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

Silent Protest in NY for Puerto Rica

Zachary Small (The Art Newspaper) writes that, as New York’s Museum of Modern Art opens an ambitious $450 million dollar expansion, activists are demanding that “vulture fund” investor Steven Tananbaum be taken off the board—but “he is not the only trustee with financial interests in the island,” he says.

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 museum’s board. Fidelity Investments, which manages MoMA’s 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 MoMA’s trustee Steven Tananbaum, who founded GoldenTree Asset Management, a hedge fund that owns at least $2.5bn of Puerto Rico’s debt and has profited from the island’s financial crisis. “The demand is to take action and remove Tananbaum. As long as he is on [MoMA’s] 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 city’s current Public Advocate Jumaane Williams.

“People died after Hurricane Maria and [Tananbaum] didn’t 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 Commonwealth’s 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 island’s 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 island’s 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 company’s 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 Rico’s debt as the island’s 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 island’s economy back into the black after Congress phased out a corporate tax credit programme that buoyed the island’s business developments from 1996 to 2006.

GoldenTree’s 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 Art’s trustee board. Critics say his leadership at the vulture fund puts him at odds with the institution’s ethical responsibilities, and its affiliate MoMA PS1’s past efforts to help Hurricane Maria victims. [. . .]

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