A CALL FOR TRANSPARENCY IN SPORTS TO THE GOVERNMENT OF PUERTO RICO.

• Author: Aponte, Karla V.

1. THE PROBLEM

   For decades, Puerto Rico has been home to record-breaking athletes. (2) Yet, with time, it has become a trend that many professional Puerto Rican athletes migrate to the United States to attain their maximum potential in their respective sport outside the island. (3) Unfortunately, this is just one of the many ways that lack of regulation has affected sports in Puerto Rico. In the United States, sports federations are known as National Governing Bodies. (4) The federal law that regulates National Governing Bodies is known as The Amateur Sports Act of 1978 ("Sports Act of 1978"). (5) National Governing Bodies, at the face of this law, "represent the United States in the appropriate international sports federation." (6) This language limits the applicability of the law strictly to the United States, and leaves athletes in Puerto Rico unprotected by the federal law. Additionally, although Puerto Rico is a United States territory, it has its own Olympic identity and is recognized as a country in the Olympics. (7) The International Olympic Committee has the sole authority to recognize a National Olympic Committee, and in 1948 they recognized Puerto Rico as a separate entity from the United States. (8) This makes it the responsibility of the territory itself to regulate sports however it deems appropriate. Unfortunately, not enough has been done to protect athletes' rights, or the general wellbeing of sports in Puerto Rico. The Government of Puerto Rico has only enacted one law, the Organic Law of the Department of Sports and Recreation, that attempts to regulate national governing bodies. (9) This law creates the Sports and Recreation Department of Puerto Rico, whose primary functions include but are not limited to: the formulation and implementation of sports law, the impulse of sports and of high-level, high-performance Puerto Rican athletes, and the overall promotion of sports on the island. (10) In sum, it makes the Sports and Recreation Department oversee sports federations, to some degree. (11) However, it does not require any financial auditing procedures for sports federations, or layout any national, professional, or amateur athlete's rights. In fact, it does not even require a sanctioning protocol to manage sexual harassment claims in sports. (12) In the United States, National Governing Bodies are classified as congressionally chartered corporations. (13) This status requires that the entity be incorporated first under state law, then request that Congress grant them a congressional or federal charter. (14) Although the National Governing Bodies are classified as non-profit, Congress requires, all "private corporations established under federal law," as defined and listed in Subtitle II, are required to undergo independent audits annually, and to submit the findings along with the audit report to Congress. (15) In Puerto Rico, sports federations are incorporated as mere non-profit entities, which do not pay taxes or contributions, and are not subject to financial auditing. (16)

   In order for a non-profit corporation to receive tax exemptions in Puerto Rico, it must request an exemption certificate from the Department of the Treasury on the island. (17) However, the Department of Treasury lacks personnel to oversee these requests. (18) A disproportionately small amount of employees in the Department of Treasury audit and inspect the Sales and Use Tax (IVU), the 1.2 million tax returns filed, the business and individual filings, the taxes, and taxes on foreigners. Moreover, even fewer employees oversee the non-profit corporation tax exemption applications and look for any irregularities. (19) Due to its nature, a nonprofit corporation cannot report year-end earnings; however, they can furnish their executives and directors with whatever salary they deem appropriate, and expend egregious amounts of money on rent and consulting fees. (20)

   As a result, sports federations and other non-profit entities incorporated as sports teams and leagues in Puerto Rico have no say in their decisions and expenditures, ultimately leaving the door open for the misuse of public property and funds, lack of financial transparency and accountability, and infringement on athletes' rights. (21)

2. INTRODUCTION

   To fully comprehend the nature of the problem, it is imperative to first understand two concepts: (1) the historical relationship between the United States and Puerto Rico, and (2) the degree of autonomy of the commonwealth.

   1. Historical Relationship Between the United States and Puerto Rico

      On July 25 of 1898, towards the end of the Spanish-American War, United States military leader, Nelson Miles, reached the port of Puerto Rico's southern city of Guanica, and proceeded to invade the island. (22) The island was colonized by Spain at the time, and the subsequent war with Spanish forces lasted only three days. (23) After the defeat of Spain, representatives of the United States and Spain met at the French capital on December 10 of 1898 to sign the Treaty of Paris, which officially ended the Spanish-American War. (24) The treaty approved the cession of Puerto Rico (as well as the Philippines, Cuba, and Guam) to the United States. (25) Once military victory was achieved in the summer of 1898, the United States rapidly set up a military government on the island that lasted until 1900. (26)

      In 1900, the United States Congress enacted the Organic Act of 1900, more commonly known as the "Foraker Act," which provided for a civil government under Governor Charles Allen. (27) The Foraker Act acknowledged Puerto Rico as a territory belonging to the United States, but denied American citizenship to Puerto Ricans. (28) Just about one month before the United States entered World War I, President Woodrow Wilson signed the Jones-Shafroth Act, which granted U.S. citizenship to the residents of Puerto Rico, but this did not change the territorial and colonial condition of the island. (29) In 1948, after years of demanding leadership by an elected governor, Puerto Ricans were led by their first governor-elect, Luis Munoz Marin. (30) After the United States received pressure from the United Nations to liberate their colonies, the United States Congress approved a new Puerto Rican Constitution, where it was established that Puerto Rico was now a freely associated U.S. commonwealth. (31) With over 70 years under this political status, Puerto Rico faces three clear options regarding the future of the island's status; (1) maintain its current status as a commonwealth of the United States, (2) become independent, or (3) become a state. All throughout history, Puerto Rico has held a total of six referendums regarding their political status. (32) These referendums are non-binding, since the United States Constitution explicitly grants Congress the power "to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States" thereby having plenary power over the status of Puerto Rico. (33) The process is not always neutral, and sometimes ballot language has been phrased to favor the party in office. (34) For example, in 1998 "none of the above" was included as an option, and was the preferred form of recourse in this referendum. (35) In 2012, 61% of counted votes went to statehood, and half a million ballots were left blank. (36) The latest referendum was held on November 2020, with a majority of voters opting for statehood. (37)

   2. Degree of Autonomy

      Although Puerto Rico is subject to Congress' plenary powers because of Puerto Rico's status as an unincorporated U.S. territory, the citizens of Puerto Rico do not have any voting representation in the U.S. Federal government. (38)

      Instead of having direct representation through Senators and House Representatives, Puerto Rico has one non-voting Resident Commissioner in the House of Representatives. (39) Much like states, Puerto Rico has its own Constitution that cannot interfere with U.S. federal law. (40) Because of what is set forth by the Federal Relations Act of 1950, all federal laws that are "not locally inapplicable" are instantly governing law in Puerto Rico. (41) The Supreme Court has held that the unincorporated territory status means that Federal laws can be applied to Puerto Rico differently, and that Congress "may treat Puerto Rico differently from States so long as there is a rational basis for its actions." (42) This has limited the social and political development of Puerto Rico and hindered its economy. (43)

3. CONFLICTING CLAIMS

   Lack of regulation in sports concerns not only athletes, sports organizations, and educational institutions, but society in general.

   1. Athletes

      All Puerto Rican athletes have suffered the effects of government involvement and lack of financial auditing in sports federations, but national athletes are the ones who have been most directly affected. (44) Currently, there is no applicable law in Puerto Rico that protects athletes' physical or emotional health, fair compensation, or elite level resources to develop their maximum potential as athletes in their respective sports. (45)

      Monica Puig was the first Puerto Rican athlete to win Olympic gold for Puerto Rico. (46) She did so in the sport of tennis. (47) Although Puerto Rican, Puig developed herself as a tennis star in the United States, where she grew up. (48) With the hopes of following in her footsteps, Lauren Anzalotta ("Anzalotta") decided to pursue a similar route. (49) Blessed with the support of her family in Puerto Rico, she was able to get recruited at a very young age to train amongst the top tennis prospects in the United States. (50) While training there, she was forced to choose which country to represent: Puerto Rico or the United States. (51) Her strong sense of honor and pride for her roots made her choose Puerto Rico, despite training full time in the United States. (52) For nearly a decade, her family made...