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Conflict of Interest in Multimillion-Dollar Prasa Contracts Comes to Light

By on September 21, 2016

SAN JUAN — The Puerto Rico Aqueduct & Sewer Authority (Prasa) awarded a series of lucrative contracts to three private companies that are closely related to a senior official of the public corporation, according to documents held by Caribbean Business.

The contracts in question intended to develop a “geodatabase” to map Prasa subscribers.

A review of the contracts awarded to Miya Puerto Rico LLC, CSA Group LLP and Truenorth Corp. revealed that the name of Prasa’s former vice president of the Office of Corporate Strategic Planning, Mauricio Olaya Builes, is constantly linked to the contracts related to the capital improvement project.

When announcing the geodatabase project, Prasa Executive Director Alberto Lázaro had indicated that the initiative would allow the public corporation to tackle cases of water theft, classify their customers properly, correct postal and physical addresses, and locate properties to connect and disconnect the service if necessary.

Alberto Lázaro, Prasa presidentHowever, as explained by the complainant—who has extensive knowledge of Prasa’s administrative operations—the water utility spent several million dollars when it hired three private companies closely linked to Olaya Builes, who until January 2016 occupied the aforementioned position in Prasa. Such contracts were granted with the backing of Lázaro himself in several instances during a time in which the Puerto Rico government claimed financial hardship.

“This man [Olaya Builes] used his position on several occasions to influence and participate in the multimillion-dollar contracts to CSA Group LLP, Miya and Truenorth Corp., of which he was a former employee,” said the source, who spoke under condition of anonymity for fear of reprisals.

The information Caribbean Business obtained indicates that Olaya Builes served as senior assistant director of planning at Prasa between Sept. 11, 2008, and Dec. 22, 2011, when he resigned just two months after Miya Puerto Rico LLC was registered in the State Department. Olaya Builes worked at Miya as a project manager between January and April 2012. In January 2013, he was appointed executive adviser to the executive director of Prasa and in September of the same year he was promoted to the position of director of the newly created office of corporate strategic planning at the public corporation.

In October 2014, Olaya Builes was promoted again, this time to the position of executive vice president of that office, a position he held until January 2016, when he resigned to return to private enterprise.

However, evidence provided by the source indicates that Olaya Builes also worked for Truenorth Corp., and appears in 2008 as a project manager for CSA Group.

According to the Puerto Rico Comptroller’s Office, from July 19, 2012, to July 19, 2013, Prasa awarded a contract to Miya Puerto Rico LLC—a local subsidiary of an Israeli multinational company with corporate headquarters in the European tax haven of Luxembourg—for $5,989,119.34 to start the geodatabase project.

As revealed by the minutes chronicling a meeting of the public corporation’s governing board on July 17, 2013, Olaya Builes—who by this time was Lázaro’s executive adviser—submitted a request to amend the contract with Miya Puerto Rico with the purpose of extending the project until Nov. 30, 2013. However, in a report released by the Government Ethics Office, from Jan. 1, 2012, to Sept. 30, 2015, there was no consultation by the former Prasa official to participate in this transaction.

“Miya was hired for several jobs that were left unfinished. Therefore, the Olaya Builes goes to the Prasa board again on Feb. 19, 2014, to recommend that CSA Architects & Engineers LLP, the local subsidiary of the multinational CSA Group LLP, culminate the work Miya began at [the rate of] $ 2.4 million for 12 days of work,” the source said.

The database of the Puerto Rico Comptroller’s Office reveals evidence of at least 14 contracts awarded by Prasa to CSA Architects & Engineers LLP for technical services amounting to just over $32.9 million from 2011 to 2016. According to documents obtained by Caribbean Business, Olaya Builes served as project manager for CSA Group in April 2008.

“In mid-2012, after he resigned from Prasa and went to work with Truenorth, Olaya Builes was responsible for advising the public corporation on issues related to the recovery of revenue, among other initiatives, which in those instances were under the tutelage of the current Prasa executive director,” the source said.

“As if that weren’t enough, according to the comptroller’s office website, on April 4, 2016, just three months after Olaya Builes had resigned to a Prasa position for the second time, [the utility] passed Amendment C, which granted $100,000 to Contract No. 2016-000018 of Truenorth Corp. At the time of carrying out the amendment, [said contract] was for a total of 8,175,000, and included other tasks related to the geodatabase,” he added.

According to the source, Truenorth is chaired by prominent businessman Gabriel Fernández Ferrer, who during the past four years has made contributions totaling more than $17,900 to current administration officials, including Gov. Alejandro García Padilla; former House Speaker Jaime Perelló Borrás; San Juan Mayor Carmen Yulín Cruz Soto; Senate Vice President José Dalmau Santiago and Sen. Cirilo Tirado Rivera.

Caribbean Business’ efforts to contact Prasa’s communications director to learn more about the status of the geodatabase project were unsuccessful as of this writing.

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