Island’s Energy Future Uncertain After Marathon Congressional Hearing

There seems to be no apparent resolution after the House Natural Resources Committee public hearing on the status of the reconstruction and privatization of the Electric Power Authority (PREPA). The unusually prolonged hearing saw 12 witnesses testify and answer questions on allegations of mismanagement, political interference, and rumors of corruption at the government-owned utility. At one point, Puerto Rican Congresswoman Nydia Velázquez (D-NY) questioned PREPA Director José Ortiz about what he could do to guarantee that no political interference will happen at the utility moving forward. Ortiz laughed and said, “That’s a big guarantee,” and later said, “No one in Puerto Rico trusts PREPA.”

The hearing also focused on former Financial Oversight and Management Board (FOMB) Revitalization Coordinator, Noel Zamot’s testimony. Zamot resigned last month after publicly complaining about undue political interference. When asked about specifics about his allegations, Zamot answered that he has already spoken about it to “the proper authorities.”

Other important highlights included the failure of both US Department of Energy Representative Bruce Walker and Ortiz to specifically state the status of $2 billion in Community Development Block Grant for Disaster Relief (CDBG-DR), set aside by Congress for the reconstruction of Puerto Rico’s electric grid. Ortiz clarified that the privatization process involved outsourcing management and not ownership of the current public utility’s assets.

Puerto Rico Continues to be Sticking Point in Stalled Disaster Funding Bill

A bill providing approximately $16 billion in emergency disaster funding for several states and territories affected by recent natural disasters continues to be stuck in the Senate due to disagreement over funding for hurricane relief in Puerto Rico. After agreeing to provide $600 million to Puerto Rico’s emergency Nutritional Assistance Program (NAP), Republicans are refusing to include additional assistance to the Island. Trump’s false insistence that Puerto Rico is getting more aid than states and that the Island has money it is not using (which is also not true) has contributed to the impasse.

House Democrats announced this week that they would introduce a new bill to address Puerto Rico’s concerns and provide more funding for midwestern states. The stalemate has already affected more than one million food stamp recipients in Puerto Rico, who started to see as much as 25% in benefit cuts. Congressional negotiators announced that they will not reach an agreement in time, and therefore Congress will have take up the matter again in May.

Corruption Allegations Rock the Island

The immediate resignation of the Education Secretary, Julia Keleher, was followed by explosive news that federal authorities had raided her business partner’s home, seeking evidence of wrongdoing and mismanagement in the Department’s contracting. Keleher faced even more heat after resigning because it was announced she would keep her $250,000 a year contract with the Fiscal Agency and Financial Advisory Authority (AAFAF in Spanish), which later relented and cancelled the contract.

Further complicating matters for Governor Ricardo Rosselló’s Administration was news that Keleher hired a law firm in 2017 that includes the Governor’s elder brother, Jay Rosselló, as one of its partners. The Governor denied that his brother was involved, referring to him as a mere “translator.” However, the firm’s website represented Jay Rosselló as the firm’s contact for services related to the establishment of charter schools on the Island. Keleher was the chief architect of an educational reform that introduced charter schools and private school vouchers to the Island.