Monday, June 1, 2020

Sources: Puerto Rico Gov’t Hid Real Reason for Canceling Contract for COVID-19 Tests

By on April 9, 2020

Puerto Rico Treasury Secretary Francisco Parés Alicea (Juan J. Rodríguez / CB)

Questioned by Media, Treasury Secretary Confirms Feds Stopped the Transaction

SAN JUAN — Federal authorities stopped Puerto Rico’s $19 million transaction for the purchase of rapid COVID-19 tests with Apex Contractors, which would explain the reason why the commonwealth government canceled the multimillion-dollar transaction.

Caribbean Business sources with direct knowledge of these developments said the financial institution that issued the check, Oriental Bank, contacted General Services Administrator Ottmar Chávez to inform him that the funds had been put on “hold” by federal authorities after they notified them as required by law.

Chávez then notified Treasury Secretary Francisco Parés because the electronic transfer had originated from the Treasury Department.

The sources assure that, upon becoming aware of the matter, Parés called Gov. Wanda Vázquez Garced’s chief of staff, Antonio Pabón, and notified him that the transaction had been stopped.

As of this publication, CB had yet to receive a reply to a request for comment left with the Treasury secretary. However, Parés confirmed the information in a WIAC radio interview.

“We learned that Oriental Bank had problems making the [$19 million] transfer to the Australian entity that Apex had contracted, and I notified central accounting to intervene to get that money back,” the secretary said in the interview.

A request for an interview was left with GSA’s Ottmar Chávez.

Caribbean Business learned that Apex did not typically hold more than $30,000 in its account, which made authorities that were already investigating Department of Health and other agency transactions suspicious of the multimillion-dollar transaction.

On Monday, Health Secretary Lorenzo González revealed the cancellation of the purchase of one million tests for COVID-19, without specifying the reasons for said action.

He later said the cancellation was due to the fact that the tests were not delivered March 31, as stipulated in the contract. However, the new information explains why the tests would have not arrived, as the advance payment the company had requested was not received due to the federal intervention.

The information was not revealed Wednesday at the impromptu press conference given by Vázquez Garced on the matter.

Apex is one of two companies the Department of Health contracted to source rapid COVID-19 tests despite these having no health industry experience.

Vázquez Garced revealed Wednesday that the government never asked how a company with no experience or known expertise in the health sector could bring from Australia the highly sought-after tests to the island in five days.

“How they were really going to do it was something we didn’t have to evaluate…. I wanted the tests to be here,” Vázquez Garced said Wednesday evening.

Both Apex Contractors and 313 LLC have associates linked to the ruling New Progressive Party. These are the only two companies contracted to provide these tests, despite the government having been offered test kits by various people and entities, which the governor confirmed Wednesday.

Radio commentator Luis Pabón Roca said Thursday on his show that he knew of at least one businessman who offered COVID-19 tests to the government for much less than the $40 per test Apex offered, but who was never called for a formal proposal.

At the press conference where the governor said she was presenting all the proof related to the scandal as evidence that there was nothing to hide, Vázquez Garced did not reveal how the Health Department issued or carried out a request for proposals process to purchase the tests.

Tests that quickly detect COVID-19 are essential to conducting the so-called contact tracing that can help find people who should be put in quarantine, while the rest of the island can begin to resume to achieve some normalcy.

Without them, the island has now spent four weeks with 75% of its businesses paralyzed, which is estimated to result in a more than $11 billion impact on the economy, the governor’s representative to the island’s fiscal oversight board, Omar Marrero, said Wednesday.

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