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Dangling disaster relief funds, White House to require Puerto Rico to implement reforms

A string of powerful earthquakes and aftershocks originating in the south of the island continue to stun and rattle residents in early January. (Video: The Washington Post)

PONCE, Puerto Rico — The Trump administration plans to impose several new requirements on billions of dollars in aid for Puerto Rico, including a new restriction on the wages paid by the island’s government to contractors working on disaster relief, according to two officials with knowledge of the plan.

The White House has for months worked to enact new restrictions on about $8 billion in disaster mitigation aid Congress approved for the island, which was hit this month with recurring earthquakes just two years after Hurricane Maria devastated much of the U.S. territory.

Under the parameters the Trump administration is proposing, Puerto Rico’s government will have to agree to give new oversight authority to the island’s federally mandated Fiscal Control Board — an appointed, independent government body — to receive funding for certain federal projects, officials said. Puerto Rico also will have to agree to pay federal contractors working on disaster relief less than $15 an hour, despite a recent executive order mandating the rate.

Hit by devastating earthquakes, Puerto Rico still waiting on billions for hurricane relief

Puerto Rico’s government also will have to agree to create a new system for registering properties and deeds, a move aimed at curbing fraud in requests for federal reimbursement, according to the officials, who spoke on the condition of anonymity to discuss internal plans. A fourth requirement would mandate that none of the disaster mitigation funding go toward the island’s electrical grid, which is notoriously frail and has at times left residents without power for months.

The Department of Housing and Urban Development, which has been working with White House officials, is expected to tell the Puerto Rico government about the proposed restrictions this week, the officials said.

Puerto Rico has been rocked by multiple disasters in the past two years, beginning with Hurricane Maria in 2017 and followed by a political corruption crisis last year involving the arrests of top government officials and the eventual ouster of the island’s governor, Ricardo Rosselló. This month’s earthquakes, primarily affecting the southwest region of the island, have left entire communities fearful of living in their homes and have further exacerbated infrastructure problems that were never resolved after Maria.

Puerto Rico earthquake aftershocks again rattle coastline as residents deal with disaster after disaster

Puerto Rico’s central government estimated the earthquakes caused $110 million in damages to at least five different municipalities, but local mayors are confident that number will balloon, as there are continuing temblors and damage assessments are underway. Many communities are still waiting for money promised after Hurricane Maria, such as in Ponce, where the municipal government is hoping for funds for hundreds of sites needing reconstruction, including roads, storm water management systems and other public works projects. So far, three have received approval.

“The help comes, but it comes one drop at a time,” said Elizabeth Ocasio, deputy mayor of Ponce. “We needed to strengthen these structures after the hurricane. Now, we have greater damage.”

Congressional Democrats and Puerto Rico officials have denounced the Trump administration for stalling aid that could assist the island’s slow and difficult recovery. Rep. Raúl Grijalva (D-Ariz.), who chairs the committee that oversees U.S. territories, said the process is starting to move, but Puerto Rico faces a specific set of challenges as a cash-strapped island pressured under an austerity program.

“This has been a painful delaying tactic,” Grijalva said.

Trump and Republican lawmakers have seen the governor’s corruption scandal as vindication of their demands for more stringent oversight of the spending of federal funds on the island. The Trump administration is also aiming to curb how much of the funding could go to the electrical grid, believing that money for repairing it has already been wasted.

“President Trump is committed to helping the people of Puerto Rico while also ensuring that taxpayer dollars are not wasted. In a great win for Puerto Ricans and U.S. taxpayers, the administration has outlined reforms for the grant agreement to Puerto Rico in order to protect resources,” said Chase Jennings, a spokesman for the Office of Management and Budget.

The administration’s proposal to give more oversight authority to the fiscal board could prove the most politically explosive, as some congressional Democrats have attacked the body as undemocratic, given that Puerto Ricans are not allowed to choose its members. The board was created under the Obama administration to help manage the island’s debt crisis.

José B. Carrión III, chairman of the fiscal board, said in an interview that more authority “is not something we sought” but that the board is happy to help the federal government get more funding out the door.

“We are not looking at this as a power play,” Carrión said. “We want to do our part so the federal government feels comfortable, and the funds flow to the people of Puerto Rico who need them. We want to get away from Puerto Rico being a problem situation.”

Congress has approved $42 billion for the island’s recovery, but only a portion of that money has been allocated.

The $8.3 billion in disaster mitigation funding was approved by Congress to protect parts of the island prone to natural disasters, such as by building water pumps where flash flooding occurs, said Deepak Lamba-Nieves, research director at Puerto Rico’s Center for a New Economy.

Earlier this month, House Speaker Nancy Pelosi (D-Calif.) accused the Trump administration of illegally holding the money and called on the White House to “cease and desist.”

Some Puerto Ricans who have been highly critical of Trump’s handling of the island’s struggles said the new restrictions might be needed given the corruption that has been exposed among some of its officials.

“Everybody knows President Trump has severely criticized the people of Puerto Rico, and in some cases offended them,” said Ramón Luis Nieves, a former state senator on the island. But he noted that there are “legitimate concerns over corruption in the local government of Puerto Rico. It will take time for the Puerto Rico government to reestablish its credibility in front of the federal government.”

Stein reported from Washington.