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Probe stalled by Trump officials finds they created red tape for Puerto Rico relief funds

Syra Ortiz-Blanes
·5 min read

The Trump administration created bureaucratic hurdles that delayed Puerto Rico’s access to about $20 billion in hurricane disaster recovery and mitigation funds, says an inspector general’s report released Thursday that also concludes the federal government slowed down a probe into the matter.

The investigation was opened in March 2019 at the request of Congress and evaluated how U.S. Department of Housing and Urban Development policies and decisions affected the speed with which relief money was dispersed.

The federal report found that multiple administrative obstacles stalled the process of delivering aid—including a federal government shutdown, as well as moves by officials to add new layers of oversight and decisions to revise the grant requirements Puerto Rico had to meet.

Brian Montgomery, former deputy secretary to the housing agency, told investigators that there was widespread sentiment among senior officials that red tape had “unnecessarily delayed” efforts to hand over disaster relief funding to Puerto Rico.

The findings were released almost four years after Hurricanes Irma and Maria devastated Puerto Rico. Multiple local officials have said for years that the Trump administration’s policies towards the island harmed recovery efforts. President Joe Biden promised to accelerate Puerto Rico’s access to long-awaited disaster aid and his administration has freed up billions in aid.

In a statement, Gov. Pedro Pierluisi denounced the Department of Housing and Urban Development’s management of relief money for Puerto Rico under the previous administration.

“Clearly there were onerous and discriminatory restrictions on the funding appropriated by Congress to help Puerto Rico recover from recent natural disasters,” he said, adding that since becoming governor in January he had “established a great working relationship with the Biden Administration.”

HUD declined to comment, referring the Miami Herald to the report’s findings.

Releasing Maria relief for Puerto Rico a ‘priority,’ White House says

To produce the report, the inspector general’s office spoke to over 20 officials and reviewed electronic documents and communications.

However, access to people and records was “delayed or denied in several instances,” which ultimately “negatively affected” the investigation, the memo concludes. Former Housing and Urban Development Secretary Ben Carson was not interviewed for the investigation, refusing to speak without legal counsel present. The agency also demanded that other senior officials have a lawyer on hand while investigators collected testimony.

“Some of those same officials eventually agreed to be interviewed without agency counsel present in the interview room, but then refused to answer certain questions because they claimed the information was protected from disclosure,” the report reads.

The Office of Management and Budget, another key executive agency involved in the process, did not offer any direct information to investigators.

Several natural disasters have pummeled Puerto Rico since 2017. Hurricane Maria killed thousands and destroyed infrastructure. While still recovering, the southwest of the island was shaken by a series of earthquakes that began in December 2019, leaving many homeless or with damaged houses. Now, the American territory is facing a rapid rise in COVID-19 cases, hospitalizations, and deaths.

As disaster after disaster hit the island, former President Donald Trump and Carson expressed concern over possible corruption and mishandling of federal aid in the island’s government. Trump, who called Puerto Rico “one of the most corrupt places on earth” and bashed local politicians, touted that he was “the best thing that ever happened” to the U.S. territory.

The inspector general’s report describes a series of costly administrative hold-ups.

A government shutdown that began in December 2018 and continued into January of the next year put a pause on several processes. The Office of Management and Budget, or OMB, directed the housing agency to stop doing work for disaster grants during that time.

Budget office negotiations and revisions over regulations for disaster mitigation funds went on for months. The OMB also requested unprecedented oversight for a vital step in the process, a move that surprised housing officials because such a request had never been made before for disaster money.

The Department of Housing and Urban Development, or HUD, also altered a template for grant agreements, what officials viewed as an effort to improve the disaster recovery program. The report found evidence the changes were pushed because of concerns over oversight and risk management.

Former HUD general counsel Paul Compton “questioned whether the federal housing agency was ‘really going to provide billions of dollars’... as if it were disbursing ‘$300,000 for Omaha to build a new park,’” according to the memo.

The Biden administration has been working to reverse the Trump-era stance on the island’s access to emergency money, a process that a federal housing department official described to the Herald as a “resetting the relationship” between Puerto Rico and Washington.

On Monday, the agency announced Puerto Rico would receive over $8 billion in Hurricane Maria recovery money and have what a statement described as “onerous” restrictions removed over how it can access and spend a larger pool of financial aid.

Biden administration releases billions in relief for Puerto Rico, removes ‘onerous’ restrictions

“The actions taken by HUD today will unlock access to funds Puerto Rico needs to recover from past disasters and build resilience to future storms, while ensuring transparency and accountability,” said Marcia Fudge, current HUD secretary, in the statement announcing the development.

In February, the agency signed off on $1.3 billion in for Puerto Rico to reduce future risks. Trump-era restrictions on another $4.9 billion were loosened so the island could tap into them with ease. In March, the federal education department released nearly $1 billion in federal funds to assist the island’s schools in responding to recent emergencies, including the pandemic.

Puerto Rico Housing Secretary William Rodríguez said that the investigation substantiated years-long claims on the island that Washington has treated Puerto Rico unequally when it comes to recovery funds, but that things were moving in the right direction since President Joe Biden took office.

“The treatment has definitely changed,” Rodríguez said. “They have fulfilled that promise.”

The report can be found here:

Review of HUD’s Disbursement of Grant Funds Appropriated for Disaster Recovery and Mitigation Activities in... by Miami Herald on Scribd

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McClatchy DC reporter Alex Roarty contributed to this story.