House Investigates Corruption At Puerto Rico’s Debt-Laden Utility Handling Recovery Efforts

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Michael Bastasch Contributor
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House lawmakers launched an investigation into “allegations of corruption and gross mismanagement” made against Puerto Rico Electric Power Authority (PREPA) officials in charge of restoring power to the island.

Top Republicans are demanding documents regarding corruption and mismanagement at PREPA — the heavily indebted Puerto Rico public utility in charge of managing the island’s electric grid.

“Much of the reported corruption concerns PREPA officials accepting or demanding bribes to restore power to residences and businesses,” Committee on Natural Resources GOP legislators wrote to PREPA interim director Justo González.

Recovery efforts in the wake of Hurricane Maria have been slow. More than 150,000 Puerto Ricans are still without electricity nearly six months after the Category 4 storm smashed into the U.S. territory.

Maria caused as estimated $90 billion worth of damage to Puerto Rico, wiping out power and running water for the entire island. Democrats criticized President Donald Trump’s administration’s response to the incident, but reports on the ground suggest PREPA corruption and mismanagement hampered recovery efforts.

Reports show PREPA officials were bribed to restore power to “exotic dance clubs” in the San Juan area ahead of when they were supposed to be re-powered, House lawmakers pointed out.

PREPA officials were also accused of restoring power to their own homes before “critical locations,” like San Juan’s main hospital and airport, lawmakers said. Such “out-of-sequence” power restoration is linked to at least two fires that caused outages, lawmakers added.

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House Republicans also demanded documents and communications regarding a January raid federal officials conducted on PREPA’s “Warehouse 5,” where they found critical supplies not listed in the utility’s inventories.

The supplies sitting in the secretive warehouse were for old, outdated equipment, PREPA officials initially said but then changed their story. This has lawmakers concerned the supplies were intentionally being kept from crews.

“These latest allegations of corruption and mismanagement raise serious questions regarding PREPA’s internal controls and ability to competently manage power restoration in Puerto Rico,” lawmakers wrote in their Monday letter.

“Billions of taxpayer dollars are pledged to help Puerto Rico, but a lack of faith in Puerto Rico’s institutions remains a major barrier to recovery,” lawmakers wrote.

PREPA has been struggling under mismanagement for years, burdened with $9 billion in debt obligations. The utility’s former Executive Director Ricardo Ramos resigned in November 2017 amid federal scrutiny over a $300 million contract with an energy firm in Montana. Puerto Rico currently has plans to privatize PREPA.

PREPA is “a heavy burden on our people, who are now hostage to its poor service and high cost, Governor Ricardo Rosello said of PREPA when announcing the plan. PREPA “does not work and cannot continue to operate like this,” Rossello said.

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