Puerto Rico gov’t: Former Treasury secretary’s complaints were referred to Justice

Former Puerto Rico Treasury Secretary Teresa Fuentes (CB file)

Comptroller says chief financial officer position creates problems

SAN JUAN — Anthony Maceira, the secretary of Public Affairs of the Puerto Rico governor’s office, La Fortaleza, stated Wednesday that the denouncements that former Treasury Secretary Teresita Fuentes made when she left her position, were referred to the relevant authorities.

“The information was taken to the Department of Justice and, according to reports in the media, the Justice Department initiated an investigation and also referred it to the federal authorities. According to what the then-secretary expressed in her letter of resignation, she was not fired, she had some differences in public policy and she resigned voluntarily,” Maceira said in a Radio Isla interview.

On Tuesday, amid allegations of mismanagement and corruption, Fuentes stressed that upon leaving office, she informed Gov. Ricardo Rosselló about the irregularities in the department that led to her resignation. She also said she made Justice Secretary Wanda Vázquez and Comptroller Yesmín Valdivieso aware of her allegations.

Valdivieso agreed with Fuentes regarding her statements about inconsistencies with the position of chief financial officer of the government (CFO), which was occupied by her predecessor, Raul Maldonado Gautier.

“I think that a lot of what happened with the Department of the Treasury, Raúl [Maldonado Gautier], Teresita [Fuentes], has to do with the fact that the CFO position was created, and who was always appointed was the secretary of the Treasury, and suddenly, when Raúl leaves the Department of the Treasury to be chief of staff and remained in the position of CFO, that office is not created under the government organizational chart and did not have its own budget,” Valdivieso said in an interview with Radio Isla as well.

“The moment Raúl left the Treasury to go to Fortaleza, he had to use the resources of the Department of the Treasury in the areas of accounting, investments and so on. When someone is given a responsibility, they have the responsibility to manage their office. I can work if I have another person using my resources at the same time. It becomes extremely uncomfortable…. Yes [she said agreeing with Fuentes] because the staff of the Department of the Treasury was doing functions for both the Treasury secretary and the CFO,” she added.

This week, Maldonado Gautier was dismissed from his positions as Treasury secretary, Office of Management and Budget director and CFO for denouncing an alleged “institutional mafia” in Treasury without first informing the governor. On Tuesday, his son, Raúl Maldonado Nieves, insisted that his father’s accusation that the governor was corrupt and ordered that an audit by BDO on the handling of shipping containers with aid for Hurricane María victims be changed.




Former Puerto Rico Education secretary terminates contract with fiscal agency

Julia Keleher (CB file)

Following resignation and amid alleged investigation, won’t receive some $60,000

SAN JUAN – Puerto Rico Education Secretary Julia Keleher renounced her $250,000 contract with the island’s Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym), Public Affairs Secretary Anthony Maceira Zayas confirmed Thursday.

In his statement, Maceira announced that Ricardo Llerandi, chief of staff of the governor’s office, La Fortaleza, accepted Keleher’s decision to end her contractual relationship with Aafaf, arguing that “no situation should divert attention from the work that is being done to continue transforming Puerto Rico.”

Llerandi thanked Keleher “for putting Puerto Rico and the children before any issue,” adding that for the governor’s administration, it is “essential” that “major issues are the ones that prevail in the public discussion. I Immediately accepted and agreed with Keleher’s determination and informed Aafaf,” which “has terminated the agreement, effective immediately.”

Keleher’s decision comes about after she stepped down this week and subsequent reports of a federal investigation into alleged irregularities in the awarding of Education Department contracts while she was secretary.

Before resigning as head of the agency, Keleher held a $250,000 contract with Aafaf to advise on matters related to the restructuring of the Education Department, which she ran until April 2.

Her contract began in August 2017 and was set to end June 30. The third clause on the cancellation of the contract, stipulates that in case she opts to terminate the agreement before the scheduled date, she would have to notify Aafaf 30 days earlier, as long as there were no reasons beyond Keleher’s control to make it unethical or impractical for her to continue working under that agreement.

The contract provided that Keleher be paid $20,833.33 a month, which at the end of the year could not exceed $250,000. She must return to the government any confidential information to which she has had access within 30 days after the end of the contract.

Read a commentary written by Keleher and published by Education Week the day after she resigned.

Puerto Rico secretaries of Education, Public Safety step down

 




Puerto Rico Treasury investigation hinders audit of sin taxes

Editor’s note: A version of the following report originally appeared in the Sept. 6, 2018, issue of Caribbean Business.

At a time when the Puerto Rico government’s ability to improve tax revenue and move toward the financial responsibility outlined in the fiscal plan is questioned, 12 employees inside the Treasury Department’s Consumption Tax Bureau were escorted out of their offices and suspended from work, which has affected operations at the division attached to the Auxiliary Office of Internal Revenue.

In a brief statement, Treasury Secretary Teresita Fuentes confirmed to Caribbean Business that an internal investigation is underway. However, she did not share specifics regarding the investigation, nor the reason employees were removed without their belongings.

“The Department of the Treasury is conducting an internal investigation that involves 12 employees of the Consumption Tax Bureau. A provisional suspension measure was determined while the investigation process continues,” Fuentes said on Aug. 27.

Efforts to learn specific details from Treasury about the scope of the investigation, such as the names of those implicated, positions they held or whether fraud is involved, have been unsuccessful. Bureau Director David Coons has yet to answer requests for information first submitted more than a week ago. However, Fuentes’s office sent a brief statement Tuesday, saying the department will not issue comments for the time being tosafeguard the investigation and the employees involved.

The Consumption Tax Bureau, “as the name suggests, is the one that administers all taxes on consumption. This includes the sales & use tax [IVU by its Spanish acronym] and the different excise taxes. I would say it is the most relevant bureau because the IVU is of great importance in terms of revenue,” said the former assistant secretary of Internal Revenue, Víctor Pizarro Núñez.

The former official, who served under the term of former Gov. Alejandro García Padilla, also indicated that audits and internal investigations are routinely conducted in the bureau. However, he acknowledged that given the number of employees suspended, the investigation could be into potential fraud.

Several Caribbean Business sources, who spoke on condition of anonymity, said the suspended employees have industry-specific expertise in auditing. In addition, they said that since the abrupt removals occurred, the operations of some offices have been severely affected because the suspended employees have not been replaced.

“As I understand it, they were escorted to the exit and it wasn’t pretty…. I know they are from different areas of the Consumption Tax Bureau and that several of them deal with licenses such as alcoholic beverages, cigarettes, gaming machines and promotion licenses. Something was happening over there…,” said one events-industry source.

The source indicated that the one person responsible for the renewal of promoter licenses for shows was one of the suspended employees and that the person’s duties were assigned to those in charge of approving entry tickets, employees who do not have the necessary experience or access to the system that reflects how much IVU a promoter withheld and remitted.

“Of the 12 people who were taken away is the one who renews the promoter’s licenses. All promoters renew their licenses annually, but they are worked on as a group monthly, based on the last number of the employer’s social security. With this person gone, she was the only one who did license renewals, and all those cases she has been working have been left up in the air. We are the only industry that gets its IVU payments audited annually as part of the renewal of that license,” the source said.

The process to renew a promoter’s license may take more than two hours while approvals take about 15 minutes. “If one day, two people arrive to renew their license and they are sent to the cubicle of those who [do the] endorse[ment], they can paralyze the entertainment [division] office because they are renewing licenses and it will take a long time. There have already been people who have [left] at 2 p.m. and…left without an endorsement,” the source added.

The promoter of any event held in Puerto Rico that requires an admission fee or ticket needs to complete the endorsement process, which means the promoter must inform Treasury about the type of event, location, date, number of ticket offices and different pricing for the department to issue an authorization to withhold the sales & use tax.

A delay in that division could cause the sale of tickets to stop at a number of events already programmed at the island’s various venues of the island.




House passes bill to probe insurance premium hikes in Puerto Rico

SAN JUAN – The House of Representatives passed Thursday, a resolution that seeks to conduct an investigation into the rise in the cost of insurance policies after hurricanes Irma and Maria in Puerto Rico.

House Resolution 842, authored by majority New Progressive Party (NPP) Reps. Urayoán Hernández Alvarado and José González Mercado, orders the House Consumer Affairs, Banking and Insurance Committee to carry out the probe within 180 days.

As explained by the lawmakers in the bill’s statement of motives: “[T]he payment process for insurance claims has been a slow one and has been the subject of an investigation by this House of Representatives. Recently, in an article published in the press, it was reported that the increase in the cost of insurance policies is expected to be immediate and that these increases can be up to 340 percent, specifically for condos near the coast.

“This, in addition to the impact on the finances of consumers, will have the effect of reducing sales in the real estate sector of the Island. Another concern is that, due to the high cost of policies, many people opt to not renew their policies, leaving them exposed…without coverage in case of another atmospheric event,” they added.

The lower chamber’s release adds that, on Sept. 20, “we suffered the direct onslaught of Hurricane Maria, an atmospheric event that caused damage and devastation that has no comparison to previous events. The infrastructure in Puerto Rico suffered damages that are estimated at, at least, $90 billion. Projected payments by insurers are estimated to reach $15 billion.”

The representatives stressed that “the increases that insurance companies determine they must implement cannot be unreasonable.”

Puerto Rico House committee demands insurance claims data




Insurance payment delays investigated in hurricane-hit Puerto Rico

SAN JUAN – The wave of insurance claims in Puerto Rico following the devastating impact of hurricanes Irma and María in September has apparently hindered their processing, especially those lodged by island businesses.

Dozens of small and midsize companies are unable to run as their owners await their claims to be processed. This situation has contributed to an unprecedented commercial stagnation that keeps experts in suspense on an island that is already in its 11th year of economic recession.

Puerto Rico Insurance Commissioner Javier Rivera acknowledged the delays but said they were the result of several factors, not all related to insurance companies.

“In the commercial sectors, advances have to start and are not happening and this audit measures that,” Insurance Commissioner Javier Rivera said. (Cindy Burgos / CB)

In order to gather this information, Rivera explained that since Dec. 4 his office has been conducting an audit to identify these reasons. However, he pointed out that insurers have a 90-day deadline to deal with claims.

“There can be many things. It may be that insurers have a process to mitigate debt payments; that could be happening. We aren’t saying that one in particular has it, but we will be able to identify that. We will also be able to identify if the claim file isn’t complete or if it’s a problem with adjusters who aren’t visiting clients. There is also the fact of reinsurers, but these have advanced over $50 million, so the money is there,” Rivera said.

Puerto Rico insurance commissioner sends auditors out to address payment delays

“We are identifying what’s happening in the process, whether it’s a lack of documentation, if they have closed claims without payment because the customer was not insured as they thought. We also measure the effectiveness of producers, to see if they did a good policy or not, whether they gave an orientation or not. There are many aspects, and as we identify situations, we are taking disciplinary measures against those responsible,” he said, adding that these sanctions vary depending on the case and include fines.

Rivera said his office is not expecting this event to be handled like a typical one, given the circumstances, and that six days after María made landfall, the Insurance Commissioner’s Office issued a directive ordering insurers to respond to the commercial sector within 15 days, instead of the usual 90 days.

“In the commercial sectors, advances have to start and are not happening and this audit measures that,” the commissioner said.

“We have no way of knowing what happens with each claim unless the policyholder picks up the phone and calls our Investigations Department and files a complaint. Consumers have to know that the office’s work is for that and it is their responsibility to file a complaint if it merits one, “he added.

Insurance claims keep rising in Puerto Rico after Hurricane María

Meanwhile, the House of Representatives is considering Resolution 671, authored by Rep. Samuel Pagán, which orders the Integrated Development of the Northeast Region and the Integrated Development of the Eastern Region committees to investigate the processing of damage claims by insurance companies operating in Puerto Rico.

According to the explanatory summary of the resolution filed on Dec. 1, the lower chamber has received “countless complaints from business owners in the northeast and east of the island, who say they have lost their business or their main household income…this eventuality was a direct consequence, due to the delay in the intervention of the insurance companies, of the poor processing and passage of the claims on the contracted policies….”

The legislative piece also indicates that on Dec. 1, 82 days after the passage of Hurricane Irma, the payment of claims to these businesses had not been issued, which is “unreasonable and inexcusable,” and assures that is having a devastating effect on the local economy.

Regarding the House investigation, Rivera explained that the author of the measure contacted his office for suggestions before presenting it.

“The legislator had the deference to call us before producing that resolution. We gave him the recommendation that there was no problem because one of the Legislature’s main powers is precisely to investigate, and what is better than working hand in hand with our initiatives so the Legislature knows it can work un alignment with us,” Rivera said.




FBI news too late to sway millions of early voters

Democratic presidential candidate Hillary Clinton waves as she walks to her campaign plane at Westchester County Airport in White Plains, N.Y., Wednesday, Sept. 21, 2016. (AP Photo/Matt Rourke)

(AP Photo/Matt Rourke)

WASHINGTON – Donald Trump’s supporters may hope that last week’s FBI revelation about the Hillary Clinton email investigation might give the Republican’s campaign a boost. But it’s already too late for Trump to win over around a fifth of American voters, including many of the most coveted ones: those in battleground states.

Tens of millions of voters had already cast ballots before news broke Friday that the FBI was examining newly discovered emails that might be pertinent to the dormant investigation of Clinton’s use of a private email server.

In critical states such as Florida, Nevada and Colorado, one-third or more of the expected ballots have already been cast. The breakdown of those voters by party affiliation, race and other factors points to an advantage for Clinton. That will make it more difficult for Trump to capitalize on the FBI news.

Overall, early voting – by mail and at polling stations – is underway in 37 states.

More than 23 million votes have been cast, far higher than the rate in 2012, according to Associated Press data. That represents nearly 20 percent of the total votes expected nationwide, if turnout is similar to 2012. In all, more than 46 million people – or as much as 40 percent of the electorate – are expected to vote before Election Day, Nov. 8.

A look at voting so far in key states:

___

FLORIDA

More than 3.7 million early ballots have been cast, or nearly half the total votes cast in Florida in 2012. Democratic ballots are now virtually tied with those cast by registered Republicans, each with about 40 percent. Democrats have kept it close during mail balloting, when Republicans historically have done better. GOP analysts say Democrats now hold the advantage because the latter party typically runs up big advantages during early in-person voting, which began last week. Barack Obama won the state in 2008 and 2012. It’s a must-win state for Trump.

___

NORTH CAROLINA

At least 1.6 million votes have been cast, or more than one-third of total ballots in 2012. Democratic ballots lead, 44 percent to 31 percent. Democrats had been running ahead of the 2012 pace until last week, when they dipped below 2012 levels. But that may be because fewer polling places were open in the first week of in-person voting compared with 2012. More polling locations have since opened and Democrats are starting to make up ground. Republicans remain slightly ahead of 2012 levels. Republican Mitt Romney won the state in 2012 by 92,000 votes. It’s another state Trump can’t afford to lose.

___

NEVADA

More than 457,000 residents have voted, nearly half the total 1 million votes cast in 2012. Democratic ballots are currently ahead, 44 percent to 36 percent. That’s similar to the lead Democrats held at this point in 2012, when Obama won the state by 6 percentage points.

___

COLORADO

At least 866,000 people have voted, or roughly one-third the total votes in 2012. Democratic ballots lead, 38 percent to 35 percent. That’s a change from this point in 2012, when Republicans were slightly ahead in ballots cast. Obama won the state in 2012 by 5 percentage points.

___

IOWA

More than 398,000 ballots have been cast, or about one-fourth the total ballots in 2012. Democratic ballots are ahead, 45 percent to 34 percent. Democrats have been running further behind compared to 2012 levels, although there were indications of some Democratic momentum before Friday’s FBI news. The percentage breakdown in ballots cast by party is generally similar to 2012, when Obama won the state based on his strength in the early vote.




Feds Examine How Tesla Autopilot Reacts to Crossing Traffic

Tesla Motors Inc. CEO Elon Musk speaks at the unveiling of the Model 3 at the Tesla Motors design studio. (AP Photo/Justin Prichard)

Tesla Motors Inc. CEO Elon Musk speaks at the unveiling of the Model 3 at the Tesla Motors design studio. (AP Photo/Justin Prichard)

DETROIT – Federal investigators looking into electric car maker Tesla Motors’ Autopilot system after a fatal crash in Florida are zeroing in on the limitations of the system and how it reacts when obstacles cross its path.

The National Highway Traffic Safety Administration on Tuesday posted a nine-page letter seeking information from Tesla about Autopilot and why it failed to detect a tractor-trailer that crossed in front of a Model S sedan May 7 in Williston, Florida.

Much of the letter seeks information on how the system works at intersections with crossing traffic, but it also asks Tesla to describe how the system detects “compromised or degraded” signals from cameras and other sensors and how such problems are communicated to drivers.

The crash in Williston killed former Navy Seal Joshua Brown, 40, of Canton, Ohio. Tesla, which collects data from its cars via the Internet, says the cameras on Brown’s Model S sedan failed to distinguish the white side of a turning tractor-trailer from a brightly lit sky and the car didn’t automatically brake.

The safety agency also asked Tesla for its reconstruction of the Brown crash, and for details of all known crashes, consumer complaints and lawsuits filed or settled because the Autopilot system didn’t brake as expected.

NHTSA said Tesla must comply with its request by Aug. 26 or face penalties of up to $21,000 per day, to a maximum of $105 million.

A spokesman said the agency hasn’t determined if a safety defect exists with Autopilot. The information request is a routine step in an investigation, spokesman Bryan Thomas said.

Tesla’s Autopilot system uses cameras, radar and computers to detect objects and automatically brake if the car is about to hit something. It also can steer the car to keep it centered in its lane. The company says that before Autopilot can be used, drivers must acknowledge that it’s an “assist feature” that requires both hands on the wheel at all times. Drivers also must be prepared to take over at any time, Tesla has said.

Tesla released Autopilot last fall. Some safety advocates have questioned whether the company – which says the system is still in “beta” phase, a computer industry term for software testing by customers – and NHTSA allowed the public access to the system too soon.

“No safety-significant system should ever use consumers as test drivers on the highways,” said Clarence Ditlow, head of the nonprofit Center for Automotive Safety. He said NHTSA lacks the electronic engineers and laboratories needed to keep up with advanced technology such as General Motors air bags or Tesla’s Autopilot.

Tesla says Autopilot has been safely used in over 100 million miles of driving by customers and that data shows drivers who use Autopilot are safer than those who don’t.

NHTSA’s Thomas said he won’t comment on specifics of the investigation. The agency does not currently have legal authority to prevent automakers from rolling out features if they meet basic federal motor vehicle safety standards. It is in the process of developing standards for self-driving cars.

The NHTSA letter came as Tesla disclosed that a second crash occurred while at least part of the Autopilot system was operating.

A driver who was heading from Seattle to Yellowstone National Park told a state trooper that his Tesla Model X SUV was on Autopilot when it crashed early Saturday on a rural two-lane road in Montana, the state’s Highway Patrol said.

But Tesla said the driver activated autosteer, one of the Autopilot features, and no force was detected on the steering wheel for more than two minutes. If there’s no force on the wheel or a sharp turn is detected, the vehicle is programmed to gradually reduce speed, stop and turn on the emergency lights, Tesla said in a statement.

The company said the Model X alerted the driver to put his hands on the wheel, but he didn’t do it. “As road conditions became increasingly uncertain, the vehicle again alerted the driver to put his hands on the wheel. He did not do so and shortly thereafter the vehicle collided with a post on the edge of the roadway,” the statement said.

It wasn’t clear whether the Model X had made a decision to stop at the time of the crash.

Neither the driver nor the passenger was injured in the single-vehicle crash, but there was extensive damage to the passenger side and the car lost a wheel, Montana Highway Patrol trooper Jade Shope said.

The car negotiated a right curve and went off the road, traveling about 200 feet on the narrow shoulder, taking out 13 posts, Shope said.

The trooper did not cite the driver, saying he believed any citation would be voided because of the driver’s claim that the car was on Autopilot.

The NHTSA investigation, opened June 28, could have broad implications for the auto industry and its path toward self-driving cars. If the probe finds defects with Tesla’s system, the agency could seek a recall. Other automakers have or are developing similar systems that may need to be changed due to the probe, which also could affect self-driving car regulations to be unveiled this summer.

In the letter, NHTSA also asked Tesla for details on any modification to the Autopilot system that Tesla has made.




Egypt Submarine Headed to Plane Crash Site

This picture posted Saturday, May 21, 2016, on the official Facebook page of the Egyptian Armed Forces spokesman shows a life vest from EgyptAir flight 804. Search crews found floating human remains, luggage and seats from the doomed EgyptAir jetliner Friday but face a potentially more complex task in locating bigger pieces of wreckage and the black boxes vital to determining why the plane plunged into the Mediterranean. Arabic reads: “ Life vest”. (Egyptian Armed Forces via AP)

This picture posted Saturday, May 21, 2016, on the official Facebook page of the Egyptian Armed Forces spokesman shows a life vest from EgyptAir flight 804. (Egyptian Armed Forces via AP)

CAIRO – Egypt’s president said on Sunday a submarine belonging to his country’s Oil Ministry was headed to the site of the crash of EgyptAir Flight-804 in the eastern Mediterranean to join the search for the cockpit voice and flight data recorders, commonly known as black boxes.

President Abdel-Fattah el-Sissi also said Egypt was jointly investigating the Thursday crash with the French government. “It is very, very important to us to establish the circumstances that led to the crash of that aircraft,” he said in comments broadcast live on Egyptian TV channels.

He said the submarine, which has the capacity to operate at a depth of 3,000 meters (9842 feet) below the surface, left for the site Sunday. He gave no further details.

Making his first public comments since the crash of the Airbus A320 while en route from Paris to Cairo, el-Sissi says it “will take time” to determine the exact cause of the crash, which killed all 66 people on board.

He thanked the nations that have joined Egyptian navy ships and aircraft in the search for the wreckage and started his comments with a minute of silence in remembrance of the victims.

El-Sissi also cautioned the media against premature speculation on the cause of the crash.

“There is not one scenario that we can exclusively subscribe to … all scenarios are possible,” he said.

El-Sissi spoke a day after the leak of flight data showing trouble in the cockpit and smoke in a plane lavatory aboard the doomed aircraft, bringing into focus the chaotic final moments of the flight, including a three-minute period before contact was lost as alarms on the plane screeched one after another.

Officials have been cautioning that it was still too early to say what happened to the aircraft, but mounting evidence points to a sudden, dramatic catastrophe that led to the crash.

Egypt’s military on Saturday released the first images of aircraft debris plucked from the sea, including personal items and damaged seats. Egypt is leading a multi-nation effort to search for the plane’s black boxes and other clues that could help explain its sudden plunge into the sea.

“If they lost the aircraft within three minutes that’s very, very quick,” said aviation security expert Philip Baum. “They were dealing with an extremely serious incident.”

Authorities say the plane lurched left, then right, spun all the way around and plummeted 38,000 feet (11,582 meters) into the sea – never issuing a distress call.

Investigators have been poring over the plane’s passenger list and questioning ground crew at Paris’ Charles de Gaulle airport, where the airplane took off. Beside Egypt, ships and planes from Britain, Cyprus, France, Greece and the United States are taking part searching a wide area of sea 180 miles (290 kilometers) north of the Egyptian port city of Alexandria.

The EgyptAir tragedy deepens the country’s struggle to revive its battered economy. While it may not reflect directly on security at Egypt’s airports – which has been under international scrutiny since a Russian airliner crashed in the Sinai Peninsula in October after taking off from an Egyptian resort – the country’s association with yet another air disaster will further damage its vital but currently depressed tourism industry.

The Associated Press




Ex-worker Says VW Destroyed Documents, Obstructed Justice

DETROIT – Volkswagen deleted documents and obstructed justice after the U.S. Environmental Protection accused the company of cheating on emissions tests, a former employee alleged in a lawsuit.

Daniel Donovan says in a whistleblower case that he was wrongfully fired Dec. 6, 2015 after refusing to participate in the deletions and reporting them to a supervisor. The lawsuit says that the evidence deletion continued for three days after the Sept. 18 allegations from the EPA and despite a hold order from the Justice Department.

VW has admitted that it programmed about 600,000 diesel-powered cars in the U.S. to turn on pollution controls during EPA treadmill tests and turn them off when the cars were on the road. The agency alleges that the cars emit as much as 40 times the allowable amount of nitrogen oxide, which can cause respiratory problems.

The Justice Department is investigating potential criminal charges against VW, and the company has been negotiating with the EPA and California regulators to come up with repairs. VW faces a March 24 deadline from a federal judge to reach agreement on the fixes.

Donovan worked as a technology employee with VW’s general counsel office who was responsible for electronic information management in injury and product liability cases. The lawsuit said he was fired “because of his refusal to participate in a course of action that would spoilate evidence and obstruct justice” in the EPA and Justice Department probes.

WOLFSBURG, GERMANY - OCTOBER 21:  The Volkswagen logo stands illuminated on an administrative building at the Volkswagen factory and company headquarters near an employee parking lot on October 21, 2015 in Wolfsburg, Germany. According to media reports a Volkswagen spokesman has acknowledged that the emissions cheating software the company installed in its EA 189 diesel motor in 11 million cars and light trucks worldwide might also be present in another diesel motor called the EA 228. The software the company deliberately installed manipulates diesel engine emissions results under testing conditions. Volkswagen faces investigations and fines in countries across the globe.  (Photo by Sean Gallup/Getty Images)

Volkswagen headquarters in Wolfsburg, Germany (Photo by Sean Gallup/Getty Images)

But VW said Monday that Donovan’s departure from the company was not related to the diesel emissions issue. “We believe his claim of wrongful termination is without merit,” the company said Monday in a statement.

Donovan, who worked in VW’s Michigan offices, alleges that the company’s information technology department did not stop deleting items until Sept. 21, so Donovan reported his concerns to his supervisor, according to the March 8 lawsuit filed with the Oakland County Circuit Court in Pontiac, Michigan. It also says the department was not preserving backup disks.

Donovan was fired because VW of America believed he was about to report the deletions and obstruction of justice to the EPA, Justice Department or the FBI, according to the complaint. It was unclear whether Donovan, of suburban Detroit, spoke with federal investigators. His attorney, Sam Morgan, would not comment and said his client didn’t want to speak about it either. A message was left for the U.S. Attorney’s Office in Detroit.

The lawsuit alleges that the company violated the Michigan Whistleblowers’ protection act.

VW potentially faces more than $20 billion in U.S. fines, as well as hundreds of class-action lawsuits from angry vehicle owners. Diesels account for about 25 percent of the company’s U.S. sales.

The scandal already has cost the CEO his job, and last week, VW ousted Michael Horn, its top U.S. executive.




Rep. Charbonier Demands Ouster of Family Secretary

SAN JUAN – New Progressive Party (NPP) Rep. María Milagros Charbonier has called for the resignation of Family Department Secretary Idalia Colón allegedly for poor management of the agency, including the “waste of public funds in the Socioeconomic Development of the Family Administration [Adsef by its Spanish acronym], among others,” the legislator said.

“Apparently every day we hear about a new controversy at the Family Department. It is obvious the secretary does not have control of that agency and given that scenario, it is recommended she leave her position and allow a person with the ability and desire to serve our people to take charge,” Charbonier said in a statement Monday.

According to the release, the call for Colón’s resignation follows multiple events, among which it highlights that Adsef Administrator Marta Elsa Fernández “authorized spending thousands of dollars in public funds for ‘luxury’ meals” and the remodeling of her administrative offices.

In addition, the release says, it was revealed Monday morning that an employee of the Childhood Care and Integrated Development Administration (Acuden by its Spanish acronym) is under investigation for misappropriation of public funds and that the investigation “has been blocked” by the secretary’s office.

“We want to know what has happened with the case of Mrs. Edna Soto, who is accused of misappropriating public funds and whom the secretary is trying to save. We have several questions the secretary has to answer,” the politician stated. “We want to see the results of this investigation as soon as possible and that appropriate action is taken,” she concluded.