Puerto Rico funds in peril after ex-Health Dept. head charged
Regional HHS inspector general says development affects government’s credibility
SAN JUAN — After weeks of speculation about federal investigations in Puerto Rico, the U.S. Justice Department announced a 32-count indictment charging six defendants, including Ángela Ávila, the former executive director of the Puerto Rico Health Insurance Administration (ASES by its Spanish acronym), and the president of accounting firm BDO Puerto Rico, Fernando Scherrer, along with a contractor of the firm, Alberto Velázquez.
The U.S. attorney for the District of Puerto Rico, Rosa Emilia Rodríguez, explained Wednesday that Ávila is accused of giving BDO, specifically Velázquez, privileged information, which in turn was used so BDO could receive several contracts totaling $2.5 million.
When BDO submitted the proposal, allegedly Ávila gave the ASES governing board the recommendation to cancel the previously established contracts to then hire BDO, which against regulations, subcontracted Velázquez.
The indictments came only a day after Puerto Rico’s resident commissioner in Washington, D.C., Jenniffer González, announced a bill to grant $12 billion in Medicaid funding to the island. In remarks Wednesday, federal officials raised concerns about the charges, suggesting the possibility that those funds make it to the island may have diminished.
During the Justice Department’s press conference Wednesday the deputy inspector general for the Department of Health and Human Services (HHS) for Puerto Rico and the U.S. Virgin Islands region, José Luis Soto, said the developments affect the credibility of the local government.
“Definitely, [how much this affects] is a decision for the Centers for Medicare & Medicaid Services [CMS], which is the agency within the Department of Health that has to make the considerations. Obviously, this does affect the credibility because we are saying that this happened in the agency that administers the Medicaid funds in Puerto Rico. In due time, CMS is going to need to make a decision,” Soto said.
He then added that “the office of the inspector general is going to have meetings with CMS to give them a series of recommendations that stem from this investigation.”
The federal official’s remarks confirm the concerns the president of the College of Physicians & Surgeons, Víctor Ramos, had expressed earlier Wednesday to Caribbean business regarding the island government’s tenability.
“We did pretty well in getting federal funds when we would go [to Washington, D.C.] in a coalition between the public sector and the private sector. That was lost after the hurricane. The government has gone by itself and the private sector has gone by itself. Going together has to be resumed. Certainly, fair or unfair, the government does not have credibility because of these arrests,” Ramos said.
Congresswoman González’s bill to try to obtain the $12 billion for the island’s health plan, which Ávila ran until three weeks ago, was slated to be introduced for a committee vote Thursday and then be evaluated by the full House of Representatives. On June 20, Anthony Maceira, the secretary of Public Affairs at the governor’s office, La Fortaleza, confirmed that the cancellation of contracts with BDO had been ordered after it was learned the firm was being investigated.
In a Radio Isla interview, González said the arrests affect the image of the island and the credibility of the federally funded programs.
“He who says that this does not have an effect, lies,” she said.
“We arrived at an agreement of giving the government of Puerto Rico $12 billion more for the payment of the government health insurance for the next four years,” González said in the interview. “She [Ávila] was the person present at the public hearings.”
No evidence of Ávila having benefited financially from the scheme was presented.
The congresswoman said the agreement would award some $2.8 billion in 2020, $2.9 billion in 2021, $3.01 billion in 2022 and $3.11 billion in 2023.
“This was a major achievement for Puerto Rico so that it wouldn’t have to face a fiscal health cliff and would force the Puerto Rico Financial Oversight and Management Board to amend Puerto Rico’s budget,” she stressed.
On June 20, Anthony Maceira, the secretary of Public Affairs at La Fortaleza, the governor’s office, confirmed that the cancellation of contracts with BDO had been ordered after it was learned the firm was being investigated.
Maceira said Wednesday that the administration would assure the federal government that those arrested acted on their own.
“Certainly, this represents a national challenge because people who are not friends of Puerto Rico are going to take hold of that to justify and harm us. And the government has to have a proactive role in going there and taking the message and make it clear that these were individuals acting, really, motivated by personal interest for their own benefit against what the administration itself establishes, the institutional structure and demonstrate all the measures we have taken specifically to ensure the integrity of processes,” Maceira replied to questions from the press about remarks by President Trump calling Puerto Rico officials corrupt.
Raúl Grijalva (D-Ariz.), the chairman of the U.S. House Natural Resources Committee, which oversees Puerto Rico matters in Congress, said Rosselló must take “immediate steps” to restore his administration’s credibility.
In an interview with the Washington Post, Grijalva called on Rosselló to resign. A statement he had published on his official webpage earlier, read: “The Puerto Rican people deserve a government that takes public service seriously, that’s transparent and accountable, and that doesn’t let this happen in the first place. Gov. Rosselló has little time and much to do to restore public faith in his government, and I urge him to take a housecleaning approach as quickly and thoroughly as possible.”