[Editorial] Bad Easter Bunny
Puerto Rico has a crying need for capital to create tens of thousands of jobs
When President Donald Trump hosts the traditional Easter Egg Roll—a post-Pascuas event held annually on the Southern lawn of the White House—it is not likely Gov. Ricardo Rosselló will attend. The general public is invited to participate through an online lottery that closed March 4. There are also volunteer opportunities but the deadline for applications expired March 7. Of course, Trump always invites special guests—some political cronies, the occasional head of state, celebrities and professional athletes, who enjoy the day’s festivities punctuated by top-notch performing acts.
It is more likely that Bad Bunny, not Rosselló will be invited to the Egg Roll in 2019. Rosselló’s figurative— “If the bully gets too close; you punch the bully in the mouth,” does not help his chances of receiving a presidential invite. My, how things have changed since the President told Rosselló he had the looks of a movie star—“straight out of central casting,” early in 2017. True story, swear to God.
Now, the governor has been reduced to making populist threats to confront Trump’s public statements that “Puerto Rico will not receive another cent in disaster relief.” The Rosselló administration had hoped for at least $94 billion in disaster funding in the aftermath of Hurricane Maria; the total allocated thus far between the Federal Emergency Management Agency (FEMA) and Community Development Block Grant-Disaster Relief (CDBG-DR) funds assigned is in the vicinity of $70 billion.
It is true that Puerto Rico has received money allocated at a snail’s pace. A report by BMJ Global Health, which outlined the disparities in federal disaster response to catastrophes in Texas, Florida, California and Puerto Rico, is quoted in a white paper by think tank Vision to Action (V2A). “The study looks at federal response 6 months after landfall. Nine days after landfall, Harvey and Irma survivors received $100 million, while Maria survivors received $6 million in aid. Within the first two months, Harvey and Irma survivors (stateside) received $1 billion. It took double the amount of time, four months, for Maria survivors to receive that amount.
As it is true that help for Puerto Rico came at a snail’s pace, so too is there truth to Trump’s statements that the United States assigned more funds for Puerto Rico than all U.S. jurisdictions combined. Sadly, the conditions tied to reimbursements are rather onerous and not uniform in all jurisdictions.
The United States Department of Housing & Urban Development, which is managing CDBG-DR assignments, sent Caribbean Business a breakdown of the next $8.2 billion tranche coming down the pike.
The allocation sets aside $2.8 billion for housing; $1.3 billion for economic revitalization; $1.3 billion for infrastructure; and $1.9 billion for multisector initiatives.
If the requests for proposal look anything like those assigned to the first $1.5 billion earmarked for Homeowner Repair, Reconstruction & Relocation (R3) monies allocated in late 2017, it is likely that few local companies will be able to throw their hard hats into the reconstruction ring. The V2A report quotes stats from a report by the Center for a New Economy (CNE), which found that of the $5 billion in fed funds—336 days post-landfall—obligated for reconstruction work in Puerto Rico, $4.3 billion (89.7 percent) went to firms based in the U.S. mainland and only $490 million (10.3 percent) went to Puerto Rico firms.
The conditions behind those grants are made onerous because of irregularities and malfeasance—cases in Louisiana and Mississippi were recently quoted during congressional hearings—tied to disaster capitalists in recoveries past. Those past wrongs and a handful of outliers that congressional sources say are tied to the Rosselló administration, seeking to be intermediaries for Fed funds, have put los federales on high alert.
Now, Puerto Rico is hoping against hope that the flood of federal funds will finally arrive. In a symbolic move of goodwill on the federal front, permission was granted to the Central Office for Reconstruction, Recovery & Resiliency (COR3) to oversee the assignment of FEMA funds. The $8.2 billion CDBG-DR funds are being treated differently—the feds want to make certain these are put to proper use.
How sad that Puerto Rico’s government and the de facto administrators of this old colony—the Financial Oversight & Management Board—have all but ignored Title V under the Puerto Rico Oversight, Management & Economic Stability Act (Promesa). That section of Promesa enables fast-track construction of critical projects in the case of an emergency. No—better to make excuses.
There has been much talk of assigning a federal coordinator to administer the assignment of those funds. It would be a great help if funding were conditioned to keeping monies in Puerto Rico and hiring local talent to help rebuild. Puerto Rico has a crying need for capital to create tens of thousands of jobs.
Meanwhile, “the Easter Egg Roll will take place on Monday, April 22, 2019, on the South Lawn of the White House. Families with children 13 years old and younger are invited to join the President, First Lady, White House staff and their families for a day of festivities.” Happy Easter.