HUD delays funding for Puerto Rico, citing ‘alleged corruption’

Woman next in line to be Puerto Rico’s governor doesn’t want the job
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Thousands of Puerto Ricans filled the streets, even shutting down a highway in San Juan.

Federal officials are delaying the release of more than $8 billion in funding to help Puerto Rico bolster its disaster defenses, with Housing and Urban Development Secretary Ben Carson citing “alleged corruption.”

A senior HUD official who spoke to reporters on a briefing call Friday cited concerns about “past mismanagement of funds” being heightened by “unrest in Puerto Rico.”

“Right now, because of the government instability, we have serious concerns and we want to make sure that we are pumping the brakes and that we’re being prudent and that the money is being spent properly,” the official said. “We’re looking for ways to even put our current monitoring process on steroids to make sure that the money goes to the people of Puerto Rico and doesn’t get wasted.”

The US territory is in the midst of an unprecedented constitutional crisis over its governorship and the arrests of government officials by FBI agents investigating government contracts.

Puerto Rico was slated to receive about half of the $16 billion HUD has to distribute to states and territories hit by natural disasters since 2015. The funding is intended for major projects to make infrastructure more resilient, rather than immediate rebuilding needs. To receive the funding, local governments must submit grant requests to HUD for review.

Puerto Rico was devastated by Hurricane Maria in 2017. The senior HUD official said the funding process for Puerto Rico still needed to be worked out.

Puerto Rico Housing Secretary Fernando Gil Enseñat told CNN in a statement that his department “has not been involved or implicated in any of the alleged corruption or fiscal irregularities, and in fact has been recognized by HUD staff for commitment to fiscal controls, management, and risk mitigation.”

He said his department was cautious in how it spent its money. “We have taken a conservative approach in this matter,” he said. “Make no mistake, the funds will be distributed to help those that suffered from hurricanes Irma and María; the people of Puerto Rico that desperately need the help.”

The eligibility guidelines for nine states hit by hurricanes, wildfires and other disasters will be published soon, the senior HUD official said. The states are Texas, Louisiana, Florida, North Carolina, South Carolina, West Virginia, California, Missouri and Georgia. Those states’ deadlines to submit plans will be between February and April of next year.

Funds for the US Virgin Islands are delayed with Puerto Rico’s share, the official said. Guidelines for the territories will be worked out “sometime in the near future”; HUD did not offer further timeline details.