Biz Views

Op-Ed: Contracts instead of aid being distributed with funds to combat COVID-19

The irregularities which characterized the deficient government response to the consequences of Hurricane María in 2017 should have been sufficient warning to public administrators about the need to establish strict protocols and scrutiny regarding the use of emergency funds.

But three years later, neglect, lack of transparency and shady deals remain the norm amid the crisis sparked by the COVID-19 pandemic.

This is what emerges from the reports produced by the Fiscal Agency and Financial Advisory Authority, or AAFAF, about the expenditure of the funds assigned to handle the emergency.

As of April 2020, Puerto Rico received more than $2.2 billion granted by the CARES Act and another $25,609,884 in funds from the Community Development Block Grant – Coronavirus (CDBG-CV).

These allocations should have given breathing room to people who were left without work and businesses that ceased operations due to closure orders to stop the spread of the virus, as well as provide funds for the government to strengthen epidemiological surveillance and the health system, help municipalities, promote remote work and guarantee access to education.

Four months later, most of these monies have not been used and it is not clear how the amounts that have been disbursed have been spent. CDBG-CV funds were distributed to municipalities, which have not reported whether and how they have been spent.

On the other hand, only 38% of the funds from the CARES Act have been used or transferred to other government entities. This money should be used to cover expenses related to the public health emergency incurred between March 1 and Dec. 30, 2020 that were not already included in the budget.

Among the programs on which the government planned to use these funds that have not yet reported expenses are those for Payroll Protection in the Private Sector, Telemedicine and Technological Assistance for Students.

The demand to give rent assistance to people who have lost their income, which could well be provided with the sum of $435 million that the government maintains as a reserve for future allocations, also remains unaddressed.

Meanwhile, according to the report that the government publishes every week, more than $4 million have been disbursed for payments to eight private corporations without revealing what services related to the pandemic they are offering. Grupo BC Corp., Hastings Global, J. & D. García’s Construction, LCA Construction and Management Inc., and Taluna Corp. are mentioned in relation to disbursements of between $1,596,837 and $64,691 under the COVID-19 Emergency Expenses in Prisons program, which has already used 93% of its allocation.

At least one of the items under the name of J. & D. García’s Construction, hired prior to the pandemic to waterproof roofs in correctional institutions, includes the note “N95 Masks.” However, in Comptroller’s Office Contract Registry there are no agreements with these companies granted after the approval of the CARES Act.

On the other hand, the scant information available in the Registry allows us to infer the relationship between some of the disbursements identified under the Government Remote Work program and current contracts granted by the Department of Transportation and Public Works (DTOP, in Spanish).

Two items in the name of Softek Inc., totaling more than $593,000, appear to be related to a contract with the DTOP signed in June 2020 to expand the functions of the DAVID+ system to renew vehicle fleet licenses. Another disbursement of $37,341 to the Vázquez Graziani & Rodríguez Law Office appears to correspond to a legal consulting contract with the DTOP that is also not available for review in the Registry.

A third item for $250,000 to Be Social Inc. matches the amount of a public relations contract with the DTOP signed in July 2020, which could not be reviewed because it was not available in the Contract Registry.

According to the corporation’s record at the State Department, the director of communications for the Department of Education, Aniel Bigio is the vice president of Be Social Inc.

It should be noted that a search of the key executives of these corporations on the Electoral Comptroller’s donation list revealed that at least two of them have partisan ties to the current administration.

In the case of Softek Inc., between 2011 and 2018 its executives contributed a total of $25,100 to the New Progressive Party and its candidates, as well as $3,700 to candidates with the Popular Democratic Party.

During the same period, María Vázquez-Graziani of Vázquez Graziani & Rodríguez donated a total of $40,905 to the NPP and its candidates as well as to campaigns in favor of annexation with the United States.

Gov’t response to pandemic fell short
The emergency that the whole world is experiencing due to the spread of the novel coronavirus required a rapid response to mitigate the impact of the measures that would be taken to stop the wave of infections.

In this context, the government of Puerto Rico has once again demonstrated its inability to protect the basic rights of the people in terms of economy, health and education, while it has been quick to distribute funds and contracts in a questionable manner to entities of doubtful capacity.

The state has abandoned the people who are suffering the consequences of the crisis, leaving them to their own devices, just as it did after Hurricane María when it failed to organize its priorities and fulfill its responsibility to protect the people’s basic rights such as access to food and water, health services, safe housing and education.

The most urgent needs created by the pandemic have to do mainly with the total or partial loss of income of people who were laid off as a result of business closures or reduced workloads. An estimated 82,200 jobs have been lost so far this year, adding to the level of unemployment that already existed and that hundreds of thousands who were self-employed have been unable to work due to the pandemic.

As of July, 526,850 people who do not qualify for regular unemployment, due to not having been on the job long enough or because they were contractors or self-employed, were claiming the Pandemic Unemployment Assistance, created by the federal government in the face of the crisis.

Judging by the testimonies on social media, the press and among acquaintances, thousands are still waiting for this aid. Also, by federal provision, beneficiaries of unemployment in any of its forms received or must receive an additional $600 per week from April to July.

However, this measure expired in the last week of July, so the maximum benefit is now $220 per week, leaving individuals and families below the poverty line and with difficulties to pay for food, housing, medicine and other basic needs.

Low-income families are hardest-hit
Another important consequence of the pandemic is the closure of schools and childcare centers, as well as the implementation of distance and virtual education programs. Both measures affect to a greater degree, low-income families who do not have the same access to technology or the flexibility to work from home and care for minors at the same time.

The Department of Education states that more than half of the students in the public system do not have access to the internet, which puts them at a disadvantage compared to their peers with the service, especially when the delivery of printed modules with which they can follow their courses has been delayed.

The complications are multiplied when taking into account that a person must stay at home with the minors, which has a harsher effect on working mothers who have been forced to give up their jobs or, in the best case scenario, go on leave without pay or attempt to apply for unemployment benefits.

Author Nicole Díaz-González is an attorney and public policy analyst at Puerto Rico Legal Aid.

The delay in addressing these situations has already had irreversible consequences in the lives of many people. The government has taken too long, even with funds available, to activate emergency aid programs and even make permanent improvements to essential systems which failed, such as unemployment and virtual education.

It must act immediately with the urgency that the moment requires.

In addition, to meet a minimum standard of transparency and accountability, the government must publish as soon as possible the contracts that authorize the disbursements reported by AAFAF and whose purpose and relationship with the pandemic has not been made clear.

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This story was written by our staff based on a press release.

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