The Fiscal Oversight Board (FOB) yesterday held its tenth meeting in San Juan. FOB Executive Director Natalie Jaresko said that Hurricane María changed the reality in Puerto Rico and requested that Governor Ricardo Rosselló draft a new Fiscal Plan for the Commonwealth by December 22. Jaresko and Rosselló’s Representative on the FOB, Government Development Bank (GDB) President Cristian Sobrino, both estimated that due to the storm, the Island would lose about 15% of its population by December of this year. The FOB also requested revised fiscal plans from the GDB, COSSEC, HTA, and the UPR.
Whitefish contract canceled, Army Corps increases separate electrification deal
Governor Ricardo Rosselló called on the Governing Board of the Electric Power Authority (PREPA) to cancel its $300 million contract with Whitefish Energy, a Montana company that had only two full-time employees at the time of the deal. The agreement will not be immediately stopped, PREPA Director Ricardo Ramos said, since the company must still complete its work on two power lines. After cancelation fees and payment for work performed, the Puerto Rican utility will wind-up paying around $30 million to Whitefish.
The contract had been dogged by controversy from the start, with watchdogs questioning its owner’s contributions to the Trump campaign and the close relationship that Whitefish shares with Interior Secretary Ryan Zinke. Media initially focused on the deal due to PREPA’s rejection of contractors that the American Public Power Association (APPA) typically uses for this type of emergency, citing that the public corporation did not have $25 million for upfront payments. However, Ramos later admitted that PREPA had a $100 million reserve fund. APPA denied that such details were discussed.
Other details of the Whitefish contract and how it was entered into have also been criticized, such as a clause stating that the Federal Emergency Management Agency (FEMA) had approved the contract (FEMA denies this), and a clause preventing non-FEMA agencies from auditing profits generated from the contract. Another curious detail: the utility’s law firm, Greenberg and Taurig, said that they did not review the contract before it was signed. Ramos announced the pending cancellation of the contract, defended its legality, and warned that nixing it will delay the restoration of power by 10-12 weeks.
Hill committee cancel hearing to avoid San Juan Mayor testimony
For the second time in as many weeks, the House Homeland Security Committee canceled a hearing to discuss the federal government response to Hurricanes Harvey, Irma, and María. FEMA Administrator Brock Long and other administration officials would have testified along with San Juan Mayor Carmen Yulín Cruz. Ranking Member Bennie Thompson (D-MS) blasted the committee’s majority GOP decision, saying they wanted to silence Cruz. The Mayor had already boarded the plane for D.C. when she heard the hearing was cancelled.