ONE OF THE same banks that drove the Puerto Rico Electric Power Authority, or PREPA, into the red will now be paid to help auction it off to the highest bidder.
Citigroup Global Markets Inc., or Citi, will be the main investment bank consultant in the restructuring and privatization of PREPA, the Washington-appointed Fiscal Control Board -- the body now overseeing Puerto Rico's finances -- announced recently. Puerto Rico Gov. Ricardo Rosselló first announced the move toward privatization last month.
Citi is responsible for having underwritten large chunks of the utility's $9 billion in debt, and at one point owned at least hundreds of millions of dollars in PREPA bonds directly, according to an analysis from the Action Center on Race and the Economy. Citi "has been profiting from helping push Puerto Rico over the edge for a long time," said Carrie Sloan, ACRE's research director.
"The capitalists will sell us the rope with which we will hang them," Lenin is famously reported to have quipped. But he never said it, which is just as well, since it's slightly off. The capitalists will sell you the rope with which you'll hang yourself -- and then buy it back at a discount when you're finished.