Congress Has a List, but That Isn’t in the Constitution

The 2016 law creating an oversight board for Puerto Rico blatantly violates the Appointments Clause.

 
 
Puerto Rico’s capitol building.
Puerto Rico’s capitol building. PHOTO: GETTY IMAGES/ISTOCKPHOTO
 

The framers of the U.S. Constitution regarded the carefully wrought system of separated powers as essential to securing liberty, freedom and stability. In Federalist No. 48, James Madison warned that the legislature would try to be the most powerful branch, “everywhere extending the sphere of its activity, and drawing all power into its impetuous vortex.” Congress, Madison foresaw, would “mask, under complicated and indirect measures, the encroachments which it makes on the coordinate departments.”

One of the most important responsibilities the Constitution assigns the president is the power to nominate the people who execute our nation’s laws. This subject was debated extensively at the 1787 Constitutional Convention. One group, led by Benjamin Franklin, sought to vest the appointment power in the Senate, fearing that lodging that power in the executive would lead to monarchy. The other faction, led by Madison and Alexander Hamilton, believed the executive was better suited to the task, because “collective appointments were usually marked by intrigues, deals, and machinations.”

The Constitution’s Appointments Clause was a compromise. The president has the power of appointment, constrained by the Senate’s power to advise and consent. 

But true to Madison’s prediction, lawmakers have repeatedly enacted measures that encroach on the president’s constitutional prerogatives, including the appointment process. Just last year, they did it again in a statute known as Promesa—the Puerto Rico Oversight, Management and Economic Stability Act.

Promesa establishes the seven-member Financial Oversight and Management Board for Puerto Rico to address the commonwealth’s fiscal challenges. The act gives the president authority to choose only one of the board’s members. It directs him to select the remaining six members from lists supplied separately by the House speaker, the Senate majority leader and both chambers’ minority leaders. Those lists have never been made public.

The statute provides that if the president picks his nominees from the lists, no Senate confirmation is required. The president theoretically could select others, but they would be subject to Senate confirmation, which had to be obtained within two months of the statute’s enactment—during which time the Senate was in session for only eight days. President Obama acquiesced in this legislative squeeze-play and selected six of the board’s members from the congressional leaders’ lists. None of the members were confirmed by the Senate or publicly vetted in any way.

The constitutional problems with this method of choosing the Oversight Board’s members were no secret to Congress. Sen. Maria Cantwell of Washington warned during the debate that the bill violated the Appointments Clause. Congress attempted to paper over the problem by inserting a definitional provision stating that the board is part of the territorial government of Puerto Rico, not the federal government.

But what matters under the Appointments Clause is the source of an entity’s authority, not the label Congress puts on it. The board is federal in every relevant respect. It was created by federal law, and its members are appointed by federal officials to carry out federal law. The board functions as a federal super-governor for Puerto Rico: It alone has the power to initiate, and then manage on behalf of Puerto Rico in a federal court, what is likely to be the largest bankruptcy proceeding in American history.

People who exercise important congressionally granted authority are unquestionably principal officers of the United States. Thus, under the Constitution, they had to be appointed by the president with the consent of the Senate. In fact, since the Constitution was ratified, every federally appointed territorial governor—including in Puerto Rico, which began electing governors only in 1948—has been nominated by the president and confirmed by the Senate.

None of the board’s members were appointed that way. Instead, it consists of one person chosen by the president and six secretly handpicked by individual members of Congress, and the Senate abdicated its duty to confirm all seven of them—in blatant violation of the Constitution. The board’s members wield massive federal authority and are accountable to no one—a recipe for corruption. If Congress can get away with this latest circumvention, you may be sure that it will do the same thing again and again, “drawing all power into its impetuous vortex.”

It will be up to the courts to stop it.

Mr. Olson, a lawyer with Gibson, Dunn & Crutcher, represents fund entities managed by Aurelius Capital Management LP in a challenge to the constitutionality of the Puerto Rico Oversight Board.

Appeared in the August 10, 2017, print edition.

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