Prepa CRO’s contract with Prepa to be investigated
SAN JUAN – Jorge “Georgie” Navarro, president of the incoming House Government Committee, announced Wednesday that a package of resolutions has been filed to find out who is responsible for the financial situation allegedly left by the previous administration.
Navarro assured that these are only the first of a series of legislative measures aimed at investigating what he called a series of “murky” transitions and “excessive spending” by the administration of former Gov. Alejandro García Padilla.
“Given the multiple irregularities of this outgoing government–questionable contracts, transactions of public funds–which were signaled out by the Transition Committee, we started to investigate what we believe are irregularities that cannot be left without those who caused the crisis we find ourselves in being singled out,” the legislator said.
The first measure submitted by Navarro is House Resolution 8, which orders the Government Committee to conduct a “thorough” investigation to determine the “adequacy [sic] and reasonableness” of the food per diem, salaries and gasoline reimbursements of Puerto Rico Electric Power Authority (Prepa) board members.
Another resolution filed by Navarro orders an investigation into the actions by AlixPartners International Inc. and Prepa Chief Restructuring Officer Lisa Donahue at the public electric utility since having been contracted in September 2014.
The resolution indicates that the scope of the public corporation’s contracts with Donahue and the consulting firms she recommended, as well as potential conflicts of interest with the law firms and advisers Prepa contracted as part of its fiscal restructuring plan, will be investigated.
“This new Prepa board is going to dictate its own salary. It has been said that between $75,000 and $90,000, like boards in the United States, and we believe that isn’t in tune with the reality Puerto Rico is living. Here, we will dig deeper in this investigation; if we have to lower it to $300 like it was before, or what [former governor] Luis Fortuño approved in 2011, who eliminated per diems for Prepa’s governing boards,” the government committee president said.
“The information we have received is there has been a pitcher and a catcher in the hirings made by the law firms and that the bondholders themselves, those who demanded that Prepa hire Donahue, has brought about questions…,” he added.
To questions from the press about whether the commission would have the power to cancel Donahue’s contract, Navarro assured that the possibility is part of what he intends to investigate with the presented resolution. It is also hoped that light is shed on alleged inconsistencies identified by the Transition Committee of the New Progressive Party (NPP) regarding the actual situation at the public corporation.
“Lisa Donahue’s exploits aren’t on par with what has been invested. That investment would have been made by anyone who had the knowledge at the local level. Money has been wasted. We see [Prepa’s] executive director, [Javier] Quintana, who doesn’t want to follow the public policy of the incoming governor and is part of the questioning we will conduct. If she [Donahue] was the superman [sic] of finance, of agreements with bondholders, why is there no agreement with all those bondholders today to finalize those agreements once and for all,” Navarro questioned while stressing he considers Donahue and AlixPartners’ role in Prepa a failure.
A third resolution, which hasn’t been numbered, was also submitted by the representative to order the presiding committee to investigate the process followed by the Health Department regarding the purchase of an air ambulance helicopter as well as the department’s debt with its suppliers, including the debt it has with companies that provide air transport services for patients.