Puerto Rico Wants $94 Billion in Aid, Are Told They Must Overcome Their “Credibility Gap”

Puerto Rico, still trying to recover from the reported $45-$95 billion in damage caused by Hurricane Maria, has requested as much as $94 billion in federal aid via a letter sent Monday from Puerto Rico Governor Ricardo Rossello to President Donald Trump.

“The scale and scope of the catastrophe in Puerto Rico in the aftermath of Hurricane Maria knows no historic precedent,” Rossello’s letter read. “We are calling upon your administration to request an emergency supplemental appropriation bill that addresses our unique unmet needs with strength and expediency.”

Rossello then spent all day Tuesday on Capitol Hill testifying as to why the Puerto Rico Electric Power Agency (PREPA) signed a $300 million contract with a tiny Montana energy company called Whitefish Energy Holdings that led to very little work completed — much of the island remained dark nearly a month after the storm — at a rate of over $300 per hour. Rossello tried to distance himself from the contract while answering questions before both the House Natural Resources Committee and the Senate Energy and Natural Resources Committee, but investigators were given documents showing PREPA ignored legal advice that would have protected the island in the Whitefish deal.

[House Natural Resources] Committee chair Rob Bishop (R-UT) criticized the contract process and expressed skepticism that the island government is prepared to take on the task of hurricane recovery without significant federal oversight.

“A legacy of dysfunction (at Prepa) has created a competence deficit that threatens the Island’s ability to improve conditions for its citizens,” Bishop said in a statement. “Confidence in the utility’s ability to manage contracts and time-sensitive disaster related infrastructure work is long gone.”

Bishop stated that despite near “universal criticism” of the contract, the executive director continued to defend the contract for weeks until the governor ordered its cancellation.

“This lack of institutional control within Puerto Rico’s largest municipal debtor raises grave concerns about Prepa’s, and by association, the government of Puerto Rico’s ability to competently negotiate manage and implement infrastructure projects without significant independent oversight,” Bishop stated, adding that the island’s “controversial decisions” may have made the crisis worse.

Bishop told Rossello he believed the island needed the money but that they must overcome a “credibility gap” if they are going to convince Congress to send the amount requested.

A PREPA executive who also testified Tuesday said he chose to enter into the contract with Whitefish, despite available stateside help that would have been cheaper, because he believed Whitefish was equipped to offer immediate assistance.

Whitefish CEO Andy Techmanski has called the investigation into the Whitefish deal a  “witch hunt.” The Government Accountability Office and the FBI join Congress in investigating the specifics of the contract.

Rossello also warned Congress that as legislators negotiate a tax reform bill, any new taxes levied against the island could be disastrous to Puerto Rico’s economy as it recovers, and could add to the number of residents fleeing.

“If Congress does not consider Puerto Rico in tax reform it would lead to the exodus of companies that currently generate 42 percent of Puerto Rico’s gross domestic product, the loss of jobs on the island and exacerbate the outward migration of island residents moving to the mainland,” a statement accompanying Rosello’s letter to President Trump read.

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