Chapter 2

[The following text was NOT produced by LA CHULETA CONGELÁ’]

Pay to the Order of Puerto Rico

By Alexander Odishelidze and Arthur Laffer

(Complete work below in “Must Axxess Files” box.)

CHAPTER 2: The Last Colony

The asterisk next to the name of Roger Maris may be the most famous punctuation mark in modern history. Until recent times, when the great Yankee slugger’s name was superseded by those of McGwire, Sosa, and, finally, Bonds, the renowned asterisk in the baseball record book informed the reader to look more deeply. At the bottom of the page the reader would find the truth that Maris had hit his 61 home runs in a season that was eight games longer than the one that produced the Babe’s legendary 60. Used this way, the asterisk meant, “More explanation needed.”

In the year 2003, the name of the island territory nearly 1,000 miles to the southeast of the United States should always be written Puerto Rico*. Here, in this chain of islands spreading like a necklace of seashells from the Yucatan Channel to the tip of Venezuela, Puerto Rico is the ultimate anomaly, a place where things cannot be understood at a first, a second, or even a third glance. The economy, the form of democracy, the position in the Hemisphere. The past, the present, the future. Mark them all with an asterisk. More explanation is needed.

At the end of the warm, wet summer of 2003, the Robert Clemente Arena in San Juan, Puerto Rico, was filled to the rafters. Mark it with an asterisk. It was a merely a basketball game between two teams of American citizens. One was composed entirely of professionals representing the mainland United States. The opposition was composed of both professionals and amateurs, representing an unincorporated territory of the United States only 3,515 square miles in size, no bigger than the Los Angeles basin. But it was the mainland players who were looking for payback. More explanation needed.

The USA Team of NBA All-Stars in San Juan that late summer day was well aware that Puerto Rico had just weeks earlier scored an upset victory in the Pan Am games over a squad of U.S. college all stars. It was an earth-shaking event in San Juan, a kind of hardcourt Alamo, and the hostility of the San Juan crowd to a team of their fellow citizens from the mainland had been intense, according to the losing coach from recent NCAA champion Michigan State. Surely, the American pros would not repeat the disaster of the Pan Am games, or the shock of 2000, when they lost the Olympic gold to an upstart team from Yugoslavia.

Late in the first half, the spark that almost lit a bonfire occurred. Tracy McGrady of the U.S. team made a steal and knocked down Eddie Casiano, one of the Puerto Rican stars. McGrady scored. Casiano wanted the foul but none was called. When McGrady approached him as the buzzer sounded, hot words were exchanged. Both teams rushed the floor, the partisan crowd jeered, and a brawl nearly ensued. As the crowd pelted the floor with plastic cups and other objects, the teams finally retreated to their locker rooms. Sure, it was just basketball. Mark it with an asterisk.

That asterisk may mask a larger one. Why, indeed, if mainlanders are Americans and Puerto Ricans are Americans, are there two teams vying with each other for a place in the Olympic Games? Alaska does not field its own biathlon team. Colorado does not have its own slalom competitors. New York City does not seek a basketball gold, though it might have a good chance of winning one if the rules allowed. But Puerto Rico has an Olympic team, and that Olympic team has a basketball squad. And if, on a broiling Sunday afternoon, that squad could beat one featuring names like McGrady, Allen, Iverson, Duncan, and Carter, it would be as if the U.S. hockey team had skated out of the past and defeated the Russians all over again at Lake Placid.

Or would it? The truth is that, despite the peculiarities of the strangest relationship in the lexicon of American foreign/domestic policy, Puerto Rico* is very much a part of, and very much in love with, the rest of America. You only hurt the one you love, the saying goes, or, to put it a happier way, you only care about the hurts of the ones you love.

The story of Puerto Rico’s unique and evolving relationship with the United States has all the elements of comedy and tragedy, of competition and cooperation. Chest-thumping on the basketball court or on a military firing range is about as contentious as it has gotten in a long while, even though previous eras of confrontation have seen gunfire outside Blair House, inside the House of Representatives in Washington, and outside the Governor’s mansion, with lives lost, in Puerto Rico. All in all, the story of the dance between Puerto Rico and the mainland, more than a century long since the change of partners in 1898, has produced both exhilaration and exhaustion.

Today that relationship teeters more on the edge of exhaustion. Its very temperate nature, secured at the cost of billions in American taxpayer subsidies and Puerto Rican dependence, conceals the profound injustice that lies at its heart. A Latin people is very capable of tormenting an oppressor, or of following one. Like other peoples, it can produce a Simon Bolivar or a Trujillo, a Muñoz Marin or a Noriega. Perhaps the greatest injustice of all is that, given the passage of time in which Puerto Rico has been an American possession, the reaction of most of the island’s people to their unequal yoke has been tempered and accepting. Somehow, in a world of violent revolution, where violence has been spurred by both just and unjust demands, Puerto Rico’s lack of combustion should help to bring it the reward of a full measure of freedom. Today, in the fall of 2003, it is nowhere near that measure.

Instead, Puerto Rico has entered a state of economic and political hibernation called commonwealth. Ambiguous at its core, this status has increasingly allowed the island to claim the hallmarks of self-rule while barring it, under the U.S. Constitution, from the exercise of the sovereignty routinely available either to states in the American Union or to free nations. Every day the Congress of the United States is in session, its elected representatives can vote on and adopt laws over which the Puerto Rican people have no say. The House of Representatives can initiate a spending bill that includes the island to any degree or to no degree. The Senate of the United States can debate and ratify treaties to which Puerto Rico thereby becomes a party, with no vote or even presence of any person representing the perspective of the island on the issues at stake. That is the way it has been since 1898. No other U.S. territory, certainly no other cluster of 3.89 million Americans, is treated this way.

No one will ever know how truly expensive Puerto Rico’s status is to itself and to the taxpayers across the 50 states who daily underwrite this experiment in disordered liberty. In the pages that follow, drawing from numerous sources, we attempt to calculate much of that expense, but it is all but impossible to summarize the diminution of human potential in dollar signs. The total cost was well past the $200 billion dollar mark over the past 20 years. The pace shows little sign of slackening. Even more important, the longer Puerto Rico’s stultified status exists, the more the worst elements in both the Puerto Rican and mainland character come to the fore. If no long-term solution is at hand to a pressing problem, people logically reach for short-term advantage, or, worse still, cling to the narrowest prejudices.

Is racism a part of Puerto Rico’s unusual story? Some evidence to the contrary exists. Alaska and Hawaii are the most two recent territories to join the Union. Both have now and had then native populations – Aleuts, Eskimos, and the Hawaiian people – who did not follow “American” ways and who spoke foreign languages. Yet these splendid places became the 49th and 50th states, and their representatives in Congress have included people of Western European as well as Polynesian and Japanese-American descent. Surely, the melting pot society that the United States has become is above every obtuse feeling? A nagging sense of doubt endures, however. Would Puerto Rico still be a territory and not a state or nation of its own if its people were half German and half Irish?

Ah, it’s not the nationality, many say, it’s the language. They speak Spanish there and want to preserve their culture.

But Spanish is also spoken in the United States, in Spanish Harlem and in the barrios of Los Angeles. In pockets of Wisconsin, German is the lingua franca, and in other parts of New York, Russian and other languages predominate. The local grocer speaks Arabic to his cashier and the Chinese restaurateur rarely speaks anything but Chinese to his employees. They work hard and stick together for many purposes. The nation does not fall apart. Can it really be just language? Sometimes it is a champion of civil rights, a President Bill Clinton, or a senator less famed for his broadmindedness, a Trent Lott, who indirectly, even faintly, says or does something that suggests that a kind of prejudice, subtly racial, is at work in the hypocritical decisions that are made about the nature of Puerto Rico.

In his book about the Clinton presidency titled The Agenda, reporter Bob Woodward talks about a major debate in Congress over the repeal of special tax preferences for U.S. corporations that set up shop in Puerto Rico. The Clinton Administration had proposed a repeal of the preferences, based on its well-justified conclusion that they were benefiting certain well-heeled U.S. manufacturers and doing very little to boost employment and income for Puerto Ricans. The late Pat Moynihan, then-senator from New York, went to see Bill Clinton at the White House to complain about the President’s economic plan. As chairman of the Senate Finance Committee, Moynihan felt he had not been sufficiently consulted. Moynihan, Woodward writes, focused on a part of the plan he insisted would have to be dropped, the President’s proposal for Puerto Rico.

According to Woodward, Moynihan conceded to Clinton what every serious economist who had looked at these preferences had concluded: they were “indefensible.” He then proceeded to defend them. Yes, one company had gotten tax breaks that amounted to about $500,000 per worker. The price tag for another’s taxpayer giveaway was $150,000 per worker. Still, Moynihan “painted a doomsday scenario” for Clinton of what would happen if the preferences were repealed. The U.S. firms on the island would flee their tax haven and the unemployment rate on the island would double to 30 percent. A political crisis would follow. A plebiscite on the island’s status – whether to remain a territory or seek admission to the Union or the path of independence – was imminent, and the panicked Puerto Ricans would approve statehood. Congress would reject it. It “would be a political nightmare. How would the United

States look to the world?”

None of these points could be made publicly (put an asterisk beside them). They were to be the private reasons for public actions. There was another point it would be indelicate to raise publicly, Moynihan noted. If the tax breaks went away, there would be “revolution in the Caribbean.” Why, the loss of the preferences could even “vastly increase immigration to New York” from the island and, in Woodward’s summation of Moynihan’s message, “the increased welfare and other social service costs would outstrip the savings achieved from abolishing the tax [preferences].” Three liberal members of Congress, all of Puerto Rican heritage, one Chicagoan and two New Yorkers, agreed with Moynihan’s analysis. They did not come away from the White House empty-handed. Watered-down but still generous, the tax breaks were preserved.

Thus, for several more years, faulty public policy survived that helped, and in new forms still helps, to keep Puerto Rico shackled to something less than liberty. Had conservatives gone to a president of their party and made these arguments, warning that special tax breaks for big U.S. companies were needed to keep Puerto Ricans away from our shores, the cries of bigotry would be deafening, as would the complaints of corporate welfare and tax cuts for the rich. For decades, Puerto Ricans in New York City, Chicago and elsewhere across the country had voted reliably for the Democrats. Now here was their reward: to have their own presence, and the prospect that this presence might increase, used as an argument in favor of an “indefensible” tax gimmick that lined the pockets of the rich. Did it make sense for liberal Democrats to act this way about a reliable constituency? Is it “immigration” when American citizens move from one U.S. jurisdiction to another? Only if the place one is dealing with is Puerto Rico*.

In the fall of 2003, the United States of America is embarked on a project designed to bring democratic institutions and a functional constitution to Iraq. It is far too early to tell how that experiment will play out, but it is ironic indeed that our leaders believe they can bring the blessings of self-government to a nation that has no heritage of liberty. For 105 years now, we have been unable to bring about a permanent form of self-government in a place far closer to us, far more admiring of our way of life, a place that has such a heritage and surely has such a yearning.

The longer commonwealth lingers, the more difficult a permanent solution may be. The longer any person falls behind and fails to realize its dreams, the more fractious their politics becomes, and the less attractive their polity becomes to their fellow citizens. Substantive issues become symbolic and symbolic issues become substantive. A gubernatorial candidate who favors statehood can earn attention for a fracas involving proper display of the American flag. At a celebration in 2000 for the new Puerto Rican middleweight boxing champion, fans can force the organizers to remove the U.S. flags from the stage. A sitting governor can decamp to a hotel room in the Dominican Republic as she futilely awaits admission as an equal to a meeting of Latin American heads of state. The U.S. Navy can be tossed off a firing range it has used for decades to teach soldiers how to conduct themselves in battle. A heroin addict can see the sum total of his universe in the cost of a vial.

That last epiphany was reported in an article in National Geographic published in March 2003. The addict, Luis by name, complained to the writer about the high price of his fix relative to the cost of street drugs in New York. It was, he intoned, “another example of the unfair trade relations between Puerto Rico and the U.S.” Here, the words of the prophets echo off the walls of El Morro, the 17th century fort in Old San Juan where the shooting galleries hum in a zone the overmatched police seldom enter. What emotion resonates in the addict’s bitter words? Resentment? Envy? A cruel joke? The dependency on drugs is perhaps the worst of all, but the dependency of 60 percent of a population eligible for welfare assistance is ultimately more debilitating.

Puerto Rico has had less than full freedom within the American system for more than a century. Indeed, in that period, the Congress of the United States has not once passed legislation that would permit Puerto Rico to stage a clear, and consequential, vote on acceptable options for a permanent status. In fits and starts, the political parties on the island, shift their positions and their names, devising statuses of various definitions and seeking clarifications from Washington. They stage votes and some parties boycott them. They ponder the establishment of committees and assemblies, task forces and study groups, argue with one another, argue with the wind, looking for formulas that will satisfy the factions’ desires and command the attention of Washington. It is the contradiction of Santayana’s maxim: Puerto Ricans remember the past, and still they seem doomed to relive it.

Puerto Ricans are not exactly what an observer sees at first glance. More explanation is needed. The people of the island are part-Spaniard, part African American, and part Taino Indian. There is the blood of Corsicans and Irish in their midst, white Catholic settlers invited in at various periods. A handful were pirates, not invited in. Many were smugglers, self-taught in a craft born of dire necessity as first Spain and then the United States sought to limit what Puerto Ricans could buy and sell overseas, most of it legal goods, some of it contraband. Everything is not what it seems. Mark it with an asterisk.

Freedom House, in its annual report assessing the level of liberty enjoyed by various peoples, labels Puerto Rico “free.” Relative to billions of other people around the world, this characterization is fair, the heated rhetoric of the island’sindependentistas to the contrary. Puerto Ricans hold effective elections for every local office. When they march in the streets, as 150,000 people did in February 2000 to protest the Navy exercises at Vieques, Washington, though reluctantly in many quarters, listens. Crowds of this size do not determine policies in China regarding the location of factories, much less military bases. In fact, crowds of this size do not form in China at all, unless it is to watch an official parade. No, Puerto Rico is assessed accurately as “free”: it is as part of one of the freest countries on earth that its dearth of key liberties is incongruous.

Living in the shadow land between colonization and self-determination makes a people feel its way forward tentatively. A son complains of the “debilitating deference” many Puerto Ricans pay to the mainland United States, thinking that the island’s association with the giant to the north has brought it prosperity. A father, a four-year veteran of the U.S. Navy, replies to his son, “If Puerto Rico ever became independent, I’d move to the U.S. This place would be bust in a minute – no more Social Security, no more checks every month.” A generation gap does exist, with more older Puerto Ricans valuing their long-standing ties with the United States and the cash income they have earned in its service, and more young Puerto Ricans, who have seen only the economic stagnation detailed in the pages that follow, willing to try something new.

In the fall of 2003, the mind of Washington is not focused on the populous island that bridges the Greater and Lesser Antilles. Looking toward its own wounds, from terrorism and several years of a cool economy, the American people and the Congress are paying little attention to the restiveness brewing in Puerto Rico. One in 70 of their fellow citizens lives there, but for most of us it might as well be one in 7,000. The average net transfer of taxpayer funds to each of those citizens now runs some $1,500, but the cost of rebuilding Iraq, $100 billion or more, is in the headlines. Per capita income in Puerto Rico is a national scandal, roughly $9,000, less than half that of Mississippi, the poorest state, but Americans are focused more on the 2.7 million jobs lost nationwide since the economy soured in 2000.

The lull in Washington is deceptive, however. The United States is a superpower and there is more to the world than Iraq. Changes are coming, swift and certain, across the whole terrain of national affairs. Domestically, the United States is “Hispanicizing,” and African Americans have given up their place in the demographic pecking order as the nation’s largest minority. California is the perennial political bellwether state, the home of future trends that usually overtake the rest of the country, Florida is the state that decided the last presidential election, and Texas is home to the nation’s president. All of these states are seeing an influx of Hispanic Americans. Many of them cannot legally vote. Puerto Ricans can, and they are making their way in dramatic numbers to areas like Orlando, where the daily newspaper, The Orlando Sentinel, does some of the most thorough reporting in the states about Puerto Rico’s condition.

In 2005, little more than a year away as this is written, the Section 936 tax that substituted so long for a development policy for Puerto Rico will sink at last into the sands of time. A new governor, likely the former two-term governor, Pedro Rossello, or the current pro-commonwealth Resident Commissioner, Anibal Acevedo Vila, will take office. The promises made by the Bush Administration in education and for Medicare, plus whatever promises are added on to these by the dynamics of the 2004 election season, will come due, and new taxpayer funds will begin to circulate, like some hurricane in reverse, from the mainland to the island. All the while, closer to home, an Hispanic nation that has always fascinated Americans, a long-captive nation whose capital is just 90 miles from our shores, may undergo a wrenching and epoch-making change.

One might soon be tempted to put an asterisk by the name Cuba as well. That “other island” has had a very predictable history for many decades, but the near future may bring it, too, into the realm of the not easily explained. If we are fortunate, our leaders will look beyond the policies and prejudices of the past and begin to perceive that a whole new era is about to begin in the Caribbean. How our president and our Congress handle that era may have more impact on the future of the entire Western Hemisphere, and much of the developing world, than any other factor on the scene today, save the threat of terrorism. The Caribbean has never had any success in avoiding the ancient Chinese curse of being compelled to live in interesting times.

Fifty years ago next June a band of Puerto Rican nationalists stood in the Visitors Gallery of the U.S. House of Representatives and fired shots, wounding five members of Congress. Five years ago, the real character of the Puerto Rican, our fellow Americans, was on display in the actions of one man in that same chamber. He was 100 years old, a veteran of the First World War, the war that induced Congress to make Puerto Ricans citizens of the United States. He had come to the House gallery to witness the first-ever extended debate and vote on legislation by which Congress would define the options it would accept for Puerto Rico’s future. He witnessed a debate that was at once vigorous and principled, gnarled with petty politics and patent prejudices, ragged and messy, but democratic at its heart – the epitome of self-rule, the object of every civilized populace.

When at last, that debate was over and the amendments were all accepted or rejected, the House voted. By a margin of a single vote, the decision of one person in the chamber, the House approved a bill to set a date for Puerto Rico’s rendezvous with self-determination. The centenarian had come, he said, “to see the values I fought for redeemed by Congress before I die.” As one observer wrote, this gentleman was “just one of many with tears in their eyes that night after the deliberations ended with a nerve-crunching vote of 209 for the bill, and 208 against.” That bill died soon after in the United States Senate. The fate of that aged veteran is unknown to us. This we do know. Congress still has an act of redemption to perform.



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