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  • Writer's pictureThe San Juan Daily Star

Lawmaker demands probe into possible misuse of CARES Act funds



House Tourism Committee Chairman José Rivera Madera

By The Star Staff


House Tourism Committee Chairman José Rivera Madera demanded on Tuesday immediate action from Gov. Pedro Pierluisi Urrutia regarding a commonwealth comptroller audit that found that about $2 million in Coronavirus Aid, Relief, and Economic Security (CARES) Act funds were given to tourism-related entities that did not qualify for the emergency funds.


The lawmaker raised the alarm about the finding, emphasizing that the action could have resulted from government corruption.


“This matter must reach its final consequences and that the protagonists, both of the Tourism Company and the Disbursement Supervision Committee, and the recipients of these benefits acquired illegally, be prosecuted and forced to return up [the funds] to the last cent,” Rivera Madera said. “The governor must do the right thing, establish responsibilities, and not become complicit with his silence.”


The acts, committed in 2020, arose after former governor Wanda Vázquez Garced created the Disbursement Supervision Committee, a group charged with establishing strict controls to ensure that all expenses and disbursements met the requirements and conditions established in the CARES Act.


The commonwealth comptroller report shows that some $1.9 million were made to three individuals and six entities, whose identities were not revealed. The alleged payments are equivalent to 12% of the funds allocated to the program.


The group was chaired by Fiscal Agency and Financial Advisory Authority Executive Director Omar Marrero Díaz, who chaired the group, according to the report; then-Treasury Secretary Francisco Parés Alicea; and top officials at the Office of Management and Budget.


“At a time when Puerto Rico’s recovery after natural disasters had not yet begun, the possibility that those close to the government have illegally benefited is a reprehensible act and another example of the government’s inefficiency in granting and supervising recovery funding,” the lawmaker said.


Rivera Madera said he would give special priority to the allegations and that he hoped that both the governor and his team would be accountable to the public for what “clearly constitutes the commission of a crime due to corruption.”


Marrero Díaz in a statement clarified several of the points expressed in the report, which he said was not shared with the AAFAF for comments prior to its publication, as is customary.


Specifically, the report, approved on Jan. 25 with notification provided to the AAFAF on Feb. 2 by the Office of the Comptroller of Puerto Rico, seeks to verify whether federal funds for the tourism industry in Puerto Rico were distributed in accordance with the Program Guidelines for the Assistance of the Tourism Industry (Guides).


The process established by the Disbursement Supervision Committee set the criteria for the entities to receive funds, Marrero Díaz said. After the Puerto Rico Tourism Company confirmed the eligible entities under its jurisdiction, each eligible organization had to apply through the SURI platform, accepting the terms and conditions of the Guides and also certifying that they met the requirements established for the emergency grant. Once the disbursement was approved, the contracts were signed by the parties.


“The Report in question speaks of ‘contracts,’ when in reality they are transfer agreements or Transfer Agreements,” the AAFAF chief indicated. “The Transfer Agreement referred to is a document in which the recipient entity agrees to comply with all the terms and conditions of the federal grant.”


The supervision committee believed that the transfer agreements did not have to be registered in the comptroller’s office, he added.


“It should be noted that, during the emergency caused by the COVID-19 pandemic, the priority and public policy established was to expedite the disbursements of funds to impact the citizens and the country’s economy positively,” Marrero Díaz said. “In this way, we sought to quickly mitigate the adverse effect that the closure orders caused on Puerto Rican companies.”


“The Committee was an administrator of the funds,” the head of AAFAF noted. “Once the funds reached the recipient or beneficiaries, they entered into contractual relationships with different suppliers and others to meet their different needs. The purpose of the document, the transfer agreement, is to expressly establish the primary compliance responsibility of the person who received the funds, not through a contractual relationship, but as an acceptance that they must comply with regulatory requirements.”

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