Trump Ally Loomer Brings Puerto Rico's Bankruptcy to Far-Right Stage

The Rise of Laura Loomer and the Political Tensions in Puerto Rico

Laura Loomer has become a prominent figure on social media, particularly on X (formerly Twitter), where she has amassed over 1.7 million followers. Known for her far-right views, she has targeted high-profile individuals such as Tucker Carlson and the head of the White House records’ office. Her influence has grown significantly, especially with the support of former President Donald Trump.

Loomer's focus shifted to Puerto Rico, where she criticized the territory’s efforts to manage its massive debt. Over the past eight years, Puerto Rico has struggled with a crippling financial burden, leading to costly legal proceedings that have cost approximately $2 billion. In response to her criticism, the Trump administration removed five out of seven members from the board overseeing Puerto Rico’s finances.

While it is unclear if Loomer directly influenced this decision, her public attacks on the board have brought attention to the complex issue of municipal debt restructuring. She specifically targeted David Brownstein, a long-time muni fixer and former Citigroup banker, as well as lawyers involved in the process.

Her rhetoric and the board overhaul have complicated efforts to resolve $10 billion in debt owed by Puerto Rico’s struggling power utility, which is caught in a battle between hedge funds, muni mutual funds, and the commonwealth. Loomer has described the bankruptcy process as “piracy” and called for it to be illegal. She has also accused officials of siphoning billions from Puerto Rico’s residents.

Despite her strong stance, Loomer did not respond to requests for comment. Emails obtained by HAWXTECH indicated that the board’s salaries and decisions were cited as reasons for the terminations, which occurred just a day before one of Loomer’s latest attacks on the board.

The firings have sparked outrage among Democratic lawmakers, who are concerned about the potential impact on bondholders and the future of Puerto Rico’s financial stability. Congresswoman Nydia Velazquez expressed serious concerns about the fiscal board but argued that Trump’s actions do not address the root issues. She emphasized that the move does not dismantle the board or change the law that created it, known as PROMESA, and instead creates an opportunity for more extreme appointees to favor bondholders over the needs of Puerto Rican citizens.

The oversight board, often referred to as “la Junta” in Spanish, has overseen the most expensive municipal bankruptcy in U.S. history, incurring roughly $2 billion in fees and expenses over nearly a decade. Despite the costs, the board has managed to save $72 billion in lower debt costs and reduce spending under the leadership of former chair David Skeel and his successor, Arthur Gonzalez.

The board has completed a dozen restructurings, cutting $63 billion of debt by almost 60% and eliminating more than $55 billion in principal and interest payments. However, the biggest challenge remains the restructuring of debt issued by the Puerto Rico Electric Power Authority (Prepa), which owes $10 billion.

GoldenTree Asset Management and an ad hoc group of bondholders and insurance firms want Prepa’s debt liability to be considered at $12 billion as part of its rate review, but they acknowledge the bankruptcy process may reduce that amount. No comments were received from representatives of GoldenTree or Prepa bondholders.

The Role of “La Junta”

The oversight board, known as “la Junta,” has been a target of criticism from many in Puerto Rico due to its unelected officials and sweeping powers. It can veto budgets and contracts, and local lawmakers are frustrated by its ability to shape policy by rejecting unfunded legislation.

In a U.S. territory where residents have limited voice in Congress, the board is seen as an affront to democratic principles. Governor Jenniffer Gonzalez recently stated that the board was imposed on the island due to its status as a colony.

Despite its unpopularity, some critics acknowledge that the board has served as a buffer against Wall Street creditors pushing for higher electricity rates to cover bondholder payments. Juan Jose Jimenez, spokesperson for No Mas Aumentos, noted that while the board is not viewed favorably, it has stood up against bondholders and vulture funds during the Prepa restructuring.

Jimenez fears that the Trump administration may fill the board with individuals who favor creditors, potentially leading to unsustainable energy bills for Puerto Rico’s 3.2 million residents.

July Hearing and Concerns About the Future

Loomer’s social media posts about Puerto Rico gained traction after a July subcommittee hearing in the U.S. House of Representatives featuring testimony from Robert F. Mujica, the oversight board’s executive director. Democrats, including New York’s Ritchie Torres, warned about a potential board overhaul that would favor investors.

Torres warned that the move could lead to a situation where Puerto Rico’s people are robbed to placate bondholders. He feared that a Trump-appointed board would finalize a deal favorable to GoldenTree but not to the residents of Puerto Rico.

Mujica, a former New York budget director, noted that the remaining investors are asking for amounts that are unaffordable for residents. He emphasized that Puerto Rico has some of the highest-priced and least reliable energy in the U.S., with frequent blackouts.

A board more favorable to investors could result in higher burdens on rate-payers. California Democrat Jared Huffman alleged that the firing of the board members clears the way for Puerto Rico to be locked into an unreliable grid, dirty energy infrastructure, soaring energy costs, and decades of pollution.

This ongoing conflict highlights the complex challenges facing Puerto Rico as it seeks to balance its financial obligations with the needs of its residents.