Mastercard strengthens presence in the Caribbean

(Michal Jarmoluk/Pixabay)

Opens new office in Puerto Rico

SAN JUAN — The general manager of Mastercard in Puerto Rico, José Vargas, announced the opening of the company’s first office on the island, at the Chardón Tower in San Juan.

With this new location, the company seeks to expand the use of electronic payment methods in Puerto Rico. Its credit and debit card market share is of about 20% on the island, according to company data.

“For a long time, customers asked us that they wanted to see us more and have local services. Thanks to that customer demand, in addition to our strategy, which we were working on since 2018, we were able to start making local contracts in several sales areas, business, product and merchandise development. Each of these functions will have a person in charge. We are still evaluating how many more people we can add in the future, depending on market demand,” Vargas said.

“These functions will always continue to have the support we have in Miami and from different global teams in the company. Before the end of the month, we hope to have filled all the positions for the Puerto Rico office,” he added.

However, as a matter of policy, Mastercard did not offer data on the investment required for the new office.

Meanwhile, Mastercard’s communications director, Marcus Carmo, also indicated that a “customer delivery” area will be available by year’s end. This service is dedicated to the delivery of projects they do with clients such as banks.

The main objective of Mastercard is to bring new technologies to the island to allow users to have a secure experience in physical and digital commerce.

Through Mastercard’s own solutions or the companies it has acquired, the company can provide solutions to its business partners. Among those offered is tokenization with its Mastercard Digital Enablement Service (MDES) solution, which is a set of “on-behalf services” (OBS) that manage, generate and provide digital payment credentials on mobile devices to allow simple and secure digital payment experiences by substituting sensitive data with a non-sensitive equivalent, or a token, that has no exploitable value.

Similarly, the company seeks to improve the real-time experience in “person-to-person” (P2P), “person-to-merchant” (P2M), “business-to-business” (B2B) payments, among others.

In addition, the company provides a variety of value-added services, including consulting and data analysis to address business problems, through the “Mastercard Advisors” program.

“We have recently seen many positive economic indicators such as unemployment that has come down and new investments as part of the recovery after hurricanes. All these things are crossing at the same time so that now is the ideal time to have that local presence,” Vargas noted.

In 2018, Mastercard established an office in the Dominican Republic and confirmed that its third office in the Caribbean is scheduled to open in October, in Kingston, Jamaica.

“The opening of the office of Puerto Rico, the second in the Caribbean in less than a year, is a great leap in our regional expansion strategy. In the coming years, we hope to continue expanding our presence constantly. This strategic corporate approach provides a greater relevance for the Caribbean region, while giving the business team greater local decision-making power in areas such as market investment and expansion of operations,” Vargas pointed out.

On the other hand, the company will expand and study users on the island more closely to offer more data to customers.

The Digital Evolution Index, a study produced as a partnership between Mastercard and the Fletcher School at Tufts University, did not include Puerto Rico. However, Marcus said that from now on, after the establishment of this office in Puerto Rico, the island will be part of the analysis of how prepared it is in technology in general, market penetration, cellphone use, and other metrics.

Mastercard’s payments processing network connects 50 billion businesses with 40,000 financial institutions in more than 210 countries and territories. With 2.5 billion debit, credit, pre-paid card accounts, among others, the company processed 56 billion transactions a year.

Puerto Rico publishes list of qualified commercial activities for Opportunity Zones

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Over $600 million in investments expected

SAN JUAN – Puerto Rico’s Opportunity Zones Priority Projects Committee has released the list of qualified commercial activities under the federal legislation that provides tax benefits for investing in low-income communities. Ninety-seven percent of the island was designated an Opportunity Zone.

Puerto Rico Chief Financial Officer Omar Marrero, who chairs the committee, said in a press release by the Fiscal Agency and Financial Advisory Authority that the list “is an important step towards facilitating this investment mechanism and reinforcing the efforts aimed at furthering the economic development of the Island.”

Marrero explained that the list will be in effect for at least one year; however, “it could be amended to include a new list of commercial activities or geographical areas, taking into account the needs for a commercial activity in Puerto Rico or of a geographical area, and the economic impact of awarding decrees in the region.”

Economic Development Secretary Manuel Laboy adds in the release that the Opportunity Zones initiative, which now forms part of the Puerto Rico Incentives Code, “is a positive step towards improving Puerto Rico’s economy in a holistic way. It represents an opportunity to promote the development of several economic sectors throughout 98 percent of the Island, which will allow the most vulnerable zones to have a more just and favorable economic situation. Laboy Rivera pointed out that the positive impact of Opportunity Zones is calculated at more than $600 million in investments.”

The Incentives Code of Puerto Rico provides for the following incentives to opportunity funds that invest in Puerto Rico:

• A fixed 18.5% income tax rate and 0% on eligible distributions to its owners

• A transferable investment credit of up to 25% of the amount invested on an Opportunity Fund

• 25% exemption on real and personal property taxes (which may be increased to 75%)

• 25% municipal license and municipal construction tax exemption (which may be increased to 75%)

• An expedited permits process

The list of activities that qualify as priority projects within Opportunity Zones follow:

1.      Development (acquisition of property and construction thereon and/or substantial improvement of existing property) of residential real property that is a Low-Income Housing Project as defined in Section 42(g) of the United States Internal Revenue Code of 1986, amended, or by the Puerto Rico Department of Housing, for sale or rent.

2.      Development (acquisition of property and construction thereon and/or substantial improvement of existing property) of residential and/or commercial real property for sale or rent.

3.      Development (acquisition of property and construction thereon and/or substantial improvement of existing property) of industrial real property for sale or rent.

4.      Substantial improvement of an existing commercial property for sale or rent.

“We must now meet with the mayors to explain to them the scope of the local Opportunity Zones legislation. The mayors will then be able to establish, through municipal ordinances, additional tax exemptions at the municipal level for the commercial activities that they wish to promote in their municipalities as they will be informed of the whole the process,” the release quotes Rep. Antonio “Tony” Soto as saying.

To access the resolution for the development of priority projects, pursuant to Act 60 of 2019, visit

Puerto Rico Economic Development Secretary in Washington to seek support

Economic Development Secretary Manuel Laboy (CyberNews)

Looks to strengthen manufacturing alliances, meet with Treasury, Transportation officials

SAN JUAN – The secretary of Puerto Rico’s Department of Economic Development and Commerce (DDEC by its Spanish acronym), Manuel Laboy Rivera, traveled to Washington, D.C., on Tuesday, to hold meetings with federal officials, as well as to take part in a conference, where he will share with representatives of other U.S. jurisdictions the achievements and lessons learned in Puerto Rico during the past year .

Laboy is attending the Policy Academy on Strengthening Your State’s Manufacturers, a National Institute of Standards and Technology Manufacturing Extension Partnership (MEP) program organized by the State Science and Technology Institute and the Center for Regional Economic Competitiveness.

“During my participation in this MEP event, I will highlight the current efforts to give new impetus to local businesses, focused on developing an entrepreneurial culture and creating a technology transfer program to strengthen the production of new knowledge in universities, such as what the Science and Technology Trust develops. Puerto Rico has solid engineering programs as a basis for introducing more innovative techniques in existing companies, as well as newly created ones, and it is important to make these efforts known,” Laboy Rivera said in a statement.

The official explained that one of the results of the island’s participation in the Academy is that it has increased support through manufacturing ecosystems “and it is expected to grow even more.” Another benefit has been communication with representatives of other participating jurisdictions and their willingness to collaborate.

Laboy also said that during his stay in Washington, he will meet with Transportation Department officials to follow up on a request made in June, to provide Puerto Rico an exemption for the transfer of international cargo to the United States, to combine domestic and international cargo, as was given to Guam, the Mariana Islands and Alaska.

“I will follow up the request, clarify doubts, provide more information if necessary and see where we are on the matter. We believe we have a great opportunity and a very solid case, discussed and supported by the Fiscal Control Board, to foster economic growth. There is already precedent with two territories and one state,” he added.

If approved, the exemption would allow the airports of Carolina, Aguadilla and Ponce to transfer more international air cargo and passengers, increasing international trade, transportation and tourism, the secretary’s release said.

He faces some resistance from the Air Line Pilots Association International (ALPA) regarding Puerto Rico’s request for extraordinary exemption relief. ALPA reportedly says the request is opposed by several labor organizations and carriers, the Centre for Aviation (CAPA) reports, adding that ALPA said Puerto Rico‘s best opportunity for regaining its former hub status is by improving its attractiveness to carriers that can provide international and domestic service, rather than catering to foreign carriers.

“Additionally, ALPA stated Puerto Rico‘s request for flexibility already exists under open skies, adding it believes Puerto Rico‘s application is the first step in a campaign to obtain cabotage relief for foreign carrier hub operations at San Juan. ALPA urges the [Transportation Department] to deny Puerto Rico‘s request for exemption authority,” CAPA reports.

Finally, the official indicated that he will meet with Treasury officials to discuss the federal tax reform and its impact on the island. The release adds that he will promote the investment benefits of the Opportunity Zones program in Puerto Rico.

—CyberNews contributed to this report.

Puerto Rico Recovery Office demands sworn declaration from contractors

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Must certify not having received any benefits and no cronyism, conflicts of interest exist

SAN JUAN — The new executive director of the Central Office of Recovery, Reconstruction and Resiliency (COR3), Ottmar Chávez, announced that every contractor and subcontractor must sign a mandatory affidavit to offer services to the office.

COR3 is a division of the Public-Private Partnerships Authority. It works hand in hand with the federal government, to “ensure that the Government of Puerto Rico successfully undertakes reconstruction efforts with efficiency, effectiveness, and transparency, while capitalizing on opportunities to build back in a way that makes Puerto Rico better, stronger, and more resilient,” the entity’s mission statement reads.

“We have begun to send an affidavit to all contractors and subcontractors, which must go with the contract that all professionals offering services to COR3 have to sign. What we seek most is to ensure that the Government of Puerto Rico efficiently and effectively implements recovery and reconstruction efforts, and at the same time capitalizes on the opportunities to rebuild a better, stronger and more resilient Puerto Rico,” the executive director said in a press release issued by his office.

Chávez explained that the affidavit certifies that no gifts or money were received before the granting of the contract and that prior to formalizing the contract no such benefits were negotiated either.

The interests of the contractor “represent COR3 and cannot be lent to do favors to family members of any official or public employee of COR3,” the official said, adding that contractors will have to assure they will not represent an opposing party, nor make payments to any contractor or government employee to keep the contract in force.

In addition, the document makes it clear contractors and subcontractors certify by signing that they will avoid any conflict of interest or the appearance of a conflict of interest and that they have not been involved in any guilty plea amid any charges.

“Recovery work continues. Transforming the Island with a vision towards the future by implementing cost-effective solutions using innovative ideas, best practices and revitalizing economic development is one of our objectives. We are focused on working to strengthen and enhance the ability of Puerto Rico to resist and recover from future disasters with responsibility, in a clear and transparent manner,” Chávez added.

New Puerto Rico gov discusses transparency with Trump administration

The White House is seen from Pennsylvania Avenue in Washington, D.C. (CB photo)

Speaks with officials from the White House Office of Intergovernmental Affairs

SAN JUAN — Puerto Rico Gov. Wanda Vázquez spoke for the first time Thursday with members of the Trump administration. The conference call included Doug Hoelscher, director of the White House Office of Intergovernmental Affairs (IGA), to whom she requested a meeting with the president as soon as possible.

In a statement issued by Vázquez’s office, La Fortaleza, the governor, Puerto Rico Federal Affairs Administration (PRFAA) Executive Director Jennifer Storipan and Public Policy Secretary Philippe Mesa said they spoke with Hoelscher about “reestablishing credibility and transparency.”

Meanwhile, in her first interview with WIPR Channel 6, Vázquez said that on Thursday she spoke with private sector leaders, who told her that they would travel with her to Washington, D.C., when the “trip is coordinated.”

“All the mayors want to go and it makes me very happy because that means that we will have one voice,” Vázquez told Channel 6. “The private the sector, the mayors and others will all travel together to Washington and we hope that it will be during the first week of September when the congressional session begins.”

She said that during the call with Hoelscher the meeting with Trump was requested to clarify to the president that “Puerto Rico is not the image that has been presented to him.”

“In the process of reestablishing credibility, it’s of utmost importance to open channels of communication and reaffirm this administration’s commitment to Puerto Rico, to achieve this goal,” Vázquez assured. “I am grateful to Mr. Hoelscher and his team for the interest they have shown in our island.”

IGA’s Nic Pottebaum and Dan Horning also participated in the call with the governor, which was requested by the IGA through the PRFAA, according to the La Fortaleza release, which added that “satisfaction with the availability and openness shown by the first executive and expressed interest in meeting” in Washington.

“I am fully ready and willing to collaborate with President Donald Trump and his administration in matters that affect the island and its 3.2 million U.S. citizens,” Vázquez added. “I have had the opportunity to meet with our resident commissioner, Jenniffer González, on several occasions and we have an excellent working relationship, in which we both have as our north to achieve the best for Puerto Rico.”

Vázquez said she requested to meet with Trump as soon as possible to speak about issues of importance for Puerto Rico, such as disaster recovery and Medicaid funds assigned to the island.

“While it is true that the federal government has been an integral part in the recovery of Puerto Rico, there is still a long way to go. I trust that with this openness that the White House has shown, we can continue working together in the reconstruction of the Island,” Vázquez added.

Puerto Rico Top Level Domain celebrates 30th anniversary

To hold Domain Name System Week Aug. 20-23

SAN JUAN — As part of its 30th anniversary on the island, the Puerto Rico Top Level Domain (PRTLD) organization will celebrate Domain Name System Week (DNS Week) at the Hyatt Place San Juan Aug. 20-23.

DNS Week events are organized by the Latin American and Caribbean Country Top Level Domain (LACTLD) organization and the PRTLD. Each event will address different topics related to the Domain Name System (DNS) and the operation and management of the ccTLDs (country code Top Level Domains), with a focus on the Caribbean region.

The vice president of PRTLD, Pablo Rodríguez, told Caribbean Business that “the event will feature both closed and open sessions to the public, aimed at operators of country codes in the Caribbean” that do not currently participate in the regional forums “where all operators meet.”

“We invited all Caribbean ccTLD administrators to discuss problems in the region and seek joint solutions,” LACTLD General Manager Miguel Ignacio Estrada wrote in an editorial.

Rodríguez explained that in addition to the anniversary celebration, PRTLD will hold the event “so everyone learns about the organization that groups the operators of the country codes of Central and South America as well as the Caribbean so they can benefit and express their concerns, interests and can take them to the highest forums in the world” such as the Internet Corporation for Assigned Names and Numbers (ICANN), the worldwide nonprofit organization dedicated to maintaining the safe management of the internet, as well as its interoperability, through the development of policies on the internet’s unique identifiers through the coordination of the internet’s domain name system (DNS).

Among the activities for DNS Week, is the LACTLD Workshop on Aug. 20-21 from 9 a.m. to 6 p.m. Although the two-day workshop will be closed for ccTLDs and sponsors, it will address relevant topics for ccTLDs’ operation and management.

One of the activities open to the public will be training on the IPv6 communications protocol, which provides an identification and location system for computers and routes traffic across the internet.

This session will be held Aug. 20-21 from 9 a.m. to 6 p.m. and will consist of an IPv6 training hosted by PRTLD and the Internet Society of Puerto Rico (ISOC-PR) and featuring Alejandro Acosta from LACNIC as guest trainer. The first day will feature a theoretical approach of the IPv6 Protocol and the second will consist of a “Hands-On” workshop.

Meanwhile, on Aug. 20, PRTLD will hold its invitation-only anniversary celebration at La Casita de Rones in Old San Juan.

Prominent among the week’s events is the LAC DNS Forum for industry, internet policy and technical professionals interested in debating DNS-related issues with a focus on the Latin America and the Caribbean region.

The forum featuring the participation of regional organizations and speakers will also provide an opportunity for regional stakeholders to engage and network with global key players and experts in the field. The forum is open to anyone interested in issues related to the domain name industry and its potential business opportunities.

The annual LAC DNS Forum was first held in 2013 and is jointly organized by LACTLD, the Latin American and Caribbean Address Registry (LACNIC), the Internet Society (ISOC), the Public Interest Registry (PIR), and ICANN.

Visit to register.

On the last day of DNS Week, Aug. 23, a remote and closed online training will be conducted from 9 a.m. to 1 p.m. for LAC Registries and Registrars for ICANN regional Top Level Domains registries. For more details about DNS Week, visit

Expected attendance for the events has already surpassed projections.

“We had room for 50 people and we blew past that, twice. There is an incredible interest in the community, students and academics; there is hunger to learn about this kind of thing,” Rodríguez said.

In addition to being the only organization authorized worldwide to administer the “.pr” country code to represent Puerto Rico and its users online, PRTLD works with ICANN to maintain a stable, secure and interoperable network configuration to promote competition and the development of policies for these unique identifiers.

Rodríguez emphasized that part of PRTLD’s purpose is to provide entrepreneurs their identity on the internet so they work directly with each merchant to provide a low-cost or even free name for their domains with the “.pr” extension.

The executive urged citizens to consider acquiring their identity under the “.pr” code because, based on experience, “.com” domains are so numerous that losing the name that identifies the user or company throughout the internet could be at risk of being lost.

The PRTLD is a regional pioneer, with an established online presence totaling some 10,000 registered domains.

Union leader urges review of Puerto Rico power utility call-center contract

Utier President Ángel Figueroa Jaramillo (CB photo/Agustín Criollo Oquera)

Says new governor needs to look into conduct at public corporation

SAN JUAN — The president of the Irrigation & Electrical Workers Union (Utier by its Spanish acronym), Ángel Figueroa, was calling Tuesday for the review of a contract being worked on by the Puerto Rico Electric Power Authority (Prepa) for a customer service call center.

“Now the governor [Wanda Vázquez] has to show more interest on contracts such as the one for customer service over the phone that costs $5.8 million when the proposals we have made cost $2.9 million. It’s not a $100 difference,” Figueroa said in an interview with WKAQ radio.

His remarks come after Prepa Executive Director José Ortiz said Monday that the contract with the Canada-based consulting firm Stantec was no longer necessary after Vázquez put a halt to its signing. The $450,000 was part of the restoration and reconstruction and strengthening of the electrical system of the island rebuilding of the island’s energy grid after it was nearly destroyed by Hurricane Maria in September 2017.

The contract would have been managed by the director of Prepa’s Emergency Management Office, Arturo Deliz, who is responsible for requests for reimbursement to the Federal Emergency Management Agency (FEMA), along with a consultant of the public corporation, José Pérez Canabal.

The idea was to work on FEMA reimbursements through the latter instead of through the Central Office of Recovery, Reconstruction and Resiliency (COR3).

“It is interesting that in less than 24 hours, [Vázquez] was able to solve a problem that was going to cost the country $450,000. [Ortiz] ran scared because she questioned him. It’s not only the contract, it’s the people who coincidentally are in the contract,” the union leader said.

“Like this contract, other contracts have to be questioned the same way that was done with this one. If it had not been made public and the governor acknowledged that credibility and contracting left and right were put into public discussion, that José Ortiz who, together with his consultant José Pérez Canabal, this contract would not have been stopped,” Utier’s president said.

Figueroa also claimed that former Gov. Ricardo Rosselló Nevares did not pay attention “to this type of behavior.”

Ortiz had said Sunday that the contract was important, but after meeting with Vázquez on Monday, said the deal had been canceled because FEMA had just agreed to provide “$108 million needed to pay contractors who had been waiting for the money since February,” the Associated Press reported.

Fiscal board wants to review $80 million worth of contracts Rosselló awarded before resigning

Natalie Jaresko, the executive director of Puerto Rico’s Financial Oversight and Management Board (CyberNews)

Requests government CFO submit copy of over 200 agreements

SAN JUAN – The executive director of Puerto Rico’s Financial Oversight and Management Board, Natalie Jaresko, revealed Monday that she had requested the government’s CFO, Omar Marrero, to give her copies and information about the more than 200 contracts former Gov. Ricardo Rosselló “executed or approved,” with a combined value of about $80 million, in the two weeks before his resignation Aug. 2.

Some of the contracts do not yet appear on the Comptroller’s Office website.

“As you know, the Oversight Board established a contract review policy pursuant to Section 204(b)(2) of PROMESA [Puerto Rico Oversight, Management, and Economic Stability Act] to require Oversight Board approval of certain contracts to assure that they ‘promote market competition’ and ‘are not inconsistent with the approved fiscal plan’ (the ‘Policy’). All government contracts and amendments thereto with an aggregate value of $10 million or more are subject to Oversight Board approval. Moreover, the Oversight Board in its discretion may review any contract below such threshold,” the letter reads.

“In accordance with the Policy, we hereby request that the Government of Puerto Rico provide copies of all contracts executed by any government entity designated as a covered instrumentality by the Oversight Board (other than municipalities) during the Governor Rosselló’s last two weeks in office. We ask that such contracts be submitted to the Oversight Board not later than August 16, 2019. Contracts that were already approved by the Oversight Board need not be resubmitted,” Jaresko adds.

The letter concludes with a reminder that the board may issue subpoenas and “exercise any other powers granted to it” under Promesa “to effectuate the Policy.”

See the full text of the letter here:

Newly sworn Puerto Rico gov meets with top lawmakers

Gov. Wanda Vázquez and Resident Commissioner Jenniffer González (Courtesy)

Resident commissioner says matter of legislative leaders’ hope she be placed in gubernatorial succession line was not brought up

SAN JUAN — Newly sworn Puerto Rico Gov. Wanda Vázquez’s first meetings Thursday with the Senate president, House speaker and the island’s representative in the U.S. Congress, after the lawmakers had convened with numerous other New Progressive Party (NPP) colleagues and mayors for about four and a half hours, did not yield new insight into their openly expressed desire to have the resident commissioner placed in line for the governor’s office. 

While Senate President Thomas Rivera Schatz and Speaker Carlos “Johnny” Méndez gave no statements when arriving or departing from the meeting at the governor’s mansion, La Fortaleza, Resident Commissioner Jenniffer González assured before entering and after the meeting that the major concern was addressing the administrative problems in Puerto Rico’s government that have led the federal government to withhold disaster-recovery aid and other federal allocations such as Medicaid funding for the island. 

House Speaker Carlos Méndez, Gov. Wanda Vázquez and Senate President Thomas Rivera Schatz (Courtesy)

“She is the governor,” González said, “but we also have a reality and there are some great challenges that Puerto Rico has that need to be addressed and those are issues that should not wait three, four, five, six months. Here we have a lot of economic issues, fiscal issues, matters with the economy, recovery matters and federal funds.”

Earlier Thursday, the congresswoman received broad vocal support, during the large meeting held at the Capitol, from party politicians hoping she is nominated secretary of State as a stepping stone into the governor’s office. González expressed being available for the position, saying she has the skills to fix the administrative problems at the root of the island’s fading credibility in Washington, but that she was not going to request the position because, as resident commissioner, she already represents the island.

When Vázquez had expressed a couple of weeks ago she was not interested in becoming governor, González called her to say she was available after the legislative leaders asked if she would be interested in assuming the post. 

Asked if in the event she were nominated as secretary of State, her vacancy in Congress, however brief, would represent a continuity problem, González replied that “it’s the other way around. First, because there is already precedent for that,” and that she knows “the congressional side of it; the part where we have the main problem is not in the legislative part it’s in the administrative part, it’s in the work of the government of Puerto Rico.”

When leaving La Fortaleza, the resident commissioner said Vázquez hadn’t brought up the matter of the secretary of State vacancy and that she hadn’t either. 

Although the González didn’t divulge the details of the 50-minute meeting, the resident commissioner did make the distinction that it was Vázquez who asked for the meetings with her and the legislative leadership, which contrasted with Pedro Pierluisi, who never reached out to her during his few days as governor. Pierluisi was sworn-in as last Friday after Ricardo Rosselló resigned but was ordered to step down Wednesday by Puerto Rico’s Supreme Court, which declared his takeover unconstitutional.

Oversight board issues RFP to probe accounting firm BDO Puerto Rico

(CB file)

Seeks to determine whether ‘integrity of services was affected by alleged fraud’

SAN JUAN – The Financial Oversight and Management Board for Puerto Rico announced Thursday that it issued a request for proposals (RFP) for conducting a “financial examination of audit, accounting and other services” performed by BDO Puerto Rico since 2016.

BDO Puerto Rico held more than 95 contracts, “subject to over 100 amendments,” with the island’s government and its instrumentalities during that period, the board said.

The purpose of the investigation, the board said, is to “determine whether the integrity of any of the services provided by BDO was affected by alleged fraudulent activities of the firm’s former managing partner,” who was recently charged by federal authorities.

The chair of the U.S. House Committee on Natural Resources, Raúl Grijalva (D-Ariz.) and Rep. Nydia Velázquez (D-N.Y.) sent a previously unreported letter to Natalie Jaresko, the executive director of the Puerto Rico Financial Oversight and Management Board (FOMB), on Aug. 2, urging the panel to investigate BDO Puerto Rico. The letter is in relation to BDO Puerto Rico managing partner Fernando Scherrer having been indicted for wire fraud, conspiracy and money laundering.

In addition to providing financial services for the Puerto Rico government—including the departments of Health, Education and Treasury—BDO Puerto Rico provides monthly financial reports for the Puerto Rico Electric Power Agency (Prepa), which is undergoing a bankruptcy-like process in a venue known as a Title III court under the terms of the Puerto Rico Oversight, Management and Economic Stability Act (Promesa).

Grijalva and Velázquez wrote that BDO Puerto Rico’s services to the public power corporation “are critical to the accurate representation of PREPA’s financial position, which underlies the representations made to the FOMB, bidders in PREPA’s privatization process, as well as representations to the Title III court regarding PREPA’s bankruptcy and debt restructuring.” The Title III deliberations they note, “are currently at a highly sensitive stage,” underscoring the urgency of a thorough investigation of BDO Puerto Rico’s work on PREPA’s behalf.

In addition to Scherrer, an ongoing FBI probe of corruption in Puerto Rican government contracting has already resulted in the arrests of Alberto Velázquez-Piñol, a BDO contractor; former Education Secretary Julia Keleher; former Puerto Rico Health Insurance Administration head Ángela Ávila; and education contractors Glenda Ponce and Mayra Ponce.

Referencing the recent report that BDO Puerto Rico “may be shredding documents” following their request for an investigation into the firm’s audits and work, Grijalva said: “The Puerto Rican people are tired of corruption, tired of being taken advantage of, and tired of wrongdoing going unpunished. If BDO Puerto Rico is shredding documents, it doesn’t matter at this point if it’s part of a routine schedule. It must stop now. This is a very precarious moment for the credibility of the island’s government and major institutions. The priority now has to be transparency and integrity.”

The fiscal board clarified Thursday that the focus of the investigation is financial; thus, “legal actions or remedies are not within the scope of the investigation and are the responsibility of law enforcement” authorities.

“Complete visibility, and accountability for public funds are essential for good governance. The people of Puerto Rico have a right to know that services were provided in accordance with contracts,” the board’s executive director, Natalie Jaresko, said in the announcing press release. “If the services required to be provided by BDO Puerto Rico and its affiliates were compromised, the people deserve to know. All legal determinations will be left to the appropriate authorities.”

Submissions for the RFP are due Aug. 22. The board expects to have a final investigation report within 90 days after selecting an investigative firm and said its findings will be made public after the investigation concludes.

“The timing of the investigation will depend mainly on the degree of cooperation of the government and its instrumentalities, which will determine whether the Oversight Board would be required to resort to legal actions to obtain the necessary information,” Jaresko added. “The Oversight Board will exercise the full extent of its authorities to perform this investigation.”

The board uploaded the following documents to its website: