Republican Senators Quietly Pushed Privatization of Puerto Rico’s Power Utility

Republican Senators Jeff Flake of Arizona and Mike Lee of Utah sought to keep secret their interest in the privatization of the Puerto Rico Electric Power Authority (PREPA), a government-owned corporation. Almost a month after Hurricane María destroyed the island’s energy grid, a representative of Sen. Flake began to send emails to Andrew Biggs, a conservative, pension expert who sits at Puerto Rico’s Fiscal Control Board (FCB), the federally appointed entity tasked with the island’s debt restructuring. “The Flake and Lee offices have quietly been kicking around the idea of legislation to implement the PREPA privatization that members of the [FCB] have advocated,” wrote Chuck Podolak, a former adviser to Sen. Flake, in an email sent to Biggs. “We’re pretty new to the PREPA game and were wondering if we could grab a few minutes for a phone call with you to get some background on what thinking has been done on how to do this [the privatization],” he continued. These communications with FCB members not only reveal the intention of both senators to secretly pull the strings of privatization from the federal sphere, but they also demonstrate the depth of the political subordination of the Puerto Rican territory before the U.S. They further show a lack of independence from the FCB, which is called to act by its own criteria.

Puerto Rico Fiscal Board Fights For Secrecy

Puerto Rico’s federally appointed Fiscal Board refused to deliver an unspecified number of communications between the entity and officials of Congress, the White House, Treasury and other federal agencies. As part of an access to information lawsuit brought by the Center of Investigative Journalism (CPI) a year and a half ago, the Board alleges that they are privileged documents and must remain confidential. In a two-page letter dated Nov. 21 and addressed to the CPI’s legal representation, Board lawyers, Proskauer Rose, argue that the disclosure of certain emails and related attachments would affect the island’s economy, capital markets, pending law enforcement investigations and “the ability to perform [the Board’s] statutory duties.”

The entity imposed by the U.S. government through a federal law known as PROMESA only mentions broad justifications and descriptions for the withheld documents, the amount of which remains unknown, as are the names of those who are part of the communications that remain outside the public domain. The CPI lawsuit against the entity aims to obtain access to communications between the seven-member fiscal panel and both federal and local government.

Emails Expose Federal Gov’t Influence Over Puerto Rico’s Fiscal Board

“Started engaging with the creditors yet?,” asked Ted McCann, then adviser to House Speaker Paul Ryan (R-Wisconsin), in a March 21, 2017, email sent to Carlos García, a member of Puerto Rico’s federally appointed Fiscal Control Board. Shortly after, García, a former president of the commonwealth’s Government Development Bank (GDB) and whose appointment to the board was pushed through Ryan’s office, replied:

“Yes, a lot of focus on GO/Cofina controversy. Each group stepping up their rhetoric. Board pressing on for meaningful progress. Challenge is the limited projected Primary surplus available in the first 10 years for debt service.

Broken island, costly bankruptcy

Puerto Rico’s bankruptcy has cost its people more than $225 million in a year, only in lawyers and financial consultants. The expense in restructuring professional services is projected to surpass $1.2 billion by 2023, including the budget of the island’s federally imposed Fiscal Control Board. I suggested to my editor lines such as these as possible leads for a series of stories over the billing in professional services as part of the Puerto Rico government’s bankruptcy process. I did not succeed. When talking about hundreds of millions of dollars, figures alone fall short in showing the magnitude of the matter.

Donald Trump: “The job that FEMA and law enforcement and everybody did, working along with the Governor in Puerto Rico, I think was tremendous. I think that Puerto Rico was an incredible, unsung success.”

Leaving aside the speculation and perceptions, there is overwhelming evidence, issued by federal agencies, that states that the U.S. government failed in its response to Hurricane María in Puerto Rico, even though it had plans in place to effectively tackle it and had even rehearsed for it, the Center for Investigative Journalism (CPI) found. Criticism to the Trump administration began only days after Maria’s eye made its way across the island, due to the slow response of federal agencies while on his Twitter account, the President downplayed the issue. During his visit to Puerto Rico and in all of his subsequent remarks, Trump praised the work of federal agencies, rebuking criticism of the political opposition, namely Democrats and the mayor of San Juan, Carmen Yulín Cruz. Almost a year after the storm and as a result of the preparations by the federal government for Hurricane Florence’s landfall in North Carolina, Trump once again commended the response of his administration on the Island. After meeting with senior officials of the Department of Homeland Security and the Federal Emergency Management Agency (FEMA), he insisted that the federal government did a tremendous job in Puerto Rico, describing it as an “unsung success” that was full of challenges.

The deaths of Hurricane María

Four hundred and eighty seven stories of extreme and inhuman suffering, each one with its own name, prove that many of the deaths caused by Hurricane María could have been avoided, while revealing the causes that led to this historic rise in mortality in Puerto Rico. The latter is evidenced by the only comprehensive record available of the deaths related to the hurricane, documented by a joint investigation of the Center for Investigative Journalism (CPI), Quartz (QZ) and Associated Press (AP). The existing list is that of the Government of Puerto Rico which still includes only 64 deaths. Meanwhile, U.S. President Donald Trump — who has downplayed the magnitude of the catastrophe since the beginning and glorified his response level — said on Thursday that the estimate of deaths validated by the government of Puerto Rico and produced by George Washington University (GWU) is yet another fabrication from Democrats to make him look bad. “3000 people did not die in the two hurricanes that hit Puerto Rico.