Arts

Protesters call for removal of MoMA trustee linked to Puerto Rican debt crisis

Hundreds of Puerto Ricans dressed in white participated on a silent procession carrying signs and banners through the streets of New York to focus the nation's attention on the island's struggles in the aftermath of Hurricane Maria Photo by Erik McGregor/LightRocket via Getty Images

The newly expanded Museum of Modern Art in New York has yet to officially reopen to the public—and already finds itself under siege. Dozens of protesters plan to crash its opening preview party on Friday 18 October, calling upon the museum to divest itself from private prisons by severing its ties with Bank of America and the investment management firm BlackRock, whose CEO Laurence Fink sits on the museums board. Fidelity Investments, which manages MoMAs pension fund, is also a large owner of private prison stocks.

And now, a coalition of grassroots organisations representing the Puerto Rican community is calling for the removal of MoMAs trustee Steven Tananbaum, who founded GoldenTree Asset Management, a hedge fund that owns at least $2.5bn of Puerto Ricos debt and has profited from the islands financial crisis.

“The demand is to take action and remove Tananbaum. As long as he is on [MoMAs] board, we will be at their door,” says Gina De Jesus, an organiser with New York Communities for Change who is organising a protest at the museum during the public opening on Monday 21 October. De Jesus expects several politicians to attend the march, including the former New York City Council speaker Melissa Mark-Viverito and the citys current Public Advocate Jumaane Williams.“People died after Hurricane Maria and [Tananbaum] didnt think twice about profiting from the disaster. If MoMA cares about the wellbeing of other humans more than money, it must take action.”

When Hurricane Maria ripped through Puerto Rico with devastating force on 20 September 2017, the Commonwealths bond prices were already plummeting. Investment firms known as “vulture funds”, which specialise in high-risk "troubled assets" that are near default, and therefore at a discount, took notice and went on a buying spree, quadrupling their collective holdings from $254m to $1.1bn. One of the most aggressive companies involved in the rush was GoldenTree Asset Management, which in 2019 ranks in the top three holders of the islands debt, with more than $2.5bn total in sales tax revenue bonds issued by the Puerto Rico Sales Tax Financing Corporation (COFINA). GoldenTree has accumulated hundreds of millions of dollars in paper profits while the islands recovery efforts have stalled under austerity measures that are designed to deliver investment returns to bondholders, like the hedge fund.

Tananbaum helped found GoldenTree, which manages more than $25bn according to its website. He serves as the companys managing partner and chief investment officer. Just days before Hurricane Maria hit Puerto Rico, he attended a Milken Institute conference in Singapore where he challenged investors to pursue risk bonds in danger of defaulting because of their relative cheapness. Through his firm, Tananbaum has also brought together a group of COFINA bondholders, which includes other hedge funds, that have been advocating for Congress to raise interest payments on Puerto Ricos debt as the islands pension system and government services continue to teeter on the brink of collapse.

Over the last four years, federal disclosures show that the group has spent $1.43m on lobbyists targeting bills like the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which was supposed to steer the islands economy back into the black after Congress phased out a corporate tax credit programme that buoyed the islands business developments from 1996 to 2006.

GoldenTrees actions have made it a target of politicians and interest groups, who consider the debt restructuring unconstitutional and potentially illegal. Tananbaum, in particular, has become the subject of public scrutiny because of his position on the Museum of Modern Arts trustee board. Critics say his leadership at the vulture fund puts him at odds with the institutions ethical responsibilities, and its affiliate MoMA PS1s past efforts to help Hurricane Maria victims.

“Steven Tananbaum is using cultural institutions to create an image of himself as a philanthropist who cares about society,” says Abner Dennis, a Puerto Rican research analyst with the Public Accountability Initiative, a nonprofit watchdog group focused on corporations and governance. “I think thats dangerous because it normalises the violent and unethical ideals of a businessman who profits from the suffering of others.”

According to Dennis, GoldenTree has become known on the island for its attempts to sway Puerto Rican legislation and bankruptcy proceedings in its favour. When the hedge fund faced resistance on a plan to reduce the Puerto Rico Electric Power Authority's (PREPA) debt by 32.5% over the next four decades, which would eventually result in higher utility fees for customers, investors simply bought another company to bolster their position. On 5 September, GoldenTree acquired Syncore Holdings Ltd for $429m in cash. Four days later, Syncora announced that it had agreed to join the PREPA Restructuring Support Agreement.

“When Hurricane Maria devastated Puerto Rico, many of us looked for ways to help,” Jimmy Van Bramer, the ambitious New York City Council representative from Queens who also chairs the legislative bodys Cultural Affairs, Libraries and International Intergroup Relations Committee, says in a statement. Two weeks after Hurricane Maria ripped through Puerto Rico with devastating force on 20 September 2017, MoMA PS1 held a fundraiser. The Center For Popular Democracy organised the event alongside Klaus Biesenbach, the museum's then-director, and Van Bramer. Attendees donating a minimum $20 at the door would have spotted actors James Franco and Rosie Perez inside the charity event, as well as other notable celebrities and politicians. The evening was considered a great success, raising $36,000 for storm victims.

“At no time was I aware of the business interests of MoMA trustees,” the councilman adds. “Its disgraceful for anyone to make money off of the suffering of the Puerto Rican people. All of Puerto Ricos debt should be wiped away and anyone profiting off of the pain of the Puerto Rican people is unfit to serve our cultural boards.”

In addition to sitting on MoMAs board, Tananbaum also endowed a curatorship named after himself and his wife, Lisa, in the museums Department of Painting and Sculpture. In March, Ugochukwu-Smooth C. Nzewi, a scholar of African art, was named to the position. Tananbaum is also a member of the Council on Foreign Relations, a foreign policy think tank that has denounced the tactics of COFINA bondholders like GoldenTree in blog posts. “Even after the restructuring, payments on the COFINA bonds would put Puerto Rico's debt burden [judged relative to its revenue] above that of an average state,” wrote Brad SeRead More – Source