Report: Fiscal Board nominee’s track record raises flags
Probe raises flags on Fiscal Board nominee’s track record
By Tahani Shayeb-Barakat, Center for Investigative Journalism
The professional track record of the nominees named by the Financial Oversight and Management Board for Puerto Rico for the position of “Revitalization Coordinator,” Riz Shah, could present a conflict of interest were he to be appointed, a report by the Center for Investigative Journalism revealed Monday.
The architectural engineer worked for 15 years for Deloitte Touche Tohmatsu Limited, a subsidiary of Deloitte LLP, which has had contracts for more than $17.5 million with the government of Puerto Rico in the past 10 years, according to the Puerto Rico Comptroller’s Office, which the investigative group cited.
Shah, one of the three candidates nominated by the Board to identify, coordinate and accelerate the execution of critical infrastructure projects in Puerto Rico, was the executive director of Deloitte from 2001 to 2016. The Penn State University graduate majored in Middle East projects, and worked on multi-million dollar initiatives in countries such as Dubai, Indonesia, India, Russia, Saudi Arabia, among others.
He is up for the position, along with Aaron Bielenberg and Joseph Fontana, as announced on Oct. 30. The Board gave Gov. Alejandro García-Padilla 10 days to make his choice of one of the three people, who will be on the job on an interim or permanent basis. If the governor fails to decide by Nov. 9, the Board will chose the Revitalization Coordinator through a majority vote.
Candidates should be chosen for their “substantial knowledge and expertise in planning, pre-development, finance, development, operations, engineering or market share in infrastructure projects,” as established in the “Puerto Rico Oversight, Management and Economic Stability Act” (PROMESA).
However, they can not have relatives — be it a spouse, father, mother, child or sibling — who provides or has provided goods and services to the government of Puerto Rico in the past three years. It is also not permissible that they are currently providing services in Puerto Rico or that they have been government officials in the past three years.
Shah worked for Deloitte until February. Deloitte has provided auditing services to the Puerto Rico Treasury Department, the Public Employees and Judicial Employees Retirement Systems, the University of Puerto Rico, the Government Development Bank and the Tourism Company, among other agencies.
Currently, Shah is part of PriceWaterhouseCooper’s (PwC) Capital Projects and Infrastructure, a firm dedicated to assisting private and public sectors through work that combines engineering and finance in large-scale projects and infrastructure. Since February, Shah has been in charge of helping international companies and the public sector in multi-million dollar projects to improve their capital.
Recently, PwC published an evaluation on PROMESA, saying the law “offers an opportunity” to Puerto Rico “to make structural changes to the economy so that it grows.”
It recommends that a good governance structure be established first, and then focus on three long-term issues: control of the fiscal system, restructuring of debt and, finally, changing the system of governance and “even the culture within the government.”
Doel Quiñones-Núñez, professor at the Inter American University Law School, said the conflict of interest that could arise if Shah were selected is personal, not business-related.
“We have to find out what links, from the company, he has with Puerto Rico: whether it is direct or indirect. Direct is that he works or has [performed] jobs here. Indirect is that he receives money that is gained from Puerto Rico profits,” even if he no longer works for Deloitte, the professor said.
Quiñones-Núñez believes the candidate must demonstrate that he has no ties with the Puerto Rican government.
There is no evidence that Shah participated directly or indirectly in the contracts Deloitte had with the Puerto Rican government. The Center for Investigative Journalism contacted the engineer, but after granting an appointment for a telephone interview, Shah said he would not make any statements about Puerto Rico on instructions from his recruiters.