Puerto Rico Treasury to Reopen Competition for Advertising Contract After Transparency Concerns

Although it did not say when, the Puerto Rico Treasury Department told the San Juan Superior Court on Wednesday that it will launch a new competitive process to select the advertising agency for the department and the Lottery Bureau. Treasury cited that as one of the reasons for asking the court to dismiss a lawsuit filed by advertising agency Digimedia, which alleges that Treasury violated its right to due process by failing to notify the company that the contract had been awarded to another agency, even though Digimedia received the highest score from the evaluation committee.

Despite the information provided during yesterday’s virtual hearing before Judge Katarina Stipec Rubio, Treasury has not yet begun the new competitive procurement process for the new contract, Vilmar Trinta Negrón, director of Treasury’s Communications Office, confirmed to the Centro de Periodismo Investigativo (CPI).

Treasury attorney Carlos Sagardía Abreu said the contract at issue expired June 30. Treasury intended to renew it for another year for nearly double the original amount, but the Financial Oversight and Management Board approved it conditionally for a 90-day term through Sept. 30 and required Treasury to launch a new competitive process. Given that situation, Sagardía Abreu said Digimedia has no option but to compete in the new process for the department’s advertising contract.

“There is nothing left to adjudicate here,” Treasury argued in its motion to dismiss on mootness grounds. “The Financial Oversight and Management Board ordered, under PROMESA, that all future contracting for these services go through ‘a new fair competitive procurement process’ — a new, fair and competitive process — with a complete record and prior Board approval,” the government’s motion adds.

Digimedia attorney José Morales Boscio asked the court for 10 days to file an opposition to the motion to dismiss. After the hearing, Morales Boscio said on the program Primera Pregunta “that there was, in fact, a hand at work manipulating and rigging the process,” but acknowledged that he has no evidence pointing to improper pressure from La Fortaleza, the governor’s official residence and office, to favor 29 de Febrero, the advertising agency that received the contract.

Sagardía Abreu told the court that the decision to favor 29 de Febrero was supported by an executive order signed in 2021 by former Gov. Pedro Pierluisi. The order requires that, before awarding a professional services contract worth $250,000 or more, the government publish a notice of need for services, but, according to Sagardía Abreu, it gives the secretary discretion in selecting the contractor.

In January, Treasury filed another motion to dismiss, essentially arguing that it was not required to send the advertising agencies that submitted proposals any notice of the contract award because the process was different from a formal bidding process. At the time, the San Juan Superior Court denied the motion to dismiss, finding that Treasury was required to formally notify Digimedia of the contract award. That dispute went to the Court of Appeals and remains pending.

During yesterday’s hearing, Judge Stipec Rubio admonished and warned Sagardía Abreu because, on three occasions in his motions, he had made “incorrect representations” about the court record — that is, he referred to entries or events that do not appear that way in the judicial record. Strategia Legale LLC, the professional firm with which Sagardía Abreu is affiliated, charges Treasury between $100 and $125 an hour for its services. From March 2025 through July 2026, the firm’s contracts with Treasury totaled nearly $260,000.

Digimedia sued after Treasury declined to renew its contract following several years as the department’s advertising agency and instead awarded the contract to 29 de Febrero, which ran Gov. Jenniffer González’s election campaign. Treasury Secretary Ángel Pantoja Rodríguez signed the contract with 29 de Febrero even though it had been the lowest-rated company among the three that reached the final stage of the advertising proposal evaluation. Digimedia received the committee’s highest score.

A CPI investigation revealed last September that Treasury had Digimedia set up and coordinate parties, breakfasts and lunches, as well as manage purchases of promotional materials for the Lottery Bureau — materials that were later customized and distributed as gifts among the bureau’s own employees. Digimedia charged 15% in commissions and fees for these services, even though Treasury has the authority to handle those purchases and events itself, thereby avoiding unnecessary expenses. Digimedia’s contracts exceeded $47 million between 2019 and 2025.

Likewise, some of the officials who served on the evaluation committee that initially favored Digimedia — including the Lottery Bureau’s current Deputy Secretary, Heidi Hernández Olivo — were in charge of running the Lottery Bureau and were the ones who signed and approved invoices for breakfasts, lunches, gifts and activities benefiting the employees themselves.

In the same communication ordering that the contract term be shortened, the Financial Oversight and Management Board said the selection of 29 de Febrero “raises serious transparency concerns.” It said the notice-of-need record contains no documentation supporting the secretary’s decision to disregard his committee’s recommendation, nor was such documentation provided to the Board even though it had requested it. The Board also warned that the manual Treasury used to award the advertising contract was substantially modified on the same day the request for proposals was issued and that the federal entity was not consulted about those changes. Nevertheless, the Board’s letter does not address any of the issues the CPI reported since last year.

During Wednesday’s initial scheduling conference, the parties agreed on a case management plan indicating that the Treasury secretary will be deposed. Treasury’s attorney said he would limit the scope of Digimedia’s attorneys’ questions during the deposition, arguing that the secretary is protected by certain “privileges” covering discussions of “deliberative” matters.

The Aug. 17 case management report stated that, in addition to the secretary, members of the Treasury Department’s Evaluation Committee would be witnesses in the lawsuit. It also listed “Treasury Department official(s) in charge of the process (communications/purchasing),” a role held at the time by Vilmar Trinta Negrón.

In addition to Pantoja, the report signed by both parties and submitted to the court lists Trinta Negrón and Hernández Olivo among the people who could be deposed or called to testify. It also names Evaluation Committee members Iris Ríos Rivera, Carlos Calderón Ayala, Johana Rohena Quiñonez, Jayson Torres and Josué Cardona Hernández. José Chaves, Sebastián Negrón Reichard, Norberto Almodóvar Vélez, Lissette Rodríguez Tomasini and María Isabel Rodríguez are also on the list.

At the hearing, Sagardía Abreu said a former official who has an Independent Special Prosecutor (FEI, in Spanish) assigned to investigate him will also be deposed. He did not identify the former official.

Independent Special Prosecutors are investigating both former Chief of Staff Francisco Dómenech and former Office of Permit Management (OGPe) Deputy Secretary Norberto Almodóvar Vélez. Both are connected to this case. Almodóvar Vélez allegedly intervened at OGPe to prevent Digimedia from obtaining an advertising contract with that agency as well and favor JJ Investment, according to an internal Department of Economic Development and Commerce investigation that included testimony from public officials. Dómenech has been accused of improperly intervening in the controversy by allegedly trying to stop disciplinary measures and referrals against OGPe officials accused of favoring JJ Investment in the competitive process.

The controversy led to the resignation of then-Secretary of Economic Development and Commerce Sebastián Negrón Reichard.

In October 2025, Treasury signed an $8,580,000 contract with 29 de Febrero and amended it three months later to add $146,612. According to the Board, in March 2026, Treasury requested another amendment adding $3,157,604, bringing the total to $11,884,216. Because the amount exceeded $10,000, the Board must review the contract under PROMESA. Although the Board began its review, it halted the process when Digimedia filed its lawsuit. In mid-June, the Office of Management and Budget submitted a new contract to the Board for review and approval. The contract would have a one-year term, with a maximum payment of $14,891. That contract is in effect and is the one the Board conditionally approved, but it has not been filed in the Registry of Contracts of the Office of the Comptroller of Puerto Rico.

This translation was generated with the assistance of AI and reviewed by our editorial team to ensure accuracy and clarity.