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Puerto Rico: As Whitefish Contract Faces Scrutiny, Fluor and Other Companies Move to Privatize Water

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We look at the recovery of Puerto Rico after Hurricane Maria, which dominated a Senate hearing Tuesday and was supposed to be the focus of another hearing in the House today, before it was canceled. San Juan Mayor Carmen Yulín Cruz was set to testify at the hearing alongside FEMA chief Brock Long. Earlier Tuesday, Long testified before the Senate that his agency had nothing to do with approving the controversial $300 million no-bid contract with Whitefish Energy, a tiny company based in the Montana hometown of Interior Secretary Ryan Zinke. Meanwhile, Democracy Now!’s Juan González says other companies are moving in to privatize other services on the island, such as the public water utility.

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan Gonzalez.

JUAN GONZÁLEZ: We turn now to Puerto Rico, where the island’s recovery after Hurricane Maria dominated a Senate hearing Tuesday and was supposed to be the focus of another hearing in the House today, before it was canceled. San Juan Mayor Carmen Yulín Cruz was set to testify at the hearing alongside FEMA chief Brock Long. But Republican lawmakers canceled the meeting, saying Cruz had been added to the event without enough notice. Cruz took to Twitter to respond Tuesday night.

MAYOR CARMEN YULÍN CRUZ: Hi. This is Yulín Cruz. I just landed in D.C. I was invited by Bennie Thompson, from—ranking member, Democratic, from Homeland Security Committee, to a hearing where the director of FEMA, [Brock Long], and myself were going to appear and testify as to the effectiveness of FEMA. In my case, that wasn’t going to be the case, because, of course, you know that even though I have said that in the past week, week and a half, things have sped up, it was deplorable the way that FEMA acted against the Puerto Rican people.

So, here we are. We just landed. And we were told—we received a statement by Congressman Bennie Thompson stating that the majority, Republican majority, for the second time in a row, has canceled the hearing, with no date for it to be rescheduled. I’m just wondering: What are they afraid of?

The truth has been told. People have seen all over the world how the United States, Trump’s administration—because I always have to make that difference. There’s a difference between the American people and the Trump administration and how they have treated Puerto Rico. And now, if anyone had any doubt in Washington, D.C., with this canceling of the meeting, perhaps they thought I was going to back out. Well, I never back out from telling the truth. And we’re going to keep on fighting. So we’re going to use the time to visit people on Capitol Hill, those that aren’t scared of the truth, those that can handle the truth, so that they will help us make things better in Puerto Rico. We’re going to keep up the fight.

JUAN GONZÁLEZ: That’s San Juan Mayor Carmen Yulín Cruz, speaking from Washington, D.C., on Twitter Tuesday night. The hearing at which she was set to testify has not been rescheduled.

Well, earlier on Tuesday, FEMA head Brock Long testified before the Senate Homeland Security and Government Affairs Committee, where he insisted FEMA had nothing to do with approving the controversial $300 million no-bid contract with Whitefish Energy, a tiny company based in the hometown of Interior Secretary Ryan Zinke in Montana.

BROCK LONG: The Whitefish contract was not a FEMA contract. PREPA entered into this contract in late September. We were notified several weeks after the fact. Our lawyers—there’s no lawyer inside FEMA that would have ever agreed to the language that was in that contract, to begin with, so let me be very clear about that. And we raised the red flag in basically saying, you know, we’re not sure this is a sole source contract or a competitive rate. There were many things wrong. There was also language in there that would suggest that the federal government would never audit Whitefish, which there’s not a lawyer inside FEMA that would ever agree to that type of language. So, the bottom line is, is that, as I understand, not $1 has gone towards that contract from FEMA. And what we’re doing is rectifying to make sure that PREPA has not requested any funding for that reimbursement effort.

AMY GOODMAN: So that’s FEMA head Brock Long testifying on Tuesday. The Associated Press reports a price list attached to the Whitefish contract sets rates for more than $20,000 an hour for heavy-lift Chinook helicopters, among other things. But the governor of Puerto Rico announced on Sunday, actually while we were in the offices of UTIER, the electrical workers’ union chief, that they will try to cancel the contract with Whitefish, $300 million. But it is not exactly clear what it means, he said, after paying them for immediate work. Juan?

JUAN GONZÁLEZ: Yeah, yeah. They’re still going to have to, obviously, pay some penalties here in terms of the fact that Whitefish has brought all of these folks to Puerto Rico and will have to be—they’ll have to be compensated and finish some work. But this is just part of the continuing problem of the—not only the corruption in, unfortunately, Puerto Rico, but also of the failure of the entire oversight system that the United States has set up. I want to let folks know, the financial control board had a meeting this week. And among the things that they decided was—

AMY GOODMAN: The financial control board over Puerto Rico.

JUAN GONZÁLEZ: Overseeing Puerto Rico, right. They had a meeting this week. And they—and among the things that they decided is they now have re-established a $10 million limit on any contract that the government of Puerto Rico can issue without their approval. And they reserve the right to review any contract, but that they—any contract above $10 million must first be reviewed and approved by the financial control board. They’ve also appointed now an emergency manager over the Puerto Rico electric company, a former Air Force colonel, who is now basically the emergency manager of the company.

And interestingly, there’s another contract that hasn’t received much attention, which is that the Army Corps of Engineers has given—initially, it was a $240 million contract to the giant Fluor Corporation to also get involved in fixing the electrical grid in Puerto Rico. But then the Army Corps of Engineers announced that that’s gone to $840 million, up to a $600 million increase. And viewers should watch this Fluor contract, because Fluor is well known as a major infrastructure company that specializes in privatizing water supplies, in being able to take over the management of public water utilities.

AMY GOODMAN: And is Fluor the Cobra contract that they’re talking about?

JUAN GONZÁLEZ: No, that’s separate.

AMY GOODMAN: Which is another $200 million contract.

JUAN GONZÁLEZ: Which is another $200 million.

AMY GOODMAN: Which, when we spoke to the San Juan mayor in San Juan on Friday, she was looking at the $300 million contract, then the $200 million contract. I mean, they’re calling for the resignation of and the firing of the head of PREPA, which is the public power [utility], who signed these contracts, and this whole question of Brock Long, the head of FEMA, saying, “Oh, we had nothing to do with this.”

JUAN GONZÁLEZ: Well, clearly, there is a morass that is developing in terms of recovery in Puerto Rico. And the federal government is implicated. The financial control board is implicated. The governor, the local government of Puerto Rico is implicated. And we’re going to continue to see huge problems, I believe, in the recovery effort in Puerto Rico, because everyone’s pointing fingers, but at the same time lots of people are making money off of this recovery.

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