Washington D.C.- At times when FEMA has not reimbursed $ 227 million, the Electric Power Authority (PREPA) evaluates the implications of a federal report that warns that the government of Puerto Rico may lose access to the restitution of funds due to the lack of supervision over the contracts awarded to the companies Whitefish and Cobra Acquisitions.
“We are evaluating it. I don’t want to reach conclusions about what the impact would be, ”said Nelson Morales Rivera, PREPA’s director of finance, in an interview with El Nuevo Día.
The Office of the Inspector General (OIG) of the Homeland Security Department denounced, in a report, that both the government of Puerto Rco and the Federal Emergency Management Agency (FEMA) failed to supervise the repair contracts of the electrical network granted to Whitefish and Cobra Acquisitions, after the catastrophe caused by Hurricane Maria.
Criticizing the lack of oversight by PREPA, the Central Office for Recovery, Reconstruction and Resilience (COR3) and FEMA itself, the OIG refers primarily to unreasonable fees and changes in order that meant an increase in payments of hundreds of millions of dollars .
Both contracts have been marked by controversy.
Morales Rivera stressed that the report is addressed to FEMA, an office with which they would get “in touch to see what the next steps are.” “They (FEMA) must be evaluating (also) the report,” he added.
FEMA has not responded to a request for information.
The contract with Whitefish, the first awarded in the midst of the emergency, reached $ 300 million, but was canceled by the government of Puerto Rico amid complaints in the United States and on the Island about the rates charged by a small company. he had to outsource almost all of the staff.
Criticism of Whitefish included PREPA opting for that contract rather than securing the support of America’s public energy companies, which would have charged much less.
In its report, dated July 27, the OIG of ‘Homeland Security’ highlighted the high rates of the contract with Whitefish, which in the case of workers increased in just six days by 57%.
Whitefish came to bill PREPA $ 143.3 million, of which PREPA has paid $ 36.9 million. FEMA has not reimbursed a penny of that contract.
Cobra had contracts of up to $ 1.9 billion with PREPA from a FEMA official, according to charges filed against two employees of that federal office and the company’s former president, Donald Keith Ellison.
According to Morales Rivera, Cobra has invoiced $ 1,293 million, of which PREPA paid – until July 10-, $ 1,094 million. FEMA has reimbursed PREPA $ 904 million, for which it has not yet received $ 190.9 million.
“FEMA reimbursed more than $ 852 million to Cobra without first confirming that PREPA provided a high degree of supervision for the contract,” the OIG said in its report.
The OIG corroborated administrative flaws in the 15 specific projects assigned to Cobra that it examined, including 41 unauthorized order changes that represented a $ 391 million increase in costs.
Irregularities in the Cobra Acquisitions contracting process have come to court, where the company’s former president and former FEMA regional administrator Ahsha Nateef Tribble are charged with fraud and bribery, and other crimes. Another FEMA official, Jovanda Patterson, pleaded guilty in February to wire fraud and acts that affect a personal financial interest.
In June, Judge Laura Taylor Swain, in charge of the territorial bankruptcy process on Puerto Rico’s public debt, indicated that Cobra will have to wait at least another six months to receive any additional payment for its services.
The judge indicated that it will not be until December 2 that the Fiscal Oversight Board and PREPA will present a status report about the course of the criminal process against Ellison, Tribble and Patterson, and the independent analysis carried out by FEMA.