make a quick impact on the market, we placed a window of nine months for the people to act on several or all of the stimulus measures,” the governor said.
The first, known as Housing Stimulus 2011 Program, deals directly with the prices attached to buying a home. Unlike the original COMBO, which was primary aimed at low-to-medium income families, HS 2011 covered the entire financial spectrum.
The program is composed of seven incentive packages.
. A full exception on paying any Treasury Department financial stamps or payment receipts on new houses. On existing homes, the reduction is 50 percent. Currently a $300,000 home buyer pays on an average, $5,000.00 in stamps and receipts.
. Zero payment on Treasury cancelation stamps and receipts when selling an existing property.
. Zero property tax on any new home purchased up to 5 years after the sale.
. No capital gains tax on residential homes sold now. Commercial property receives the extension upwards of $3 million.
. No capital gains tax on future residential sales. Existing homes pay only half of their capital gain taxation.
. An increase from $1,000 to $5,000 in the mitigation loss cushion.
. Zero tax payment on rental properties for 10 years starting January 2011.
When adding these measures to the original stimulus package, the prospective buyer could in theory buy a home with as little investment as $2,000, on an average, for a home priced at $300,000 or less.
“With this package, we want to make buying a home an easy and more importantly, affordable, experience. Now, a family could afford to buy a home without investing most of its capital,” the governor said.
Supplementing HS 2011 are two additional measures.
The program known as My Security Mortgage will serve as the primary financing source. The mortgage institution selected for the transaction could lend up to 105 percent of the cost of the new home with an insurance coverage of 17 percent.
The most attractive part of the program is that if qualified, a buyer will not have to dispense any money at the moment the purchase is completed.
The third leg of the program is named My New Home. It would grant discount checks from $5,000 to $10,000 for new home buyers. Funding for this program comes from unclaimed funds totaling $50 million.
All seven measures need approval by the Senate. The governor stated that the bill, which includes all seven, is already crafted and will be submitted today.
Positive feedback
Gilberto Monzón, Executive Vice-President of Popular Mortgage, was thrilled, calling the stimulus packages a “home run” and “a sure winner.”
“This is the most comprehensive financial package ever assembled by our government. It hits all aspects, from property and capital-gains taxes to rental allocations. This will allow us to move the inventory quickly and expeditiously,” he said.
San Juan Mayor Jorge Santini did not have sufficient time to read the entire package. Still, he offered a passive support to “any measure that allows banks to lend more.”
“I will examine the governor’s suggestion very carefully and if I think it will stimulate the banking sector in order to approve more loans so people in San Juan can buy a home, I will be for it,” Santini said.
San Juan has the largest inventory of unsold new houses on the island, with approximately 9,000 available units.
Hans Moll Stubbe, President of the Puerto Rico Home Builders Association, couldn’t contain his enthusiasm for the new project.
“This is an unprecedented effort by the administration to stimulate the construction sector. His [Fortuño] pronouncement not only goes to the new home sector but helps the rental area as well, which will increase opportunities for the buyers,” he said.
New Progressive Party Sen. Larry Seilhamer, chairman of the Urbanism and Infrastructure Committee, said he will act immediately to enact the legislation the administration plans to submit.
“This as an important piece of legislation and as such, we will consider it in an expeditious manner. I believe we could have a bill ready for the governor to sign in two weeks,” the Ponce district senator said.
His counterpart in the House of Representatives, Pedro Cintrón, concurred with the need to fast-track the measure. “The state of the market badly needs a piece of legislation as strong as this one. Because of this we need to act immediately,” he said.
Fortuño said that even if the bill is not signed by Sept. 1, he will make it retroactive to that date.
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August 10, 2010
PR Gov. Fortuño Green Lights Natural Gas Pipeline
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| CaribbeanBusiness
The island government and its Puerto Rico Electric Power Authority will go ahead with its natural gas conversion plan to cut energy costs, with the results becoming tangible on electric bills as soon as December.
Gov. Luis Fortuño on Monday provided details of the project, dubbed “Vía Verde (Green Route),” to distribute natural gas from the Peñuelas-Guayanilla area north to Arecibo’s Cambalache plant through a pipeline, and then on to power plants in Palo Seco and San Juan.
To achieve this, Prepa will convert several oil-fired plants to natural gas, starting with Costa Sur’s units 5 and 6, which should be up and running next December. Subsequently, Prepa plants Cambalache, Palo Seco units 3 and 4, and San Juan units 5 through 10 will convert to natural gas, phases scheduled to be complete by the end of next year.
These conversions would boost natural gas generation to a whooping 71% (and reduce oil power to 12%) by 2012, Fortuño said.
“The first phase, Costa Sur, would bring savings of $113 million to our citizens, by reducing energy costs by the end of this year,” said Fortuño.
The pipeline from Costa Sur to Arecibo, and then to San Juan should be operating by December 2011, bringing more than $1 billion in additional savings to Prepa clients, according to Fortuño.
Fortuño also said that both the conversion of Costa Sur to natural gas and the construction of the pipeline that would carry the natural gas to the north would start “immediately.”
More than $350 million would be invested in Vía Verde, which would also create between 4,000 and 5,000 direct and indirect jobs during its construction phase.
“These phases will lead the way to our energy diversification plan with the goal of moving towards cleaner, safer and cheaper energy generation, which will benefit residential, commercial and industrial clients of Prepa, as well as the environment by reducing carbon emissions,” said Fortuño.
As result of the plant conversions to natural gas, carbon emissions would be cut by an average 64% per year.
“Simultaneously, we have signed eight renewable energy contracts: four wind-energy projects in Guayanilla, Arecibo, Naguabo and Santa Isabel; one solar energy project in Guayama and three solid waste projects in Caguas, Arecibo and Manatí,” Fortuño said.
The Fortuño administration is evaluating additional renewable-energy proposals that include wind-energy and bio-diesel projects.
Emphasizing the security measures built into Vía Verde, Fortuño highlighted the differences between this project and the aborted south coast pipeline.
Upon entering office in 2009, the administration scuttled a southern gasoduct, which would have extended from Peñuelas to Guayama, in the face of fierce opposition by environmentalists, community leaders and mayors. Arecibo Mayor Lemuel Soto and other politicians and community groups have already stated their opposition to a gas pipeline running from the southern to northern coast.
“We have established a distance of 75 feet to each side of the pipeline, to ensure a prudent separation from residences. I have given specific instructions to avoid passing the pipeline through or close to communities, even when this results in higher costs, because safety is first,” said Fortuño.
In addition, Fortuño said his administration will reach out to communities where the pipeline will pass near to address any concerns they have regarding natural gas and the Vía Verde project.
The 91-mile long, pipeline would run four feet underground through the PR-10, from Ponce to Arecibo, and through the PR-22 from Arecibo to San Juan.
“This is a very ambitious project that would allow us to be more competitive from manufacture to tourism, among other industries, as well as create and save jobs,” said Fortuño.
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July 20, 2010
Gov. Fortuño Signs Three Energy Bills
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Puerto Rico Daily Sun
July 20, 2010
Energy and Environment
For every $100 that a Puerto Rican earns, $12 goes to pay for electricity.
“We are facing an energy crisis, because of our dependence on oil and an obsolete infrastructure,” said Gov. Fortuño as he signed three measures that, taken together, create an aggressive plan to rescue the environment, reduce energy costs and create thousands of so-called “green” jobs.
The unbridled use of sources of energy derived from petroleum adds to the volatility of energy costs on the island, and therefore adversely affects Puerto Rico’s competitiveness.
Every year, the cost of petroleum increases and it is expected to continue climbing. This year, we spent more than $5 billion in the importation of combustibles.
The first of the measures signed is the “Law for Energy Diversification by Means of Sustainable Renewable Energy.” It sets compulsory targets for reduction in conventional energy use and increased use of renewable energy. Under this portfolio, the law requires us to produce 12 percent renewable energy by 2015 and 15 percent for 2020. Development of a plan to achieve 20 percent energy production from renewable and alternative sources by 2035 is also required.
The law creates “renewable energy certificates.” These will be awarded to each energy supplier to produce one megawatt hour of electricity using renewable energy, setting a financial market around this new industry. The certificates also serve to promote the achievement of companies that produce electricity through renewable sources. The Renewable Energy Commission will ensure compliance of our goals for economic development, environmental protection and public health.
The second measure is the “Energy Tax Incentives Act of Green Puerto Rico.” This law allows all citizens to contribute to solving the energy problem. Citizens who qualify may receive up to 60 percent cash reimbursement for investment in renewable energy for homes and small businesses, and up to 50 percent for midsize businesses that install energy efficient equipment.
In addition, the bill provides for a Green Energy Fund, which provides $20 million in 2011 and increases to $40 million in five years for a total of $290 million intended to promote this industry.
“These two legislative measures will create more than 10,000 green jobs over the next five years and achieve an estimated investment of $4 billion over the next 10 years,” said the Governor.
At the same time, Fortuño issued an Executive Order to implement faster processes for development projects that promote diversification in the use of alternates to oil, while promoting the use of renewable and alternate energy sources.
“This allows us to use available federal credits for certain initiatives, starting alternate energy projects this year,” he said. To date, the PR Electric and Power Authority has signed contracts with seven companies, investors who are ready and willing to work on renewable energy projects under these new laws. Taxpayers will be able to see a relief in his out-of- pocket costs, while protecting our island. Among the companies are: Pattern (Santa Isabel), AES Solar (Guayama), Energy Answers (Arecibo), Sunbeam Caribbean (Barceloneta), Windmar (Guayanilla), GO Green (Naguabo) and IWT (Caguas).
“I am convinced that today we take an advanced step to rescue our environment, and[in so doing] we all win. Our consumers will see a reduction in heir electric bill, business people will have more efficient businesses, investors can enter and be competitive the global market for green energy, and every Puerto Rican enjoy a better quality of life and better employment opportunities,” concluded the Governor.
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July 16, 2010
Puerto Rico statehood could help Republicans
By George F. Will
WASHINGTON — A Republican governor — a very Republican governor — has an idea for solving one of his party’s conundrums. The party should listen to Luis Fortuno, the Reaganite who resides in Puerto Rico’s executive mansion. (more…)
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July 14, 2010
WTimes Op-ed by former Gov. Keating
The Washington Times
KEATING: Are Hispanics lost to Republicans?
By Frank Keating
ANALYSIS/OPINION:
The lights went out on the Republican renaissance when the Arizona Legislature criminalized the presence of illegal immigrants in their state. Or, at least that is popular wisdom.
Hispanics constitute the fastest-growing segment of the population. They are rooting in cities and towns across America, transforming the religious and cultural landscape. Homogenized by the reach of Univision and Telemundo Spanish-language TV networks, Hispanics have mobilized to become a visible and frequently noisy player in the nation’s rallies, street protests and political debate. Their leadership is largely Democratic.
The anti-profiling and civil-justice debates are rich fare for Democratic operatives. The plucked Republican chicken soon will be in every Democratic pot, and the sun is setting for Republican governance as future generations of Hispanics will reliably vote Democrat, the story goes. Democratic dominance is assured as a combination of Hispanic solidarity and black solidity will make Republican officeholders as rare as roses in winter.
But before our friends on the left break out their vuvuzelas, they need to take a look at Puerto Rico.
(more…)
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June 29, 2010
NYTimes: Puerto Rico Extends Deadline for Birth Certificates
http://cityroom.blogs.nytimes.com/2010/06/29/puerto-rico-extends-deadline-for-birth-certificates/
By ISOLDE RAFTERY
Puerto Ricans facing the imminent mass invalidation of their birth certificates have received a reprieve from the Puerto Rican government.
People born on the island – including the nearly 1.4 million Puerto Ricans living on the United States mainland, about 300,000 of them in New York –- now have until Sept. 30 to continue to use their old birth certificates.
Last December, in an effort to curb passport fraud, the Puerto Rican legislature created a new, more secure birth certificate that would be available as of July 1. The initial plan was to invalidate all previously issued birth certificates as of the same date. But over the weekend, the government finalized a measure that keeps the old birth certificates valid until Sept. 30, while also making the new certificates available as of Thursday.
“We planned we would give a short period of overlap that we would not announce until the very end,” Kenneth D. McClintock, secretary of state of Puerto Rico, said Monday. “If you announce it early enough, the bureaucracy takes it easy.”
For decades, it was common practice for Puerto Ricans to order a dozen copies of their birth certificates and hand them out to just about anyone – the ballet instructor, the elementary school secretary, the prospective employer.
It seemed a benign practice, one borne of habit more than necessity. But in time, it resulted in rampant fraud.
School break-ins increased as thieves broke into schools to rifle through cabinets for birth certificates, which were sold on the black market for $5,000 to $10,000.
In one study, the American authorities examined 8,000 passport fraud cases and found that 40 percent of them involved Puerto Rican birth certificates (Puerto Ricans are, of course, United States citizens). There were tens of millions of unsecured birth certificates, which Mr. McClintock said made Puerto Ricans vulnerable to identity theft.
“You had many people waiting until they turned 65 to request full benefits,” he said. “They would go to the Social Security office and found that someone else had been getting partial benefits in their name since they were 62. That was creating major problems.”
Though many Puerto Ricans agreed with the effort to reduce fraud, some questioned whether the government was prepared to field so many requests for new birth certificates. Angelo Falcon, president and co-founder of the National Institute for Latino Policy, challenged officials on this point.
“Many of us are wondering, if over five million people have been born in Puerto Rico, how are they going to handle the requests for these birth certificates?” Mr. Falcon said.
And with so many official documents produced with the help of stolen birth certificates, Mr. Falcon said he wondered whether fraud would be cut back.
“They’re asking for copies of a driver’s license,” Mr. Falcon said. “You could still falsify the information.”
Mr. McClintock said that that was a concern, but that the renewal of birth certificates was expected to significantly reduce fraud.
Mr. Falcon, who was born in Puerto Rico and moved to the mainland as an infant, said he was waiting to apply for a new birth certificate because he would not be traveling this summer.
Mr. McClintock urged others to do likewise. Unless Puerto Ricans are getting married this summer or applying for a first-time driver’s license or passport, he said there was no need to request a new birth certificate right away. Though the government hired 47 summer employees to respond to the birth certificate requests, he hoped to reduce the backlog by asking people to wait.
There are three ways to acquire a new birth certificate – mail-in, walk-in or through PR.gov, Puerto Rico’s government Web site. Through the site, applicants must submit a scan of a government-issued picture identification, like a driver’s license, passport or military identification. Each new certificate costs $5, unless the person is a veteran or 60 or older.
On the streets of Spanish Harlem last Thursday, several older Puerto Ricans said they had planned trips to their home island to order a new birth certificate in person. There, they could apply at one of the island’s 78 municipalities and receive a birth certificate within a day.
Other Puerto Rico-born New Yorkers hadn’t heard about the law, or had heard but didn’t realize the deadline fast approached.
Elizabeth Vega, a housekeeper who lives in the Bronx, said she was vague on the details. A friend tried to order a new birth certificate online for her, but she wasn’t certain if that worked.
“I care because I need a new one, and it’s important to have papers,” Ms. Vega said. “But I don’t know too much.”
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June 28, 2010
AP: Puerto Ricans targeted in massive ID theft schemes
By DANICA COTO (AP) –
SAN JUAN, Puerto Rico — Born in a U.S. territory where he has lived all his life, Jose Marrero Rivera didn’t know his name and social security number were racking up thousands of dollars in unpaid charges in Chicago and Miami.
The snack bar worker is one of thousands of Puerto Ricans caught up in a lucrative document-fraud scheme to hide illegal immigrants in the United States. They’re American citizens with Hispanic surnames. And their records — kept loosely in schools or church rectories, where they are easy to steal — draw as much as $6,000 on the black market.
Only when police showed up at Marrero’s San Juan airport food stand to arrest him for car theft did he realize that identity thieves were upending his life.
“All the information, all of it, the driver’s license, the Social Security, my address, was mine,” he said of the warrant. “I was shocked. I told them simply that it wasn’t me.”
Documents stolen from Puerto Rico have shown up in fraud-ring busts in Delaware and Ohio and immigration raids on meatpacking plants from Texas to Florida. No government or law enforcement official can put a dollar amount on the illegal trade, but documents are so valuable that addicts on the island trade their own documents for drugs.
“Birth certificates have become legal tender,” said Kenneth McClintock, Puerto Rico’s secretary of state.
The island government’s only answer so far is to void every Puerto Rican birth certificate as of July 1 and require about 5 million people — including 1.4 million on the U.S. mainland — to reapply for new ones with security features. New birth certificates will be issued starting July 1, and all old birth certificates will be annulled by Sept. 30.
But no one can guarantee the mass inconvenience will solve the problem. Untold numbers of passports, driver’s licenses and other documents issued to holders of false birth certificates are still valid.
The law only aims to make it harder to get false documents in the future, but does nothing to target those already in circulation. And a person holding a stolen birth certificate could conceivably apply to receive one of the new ones, which will have special seals and be printed on counterfeit-proof paper — though they would have to present other personal data that they might not have, McClintock said.
“We had to take drastic measures,” he said. “The new law does not pretend to solve all the problems. What it aims to do is resolve the massive theft problem.”
The problem stems from the Puerto Rican tradition of requiring birth certificates to enroll in schools or join churches, sports team or other groups, which keep them in unsecured offices or drawers. The new law voiding all birth certificates prohibits such groups from keeping copies.
“I think people noticed that no one was paying attention to those documents,” said a Puerto Rico-based FBI agent on the cases, who requested anonymity because the agent works under cover. “In the future, this could be linked to everything, even terrorism. I don’t doubt that it could go that way.”
But the bulk of the business now is selling to people who are living and working illegally in the U.S.
The most valued package comes with a birth certificate, a Social Security card and a driver’s license — called a “tripleta” after Puerto Rico’s renowned street sandwich stuffed with three types of meat, said Roberto Escobar of the U.S. Immigration and Customs Enforcement office in Puerto Rico.
“They can custom order: ‘I need two children and five adults,’” the FBI agent added.
Identity-theft rings have been busted in Puerto Rico and several states, with one accused of stealing the data of 7,000 public school children after breaking into more than 50 island schools over two years. In another case, an employee with the Puerto Rican Department of Motor Vehicles is accused of stealing 1,200 driver’s-license renewal forms.
The new law comes at a time when Latinos are being increasingly scrutinized for their immigration status and deported in large numbers. It’s causing problems for some Puerto Ricans who say their birth certificates already have been rejected when they applied for driver’s licenses. Others have been required to answer questions about Puerto Rico to prove their citizenship, said Cesar Perales, president of LatinoJustice PRLDEF, a civil rights group.
Some don’t know the answers because they have lived on the mainland so long.
“There’s now this cloud over Puerto Rican birth certificates,” Perales said. “The timing, it seems to me, could not have been worse.”
Under another law that takes effect in 2014, Puerto Ricans will have to obtain new driver’s licenses with higher security features. Currently, the island has five different types of driver’s licenses, which are sold for $100 to $150, said Puerto Rican police detective Jose Bejaran Mercado.
Carlos Morales, who lives with his family in Orlando, Fla., is among those who must reapply for a birth certificate.
Two years ago, someone filed a tax return using his Social Security number. Morales, who had been married for nearly 30 years, tried to explain why another woman claiming to be his wife filed the return.
“My wife even thought (I had) somebody else: ‘Who is this woman trying to get five grand?’” he recalled her asking.
Marrero, the airport food worker, avoided arrest for car theft because he didn’t match the police photo of the suspect. He reported a case of identity theft in 2004 after he applied for a loan to buy furniture and got turned down. But nothing happened in the six years since then — except that more people started using his information.
Besides stealing cars, people using his identity defaulted on loans in Miami and fell behind on credit-card payments in Chicago.
The 32-year-old married father of two called police a year after filing his identity-fraud complaint to ask about progress. He said local authorities were dismissive.
“They told me, ‘There are cases more important than that little case,’” he said.
Meanwhile, his credit has been ruined.
“They won’t even lend me money for an ice cream cone,” he said. “There’s a criminal who knows everything about my life, and I know nothing about his.”
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