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Turmoil calms as Puerto Rico governor turns to policy

Wednesday, August 14, 2019

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SAN JUAN, Puerto Rico (AP) — Puerto Rico's political turmoil seemed to be at least temporarily easing on Monday with attention shifting from protests to policy following the replacement governor's move to suspend a hurricane recovery contract.

In one of her first moves as governor, Wanda Vázquez announced late Sunday that she was scrutinising a US$450,000 contract that has since been cancelled and was part of the programme to rebuild and strengthen the island's power grid, which was destroyed by Hurricane Maria nearly two years ago.

“There is no room in this administration for unreasonable expenses,” said Vázquez, who on Wednesday became Puerto Rico's third governor in a week following massive protests that resulted in political turmoil.

Immediate pressure on the new governor appeared to be easing somewhat. There have been no large protests since she was sworn in and none appeared to be on the horizon.

On Monday, Vázquez asked people to give her an opportunity.

“The people of Puerto Rico know I'm here because the constitution dictated it,” she said, adding that she has spent 32 years in public service, including as a district attorney and justice secretary. “Throughout my trajectory, I was able to see the need, the poverty, the desperation, the helplessness and also the will of the people to keep moving forward ... I want to keep using those experiences for the benefit of the people.”

Vázquez said one of her priorities is to evaluate all government contracts. Anger still simmers across the US territory over corruption and mismanagement of public funds led to the recent ouster of the island's former leader.

On Monday, a federal control board overseeing Puerto Rico's finances requested copy of all contracts that former Governor Ricardo Rosselló signed in the last two weeks before he stepped down, noting that media reports said he signed more than 200 contracts worth some US$80 million. The board said in its letter to Chief Financial Officer Omar Marrero that it has to approve any contracts worth US$10 million or more.

The contract that Vázquez called into question was one that Puerto Rico's Electric Power Authority, which is more than US$9 billion in debt, had been expected to sign the contract with Stantec, a consulting firm based in Canada. Vázquez did not explain why she wanted to suspend the deal, saying only that transparency is a priority for her administration.

José Ortiz, the power company's director, said on Sunday that it was important to sign the contract. But, after meeting with Vázquez on Monday, he said the deal with Stantec had been cancelled because the Puerto Rico office charged with overseeing federal hurricane recovery funds reached an agreement with the US Federal Emergency Management Agency that same day (FEMA). Ortiz said FEMA by today would deposit US$108 million needed to pay contractors who had been waiting for the money since February, adding that the contract with Stantec was no longer necessary.

A Stantec official based in Puerto Rico did not respond to a request for comment.

Puerto Rico's power company has awarded several multimillion-dollar contracts since the Category 4 storm hit on September 20, 2017, and many of those deals have come under intense scrutiny, with some being cancelled. Currently, Mammoth Energy Services' subsidiary Cobra Acquisitions, which has some US$1.8 billion in contracts with the power company, is facing a federal investigation.

Efforts to rebuild and bolster the power grid have been delayed as it remains fragile and prone to outages that have exasperated many of the island's 3.2 million people.

Economist José Caraballo said he hopes Vázquez's announcement is the first of more changes to come.

“I hope this isn't a smoke screen and that there's a real audit,” he said in a phone interview. “That's what all these people who have lost trust in the government expect.”

Puerto Rico has been mired in political turmoil, with former Governor Ricardo Rosselló resigning August 2 following large protests. The island's Supreme Court then ruled that his replacement was illegally sworn in, which left Vázquez, the justice secretary, next in line to become governor. The US territory also is struggling to emerge from a 13-year recession and trying to restructure some of its more than US$70-billion public debt load.


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