Before the 1960s conceptualization and legalization of birth control in the U.S., a large-scale human trial was carried out in a public housing project in Puerto Rico a decade before. The contraceptive pill was tested on nearly 1,500 women for several years.
The trials were conducted by biologist Gregory Pincus and pharmacist John Rock, who were backed by birth control advocate Margaret Sanger. Before these large-scale trials, the drug had only been tested on rats and rabbits as well as a small group of women at Rock’s medical practice in Massachusetts.
“The controversy over the field trials began almost the minute the first woman swallowed a pill,” Margaret Marsh, co-author of The Fertility Doctor: John Rock and the Reproductive Revolution, told the Washington Post. “Within weeks of the trial’s start, El Imparcial, a popular newspaper, accused the project’s sponsors of conducting a ‘neomalthusian campaign,’ and local doctors told their patients that the pill was dangerous.”
The women participating in the trial were not made aware of the possible side-effects or potential risks of the pill. They were simply handed the pills free of charge. “They may have been poor, but they certainly had aspirations for their families,” Marsh added.
At the time, according to the doctors’ reports, three healthy women died but no autopsies were conducted. “In some ways, it was exploitative – you’re giving this drug that you don’t really know for sure what its effects are going to be,” Marsh pointed out. “On the other hand, the people involved in developing it really believed it was safe,” she told the Washington Post.
Many have compared the Puerto Rico human trials to the Tuskegee Syphilis Study, in which the government conducted research on 600 African American men in Alabama for 40 years.
With its creditors at its heels and its coffers depleted, Puerto Rico sought what is essentially bankruptcy relief in federal court on Wednesday, the first time in history that an American state or territory had taken the extraordinary measure.
The action sent Puerto Rico, whose approximately $123 billion in debt and pension obligations far exceeds the $18 billion bankruptcy filed by Detroit in 2013, to uncharted ground.
While the court proceedings could eventually make the island solvent for the first time in decades, the more immediate repercussions will likely be grim: Government workers will forgo pension money, public health and infrastructure projects will go wanting, and the “brain drain” the island has been suffering as professionals move to the mainland could intensify.
Puerto Rico is “unable to provide its citizens effective services” because of the crushing weight of its debt, according to a filing on Wednesday by the federal board that has supervised the island’s financial affairs since last year.
The total includes about $74 billion in bond debt and $49 billion in unfunded pension obligations.
While many of Puerto Rico’s circumstances are unique, its case is also a warning sign for many American states and municipalities — such as Illinois and Philadelphia — that are facing some of the same strains, including rising pension costs, crumbling infrastructure, departing taxpayers and credit downgrades that make it more expensive to raise money. Historically, Puerto Rico was barred from declaring bankruptcy. In the end, however, financial reality trumped the statutes, and Congress enacted a law last year allowing bankruptcy-like proceedings.
Puerto Rico has been in a painful recession since 2006, and previous governments dug it deeper into debt by borrowing to pay operating expenses, year after year. For the last two years, officials have been seeking assistance from Washington, testifying before stern congressional committees and even making fast-track oral arguments before the United States Supreme Court.
At the same time, Puerto Rico’s efforts to coax its creditors to agree to concessions have gone nowhere. Now the coming court proceedings will give Puerto Rico extraordinary powers to impose losses on holdout creditors unilaterally.
The island’s many creditors — whose lawsuits filed against Puerto Rico on Tuesday prompted the island’s request for court relief on Wednesday — are likely to receive far less of their money back than they want. Their predicament may turn out to be a cautionary tale for bond holders of other troubled states and cities. Puerto Rico’s case could show public workers and retirees that seemingly inviolate pension systems can be changed, too.
The next step is for the Supreme Court — specifically, Chief Justice John G. Roberts Jr. — to designate a federal district judge to handle the case.
The island’s lawyers may view some district courts as more likely to be favorable to them than others. Some creditors fear Puerto Rico will seek to have the case handled in the Southern District of New York.
Puerto Rico’s governor, Ricardo Rosselló, issued a statement Wednesday aiming to offer some reassurance, even as he sought the federal court’s protection. “We remain committed to holding good-faith negotiations to reach agreements with our creditors,” he said, adding that he hoped the court proceedings would “accelerate the process.” He appeared to be referring to the extraordinary power Puerto Rico will now have in court to unilaterally impose big losses on creditors.
Some of those creditors are furious.
“The Commonwealth’s proposal is not a credible starting point for negotiations,” Andrew Rosenberg of Paul, Weiss, Rifkind, Wharton and Garrison, an adviser to the Ad Hoc Group of Puerto Rico General Obligation Bondholders, said in a statement. He said that moving the proceedings to bankruptcy court would put the situation in “free-fall.”
The creditors got a shock this year when Mr. Rosselló issued a five-year fiscal plan that allowed only about $800 million a year to pay principal and interest on Puerto Rico’s bond debt, far less than the roughly $3.5 billion a year it would cost to make those payments on time. The prospect of losses on that scale prompted some creditors to argue that most of the $800 million was rightfully theirs.
“That things are starting out in such a highly adversarial way strongly suggests this will be a long and contentious journey for Puerto Rico,” said Matt Fabian, a partner at Municipal Market Analytics who closely tracks activity in the municipal bond market.
Puerto Rico’s case will be the first ever heard under a federal law for insolvent territories, called Promesa, which was enacted last summer; the Obama administration had warned that a “humanitarian crisis” would ensue if Puerto Rico were not given extraordinary powers to abrogate debt. There is no existing body of court precedent for Promesa, but the island’s creditors — who range from hedge fund managers to mom-and-pop investors — are bracing for a titanic battle.
Despite the depth of the island’s troubles, many Republicans in Congress have opposed debt relief, saying that the island has long received big federal subsidies for its health system, public housing and other works. They said Puerto Rico should explain what it had done with that money before it got any more help.
Last week President Trump suddenly added fuel to those fires, saying on Twitter that there should be no “bailout” for Puerto Rico.
On the island, Washington is not seen as a helper but as an unsympathetic colonial overlord. The step toward bankruptcy-like proceedings, under a federal judge, intensified complaints that Puerto Rico has lost all control of its own future.
But at the same time, some Puerto Ricans say quietly that if the court proceedings really do allow their government to cancel debt, their island may finally get the fresh start it needs.
The coming court proceedings will not be formally called a bankruptcy, since Puerto Rico remains legally barred from using Chapter 9, the bankruptcy route normally taken by insolvent local governments. Instead, Mr. Rosselló petitioned for relief under Title III of the Promesa law, which contains certain Chapter 9 bankruptcy provisions but also recognizes that, unlike the cities and counties that use Chapter 9, Puerto Rico is not part of any state and must in some ways be treated as a sovereign.
Bankruptcy lawyers and public finance experts are watching Puerto Rico’s case closely, to see if it shows a path that financially distressed states like Illinois might also one day take. States, like United States territories, currently cannot declare bankruptcy.
The only creditors who reached an agreement with Puerto Rico were the holders of a class of bonds, about $9 billion worth, that were sold to raise money for the island’s public power utility. Those creditors gave concessions that the governor pointed to Wednesday as a good example for other creditors to follow.
The governor’s fiscal plan also calls for shifting all current government workers from pensions into 401(k)-style retirement plans. Current retirees will continue to receive their traditional monthly pensions, but the amounts are to be reduced by about 10 percent on average.
The governor’s hand was forced by the expiration on Monday, at midnight, of a court stay that had been keeping Puerto Rico’s creditors from suing. On Tuesday, as soon as the stay expired, bondholder groups and at least one bond insurer sued. Wednesday’s actions by the governor and the federal supervisory board effectively blocked the lawsuits from proceeding.
An earlier version of this article misstated the annual cost of fully servicing Puerto Rico’s $73 billion in bond debt. It would be about $3.5 billion, not $3.5 million.
An article on Thursday about Puerto Rico’s debt relief effort misstated the amount of its unfunded pension obligation. It is $49 billion, not $49 million. The article also misstated the type of judge and court that the Supreme Court would designate to handle Puerto Rico’s case. It will be a federal district court and judge, not a bankruptcy court and judge.
Tunnel Collapses at Washington Nuclear Waste Plant
A section of a tunnel at a plutonium-handling facility at Hanford Nuclear Reservation in Washington state collapsed, on Tuesday.
According to federal officials, there was no indication workers or the general public were exposed to any radiation. Plant employees reportedly evacuated and turned off the ventilation systems at the premises, upon discovering the damage.
Spokesman Destry Henderson said response crews discovered that the damage was more extensive than first thought, after they found a 400-square-foot section of the decommissioned rail tunnel had collapsed. “The roof had caved in, about a 20-foot section of that tunnel, which is about a hundred feet long,” he said. “This is purely precautionary. No employees were hurt and there is no indication of a spread of radiological contamination,” Henderson added.
According to Energy Department officials, no spent nuclear fuel is stored in the tunnel, which is located about 170 miles east of Seattle near southeastern Washington on the Columbia River. The federal government-operated facility was established in the 1940s. It manufactured the plutonium that was used in the first-ever nuclear bomb.
An executive director of watchdog organization Hanford Challenge, Tom Carpenter, communicated with workers at the site of the incident. He said the collapse of the tunnel is worrisome. “There is a big hole there and radiation could be beaming out,” he said. “It’s not clear to me that they know whether particulate radiation has escaped,” Carpenter elaborated. “If there is a cloud of radioactive particulates, then that can have an impact on worker health and the community. It does not take a lot for those particulates to end up in someone’s lung.”
The Energy Department is currently conducting clean up operations. Carpenter called it the most contaminated U.S. site. He also estimated that the total cleanup costs could fall anywhere from $300 billion to $500 billion.