Lawyer Laura Acosta is bearish on the Punta Catalina Trust

In her analysis of the Punta Catalina Trust for the La Cuestión radio talk show on Super7FM, lawyer Laura Acosta makes the point there are major ambiguities in the contract and recommends the Senate not pass it as it has been drafted.

She explains that there is no specific law or ruling regarding public trusts in the Dominican Republic, leaving several key clauses open to interpretation. There is only the Trust Law 189-11 that was created for private real estate entities.

She raises a red flag that the Punta Catalina Trust contract creates a controlling technical committee with private persons named in control when the entity is a public trust. The government in creating the trust has insisted it is created to remove politics from the decisions at the country’s largest power plant. The President of the Republic, nevertheless, is who names the members of the committee by decree, thus giving the controlling entity a political character. President Luis Abinader has already named private persons to these positions. The naming of private persons frees the actions of these from the government controls to which government officials are subject to.

President Luis Abinader seeks to be reelected in 2024.

The contract also authorizes the Technical Committee to name the alternates of the members of the Technical Committee. According to the contract, these can fill in for any of the members at any time. The alternates have the same rights and obligations as the members named by presidential decree.

Acosta says that despite Energy & Mines Minister Antonio Almonte has said that the contracting would be subject to the Procurement Agency, the contract does not specify its procurement needs to comply with the Procurement Agency rules. Instead, the Punta Catalina Trust contract instead calls for the drafting of its own procurement ruling.

She says once the Senate passes the Punta Catalina Trust contract this will be law. She says when there are ambiguities, what the contract says will apply. She highlights that the Punta Catalina Trust does not establish if it can be controlled by the Chamber of Accounts or the Controllers Office. By not including this clause, she remarks it is unlikely to be subject to these controls.

The Technical Committee holds all the controls. She says the Technical Committee establishes the procurement ruling, the management and the executive director. The Technical Committee designates its own external auditors.

She says the Technical Committee is authorized to borrow and these loans will not be accounted as public debt because the Punta Catalina Trust contract removes its assets from the realm of the state to that of the trust as governed by the contract.

In his arguments as to why the rush for the creating of the Punta Catalina Trust, Energy & Mines Minister Antonio Almonte has argued that the Public Electricity Corporation (CDEEE) needs to be liquidated. Acosta argues that she does not understand this and wonders why not take the time to present the proposal after the audit of the entity ordered by the Ministry of Energy and Mines is received. She says the contract even establishes that the reference values to be included need to await the audit.

She mentions the ambiguities regarding the figure of the adhering trustee that is created by contract. She says the contract does not establish the benefits the adhering trustee will receive for the investments to be made. The conditions are not clear, she says, and says this would need to be submitted to Congress in the form of an addendum to the contract. She says the past experiences are that it could covertly pass in Congress as has happened in the past.

Patricia Solano of La Cuestion also pointed out how Congress in a past administration approved the sale of the Duquesa dump lands to a private firm in a contract that has was held on a date when there was no session. This was not contested by the new legislators in this Congress.

In her recommendations, Acosta calls that the bill not be fast-tracked as occurred in the Chamber of Deputies and instead be subject to public hearings. She also calls for clearing up the ambiguities, stressing those of the external and internal controls and whether the trust is subject to the Procurement Agency, Controller Office and Chamber of Accounts control. She says the alternates of the Technical Committee need to be named beforehand, not by the technical committee members.

She favors the naming of government persons because these officers are binded to present wealth statements and are subject to government controls that are guarantees of the better management of the public asset.

She concludes if she was a senator she would not vote in favor of the Punta Catalina Trust that was fast-tracked in the Chamber of Deputies because of its lack of clarity.

Laura Acosta was a key participant for the state in the Punta Aguilas corruption case that ended with the return to the Dominican state the beach lands in Pedernales that had been irregularly privatized. The case had been championed by her late mother, lawyer Piky Lora.

Follow the story in Spanish:
La Cuestion 19 January 2022
La Cuestion 18 January 2022
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20 January 2022