[REVISED] Questions Remain Over How to Help Puerto Rico, Whitefish Energy Contract

 

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Congress discussed Puerto Rico’s recovery during a hearing on Tuesday. So many people were in attendance there had to be an extra over-flow room to screen the hearing.

By Madeleine Simon

WASHINGTON –  While Puerto Rican representatives called on the federal government to do more to recover the island devastated by hurricanes, Congress was divided over how to help and questioned a suspicious energy deal during a hearing Tuesday for the Committee on Natural Resources.

Puerto Rico will never recover from the extensive damage of Hurricane Maria unless the federal government gives aid on an unprecedented scale, the head of the federal control board in charge of Puerto Rico’s finances told Congress people at the hearing.

“Without unprecedented levels of help from the United States government, the recovery we were planning for will fail,” said Natalie Jaresko, executive director of the Financial Oversight and Management Board for Puerto Rico.

The oversight board estimates it will need $21 billion just to restore basic functions of the government like employing police, firefighters and teachers. Today, 60 percent of people are still without power in Puerto Rico, and collapsed infrastructure like bridges and roads have yet to be restored.

“It is not a time just to put on patches, but to make permanent fixes looking toward the future,” said Angel Perez Otero, mayor of Guaynabo, Puerto Rico, at the hearing. “We can not move the island away from the Caribbean. So Congress and the administration must move to help our people.”

But those in congress disputed over how to make these permanent fixes and what the underlying problems actually are.

Some Republicans, as well as Jaresko and her fellow board-member, Noel Zamot, who also spoke to Congress, accused the Jones Act, a century-old shipping law, of exacerbating Puerto Rico’s fuel shortage.

Enacted in 1920, the Jones Act is designed to protect U.S. interests by requiring tankers transporting oil between U.S. ports to be American-made and manned by a crew of mostly U.S. citizens. Jaresko said this created an additional cost to the island, and she encouraged Congress to change or repeal the law.

“The Jones Act is a problem for Puerto Rico and I would like to find a solution,” said Rep. Doug Lamborn, R-Colo. “Congress should look at that. Everyone won’t be happy, but if we want to see Puerto Rico succeed and thrive, those are the kinds of hard decisions we have to be willing to make.”

The Trump administration temporarily waived the law in September, allowing any ship to bring supplies to Puerto Rico. Politicians and Puerto Rican officials are now calling for the law to be repealed or changed. But some argued during the hearing that this doesn’t address or solve Puerto Rico’s real issues.

“This entire thing is a farce,” said Rep. Garret Graves, R-La. “We can continue to sit here and makeup solutions in search of problems or focus on real solutions that are needed.”

Graves said only one vessel took advantage of the waiver, and that ship took more time to get supplies to Puerto Rico than Jones-Act compliant vessels.

He also added that fuel prices are 23 percent higher in Miami than they are in San Juan, addressing the concern about added fuel prices.

Other congressmen blamed the Trump administration’s slow response for the island’s lasting devastation.

Rep. Ruben Gallego, D-Ariz, pointed out how differently the government responded to the Haitian earthquake than it did with the hurricanes in Puerto Rico. In Haiti, Gallego said, the U.S. deployed military units overnight; whereas it took five days before the first federal official arrived in Puerto Rico after Hurricane Maria hit. Gallego added that 8,000 U.S. troops were present in Haiti within two days. Military support didn’t reach this level in Puerto Rico for more than ten days, Gallego said.

“All this notwithstanding the fact that hurricanes, unlike earthquakes, allow for a much greater advanced planning effort,” Gallego said. “We didn’t see that.”

But regardless of whether the problem stems from an antiquated law or the administration’s slow response, underlying the hearing was the question of Puerto Rico’s suspicious contract with a small Montana firm. Congress got little answers on this, though, since the Puerto Rican executive behind the deal cancelled his appearance last-minute.

Ricardo Ramos, executive director of Puerto Rico’s public power company known as Prepa, could not leave during such a “critical stage” of restoring electricity to Puerto Rico, said the chairman of Prepa. Ramos was expected to answer specific questions about the now-cancelled contract with a small Montana firm, Whitefish Energy Holdings.

“We had a witness who bailed on us last minute who could’ve been answering those Whitefish questions,” said Rep. Rob Bishop, R-Utah, the committee chairman, in a statement. The panel received thousands of pages of documents from Prepa that raised additional questions about the deal.

Prepa came under scrutiny after it granted Whitefish a $300 million contract to restore power in Puerto Rico. The little-known Montana energy firm only had two full-time employees at the time of the contract to do the work of thousands of people, and has connections to the secretary of the interior, Ryan Zinke, according to a New York Times report.

Puerto Rico’s governor cancelled the contract in October. But questions still remain over the circumstances and connections of the deal. And the majority of Puerto Ricans are still without power.

This is going to be a very painful and long recovery,” said Rep. Nydia Velazquez D-N.Y. “So people are leaving because they feel they have no other option…because there is no hope. And there will be no hope if we don’t have accountability. Whitefish was not discussed. I hope that you do your job and make sure that the taxpayers’ money is protected and that we use that money to rebuild Puerto Rico.”

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