Corruption and anti-corruption are at the center of political and sociolegal debates in Puerto Rico (PR). For example, in 2012, the PR government legislated a new tax incentive law (Act 273) that allowed international financial institutions and banks to move to PR and pay close to 0% gain, municipal, and other taxes. For some scholars and civil society organizations, this law transformed the archipelago into an Offshore Financial Center (OFC) or a money laundering hub. In 2019, the PR government amended that law (Act 60) and provided more incentives for international banks to move to the archipelago. As a result, 80 international banks have moved to PR. Later, in 2019, the European Union blacklisted PR as a high-risk money laundering jurisdiction. Scholars have produced a series of divergent understandings in the interpretation of these events: For some, these laws are a source of corruption and for others, they are a pivotal economic developmental policy. The thin line separating OFCs as corrupt or economically sound, I argue, is drawn by local and transnational understandings of corruption.
The chapter shows that to understand corruption in PR, one must look at the long-lasting sociolegal and political development of the PR government and its colonial relationship with the US. Thus, rather than analyzing corruption as a moment of rupture or scandal, this chapter studies corruption as part of a historical unfolding sociolegal processes embedded in colonialism and policies implemented to address the multilayered crisis affecting the archipelago since 2006. That is, a regimen of permission as mechanisms for the Paradise to Perform.
This chapter discusses the following aspects: 1) the laws and policies implemented by the PR and US governments that transformed PR into an OFC, 2) a discussion of the banks and law firms taking advantage of the OFC in PR, 3) the US, EU, and international interventions with banks established in PR for money laundering, and 4) the sociolegal mobilizations challenging these laws and transformations. By engaging with the specific sociolegal transformation of PR into an IFC, this chapter aims to shed light on the dynamics of corruption and anti-corruption taking place in PR.
Dr. Jose Atiles is an Assistant Professor of Sociology at the University of Illinois at Urbana-Champaign. Prior to his arrival at Illinois, Dr. Atiles was a Visiting Assistant Professor of Legal Studies at the University of Massachusetts, Amherst (2019), faculty member at the University of Puerto Rico, Mayagüez (2014-2018), and Researcher at the Center for Social Studies at the University of Coimbra (2015-2019). Dr. Atiles holds a Ph.D. in Sociology of Law from the University of Coimbra (Portugal), and Ph.D. in Philosophy from the University of the Basque Country (Spain). His research and publications focus primarily on the sociolegal, criminological and political philosophical implications of US colonialism in Puerto Rico, and to elucidate how the uses of law and exceptionality, the criminalization of Puerto Rican anticolonial and political mobilizations, and state violence and corporate crime exacerbates the unequal and undemocratic condition of Puerto Rico.